<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 20, 1994
REGISTRATION NO. 33-55143
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
NORTHROP GRUMMAN CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 95-1055798
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
1840 CENTURY PARK EAST
LOS ANGELES, CALIFORNIA 90067
(310) 553-6262
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
SHEILA M. GIBBONS, CORPORATE VICE PRESIDENT AND SECRETARY
NORTHROP GRUMMAN CORPORATION
1840 CENTURY PARK EAST
LOS ANGELES, CALIFORNIA 90067
(310) 553-6262
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
COPIES TO:
<TABLE>
<S> <C>
John D. Hussey, Esq. John R. Light, Esq.
Sheppard, Mullin, Richter & Hampton Latham & Watkins
333 South Hope Street, 48th Floor 633 West Sixth Street, Suite
4000
Los Angeles, California 90071 Los Angeles, California 90071
(213) 620-1780 (213) 485-1234
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENTS OF PROPOSED SALE TO PUBLIC:
FROM TIME TO TIME AFTER THIS REGISTRATION STATEMENT IS DECLARED EFFECTIVE.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or investment plans, please check the following box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
reinvestment plans, please check the following box. /X/
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED, SEPTEMBER 20, 1994
Northrop Grumman Corporation
Debt Securities, Preferred Stock,
Common Stock and Warrants
-----------
NORTHROP GRUMMAN CORPORATION ("NORTHROP GRUMMAN" OR THE "COMPANY") MAY FROM TIME
TO TIME OFFER, TOGETHER OR SEPARATELY, ITS (I) DEBT SECURITIES ("DEBT
SECURITIES"), WHICH MAY BE EITHER SENIOR DEBT SECURITIES ("SENIOR DEBT
SECURITIES") OR SUBORDINATED DEBT SECURITIES ("SUBORDINATED DEBT
SECURITIES"), CONSISTING OF DEBENTURES, NOTES AND/ OR OTHER UNSECURED
EVIDENCES OF INDEBTEDNESS IN ONE OR MORE SERIES; (II) SHARES OF ITS
PREFERRED STOCK ("PREFERRED STOCK"); (III) SHARES OF ITS COMMON
STOCK, $1.00 PAR VALUE (THE "COMMON STOCK"); AND (IV) WARRANTS
TO PURCHASE DEBT SECURITIES, PREFERRED STOCK OR COMMON STOCK
AS SHALL BE DESIGNATED BY THE COMPANY AT THE TIME OF THE
OFFERING (THE "WARRANTS") IN AMOUNTS, AT PRICES AND ON
TERMS TO BE DETERMINED AT THE TIME OF THE OFFERING.
THE DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK
AND WARRANTS ARE COLLECTIVELY CALLED THE
"SECURITIES."
THE SECURITIES OFFERED PURSUANT TO THIS PROSPECTUS MAY BE ISSUED IN ONE OR MORE
SERIES OR ISSUANCES AT AN AGGREGATE INITIAL OFFERING PRICE NOT TO EXCEED
$800,000,000 OR ITS EQUIVALENT (BASED ON THE APPLICABLE EXCHANGE RATES
AT THE TIME OF SALE) IN ONE OR MORE FOREIGN CURRENCIES, CURRENCY
UNITS, COMPOSITE CURRENCIES OR IN AMOUNTS DETERMINED BY
REFERENCE TO AN INDEX AS SHALL BE DESIGNATED BY THE
COMPANY.
THE SENIOR DEBT SECURITIES WHEN ISSUED WILL RANK ON A PARITY WITH ALL OTHER
UNSECURED AND UNSUBORDINATED INDEBTEDNESS OF THE COMPANY, AND THE SUBORDINATED
DEBT SECURITIES WHEN ISSUED WILL BE SUBORDINATED AS DESCRIBED IN THE
ACCOMPANYING PROSPECTUS SUPPLEMENT (THE "PROSPECTUS SUPPLEMENT"). CERTAIN
SPECIFIC TERMS OF THE PARTICULAR SECURITIES IN RESPECT OF WHICH THIS
PROSPECTUS IS BEING DELIVERED ARE SET FORTH IN THE PROSPECTUS
SUPPLEMENT, INCLUDING, WHERE APPLICABLE, (I) IN THE CASE OF DEBT
SECURITIES, THE TITLE, AGGREGATE PRINCIPAL AMOUNT, DENOMINATIONS,
MATURITY, ANY INTEREST RATE (WHICH MAY BE FIXED OR VARIABLE) AND TIME
OF PAYMENT OF ANY INTEREST, ANY TERMS FOR REDEMPTION AT THE OPTION
OF THE COMPANY OR THE HOLDER, ANY TERMS FOR SINKING FUND PAYMENTS,
ANY TERMS FOR CONVERSION INTO OTHER SECURITIES, CURRENCY OR
CURRENCIES OF DENOMINATION AND PAYMENT, IF OTHER THAN U.S.
DOLLARS, ANY LISTING ON A SECURITIES EXCHANGE AND ANY OTHER
TERMS IN CONNECTION WITH THE OFFERING AND SALE OF THE DEBT
SECURITIES IN RESPECT OF WHICH THIS PROSPECTUS IS
DELIVERED, AS WELL AS THE INITIAL PUBLIC OFFERING PRICE;
(II) IN THE CASE OF PREFERRED STOCK, THE SPECIFIC TITLE,
THE AGGREGATE AMOUNT, ANY DIVIDEND (INCLUDING THE
METHOD OF CALCULATING PAYMENT OF DIVIDENDS),
LIQUIDATION, REDEMPTION, VOTING AND OTHER RIGHTS,
ANY TERMS FOR ANY CONVERSION OR EXCHANGE INTO
OTHER SECURITIES, ANY LISTING ON A SECURITIES
EXCHANGE, THE INITIAL PUBLIC OFFERING PRICE AND
ANY OTHER TERMS; (III) IN THE CASE OF COMMON
STOCK, THE NUMBER OF SHARES OF COMMON STOCK
AND THE TERMS OF THE OFFERING THEREOF; AND
(IV) IN THE CASE OF WARRANTS, THE
DESIGNATION AND NUMBER, THE EXERCISE
PRICE, ANY LISTING OF THE WARRANTS OR
THE UNDERLYING SECURITIES ON A
SECURITIES EXCHANGE AND ANY OTHER
TERMS IN CONNECTION WITH THE
OFFERING, SALE AND EXERCISE OF
THE WARRANTS.
THE PROSPECTUS SUPPLEMENT WILL ALSO CONTAIN INFORMATION, WHERE APPLICABLE, ABOUT
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
RELATING TO THE SECURITIES COVERED BY THE PROSPECTUS SUPPLEMENT.
THE COMPANY'S COMMON STOCK IS LISTED ON THE NEW YORK STOCK EXCHANGE AND THE
PACIFIC STOCK EXCHANGE UNDER THE TRADING SYMBOL "NOC." ANY COMMON STOCK
SOLD PURSUANT TO A PROSPECTUS SUPPLEMENT WILL BE LISTED ON
SUCH EXCHANGES, SUBJECT TO OFFICIAL
NOTICE OF ISSUANCE.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR AD-
EQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES WILL BE SOLD DIRECTLY, THROUGH AGENTS, UNDERWRITERS OR DEALERS AS
DESIGNATED FROM TIME TO TIME, OR THROUGH A COMBINATION OF SUCH METHODS. SUCH
UNDERWRITERS MAY INCLUDE CS FIRST BOSTON OR MAY BE A GROUP OF UNDERWRITERS
REPRESENTED BY THE FOREGOING FIRM OR ONE OR MORE OTHER FIRMS. IF AGENTS
OF THE COMPANY OR ANY DEALERS OR UNDERWRITERS ARE INVOLVED IN THE SALE
OF THE SECURITIES IN RESPECT OF WHICH THIS PROSPECTUS IS BEING
DELIVERED, THE NAMES OF SUCH AGENTS, DEALERS OR UNDERWRITERS AND ANY
APPLICABLE COMMISSIONS OR DISCOUNTS ARE SET FORTH IN OR MAY BE
CALCULATED FROM THE PROSPECTUS SUPPLEMENT WITH RESPECT TO SUCH
SECURITIES.
THE DATE OF THIS PROSPECTUS IS , 1994
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, THE ACCOMPANYING PROSPECTUS
SUPPLEMENT OR THE DOCUMENTS INCORPORATED OR DEEMED INCORPORATED BY REFERENCE
HEREIN, AND ANY INFORMATION OR REPRESENTATIONS NOT CONTAINED HEREIN OR THEREIN
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY
AGENT, DEALER OR UNDERWRITER. THIS PROSPECTUS OR PROSPECTUS SUPPLEMENT DOES NOT
CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN
ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. THE DELIVERY
OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT
THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE OF SUCH INFORMATION.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company has filed with the Securities and Exchange Commission (the
"Commission"), pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"):
(i) an Annual Report on Form 10-K for the year ended December 31,
1993;
(ii) Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 1994 and June 30, 1994;
(iii) Current Reports on Form 8-K dated March 25, 1994 and April 16,
1994;
(iv) Amendment to Current Report on Form 8-K/A dated June 30, 1994;
and
(v) the description of the Common Stock set forth in the Registration
Statement on Form 8-B dated June 20, 1985;
which are hereby incorporated by reference in and made a part of this
Prospectus.
All documents hereafter filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold shall be
deemed to be incorporated by reference in and to be a part of this Prospectus
from the date of filing of such documents. Any statement contained in a document
incorporated by reference or deemed to be incorporated herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
This Prospectus may not be used to consummate sales of offered Securities
unless accompanied by a Prospectus Supplement. The delivery of this Prospectus
together with a Prospectus Supplement relating to particular offered Securities
in any jurisdiction shall not constitute an offer in the jurisdiction of any
other securities covered by this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (NOT INCLUDING EXHIBITS TO SUCH
DOCUMENTS, UNLESS SUCH EXHIBITS ARE INCORPORATED BY REFERENCE IN SUCH DOCUMENTS)
ARE AVAILABLE WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST DIRECTED TO: SHEILA M.
GIBBONS, CORPORATE VICE PRESIDENT AND SECRETARY, NORTHROP GRUMMAN CORPORATION,
1840 CENTURY PARK EAST, LOS ANGELES, CALIFORNIA 90067 (TELEPHONE: (310)
553-6262).
2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange Act
and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information may be inspected and copies may be obtained at the principal office
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following regional offices of the Commission: Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such materials can be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. Reports, proxy statements and
other information concerning the Company can also be inspected at the offices of
the New York Stock Exchange, Inc. ("NYSE"), 20 Broad Street, New York, New York
10005; and the Pacific Stock Exchange, Inc., 618 South Spring Street, Los
Angeles, California 90014, and 301 Pine Street, San Francisco, California 94104.
Northrop Grumman has filed with the Commission a Registration Statement
(herein, together with all amendments thereto, called the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the securities offered hereby. This Prospectus does not contain
all of the information included in the Registration Statement and the exhibits
and schedules thereto. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein and filed as an
exhibit to the Registration Statement are not necessarily complete, and, in each
instance, reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference. For further information with respect to
Northrop Grumman and the securities, reference is hereby made to the
Registration Statement and the exhibits and schedules thereto.
THE COMPANY
Northrop Grumman is an advanced technology company that designs, develops
and manufactures military aircraft, missiles and unmanned aeronautical vehicles,
military and commercial aircraft and assemblies and sophisticated electronic
systems. The Company also provides technical and information services to
civilian and governmental customers.
In May 1994, the Company completed the acquisition of Grumman Corporation
("Grumman") and changed its name to "Northrop Grumman Corporation." Grumman
common stock was acquired for an aggregate purchase price of approximately $2.1
billion. The acquisition was financed by borrowings against credit facilities
aggregating $2.8 billion provided by a syndicate of commercial banks.
If the Company and Grumman had been combined during 1993, sales for that
year would have been approximately $8 billion. The combined Company has
significant experience in the design and manufacture of tactical and strategic
military aircraft with particular expertise in both stealth and naval airframe
technologies. In addition, both Northrop and Grumman have developed leading
technologies in the increasingly important area of military electronic systems.
The Company's experience in the integration of large, complex systems positions
it to be a significant competitor for future aircraft and electronics systems
integration programs.
Northrop Grumman programs include several which are important to current
Department of Defense procurement strategies. Northrop Grumman is the prime
contractor on the B-2 Stealth Bomber, the only bomber program currently in
production; the principal subcontractor on the F/A-18 Hornet Strike fighter, one
of the principal fighter aircraft used by the U.S. Navy as well as numerous
foreign countries; the prime contractor on the E-2C Hawkeye, the U.S. Navy's
principal early warning, command and control aircraft; and the prime contractor
for the JSTARS aircraft radar system, which will be the advanced airborne
surveillance and battle management system for the Air Force and Army. The
Company also participates in the commercial aircraft subassembly market as a
principal subcontractor to The Boeing Company on the 747 jetliner program as
well as providing components for other commercial aircraft.
3
<PAGE>
The Company was founded in 1939 and reincorporated in 1985 in Delaware.
Northrop Grumman's executive offices are located at 1840 Century Park East, Los
Angeles, California 90067 and its telephone number is (310) 553-6262.
USE OF PROCEEDS
Except as otherwise described in the applicable Prospectus Supplement, the
net proceeds from the sale of Securities will be used for general corporate
purposes, which may include but are not limited to refinancings of indebtedness,
working capital, capital expenditures and acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of the
Company for each of the five years in the period ended December 31, 1993, and
for the six months ended June 30, 1994.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31,
JUNE 30, -----------------------------------
1994(A) 1993(A) 1992 1991 1990 1989
- ------------ ------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
4.6 4.1 3.8 3.8 3.8 --
<FN>
- ------------------------
(a) Pro forma ratio of earnings to fixed charges for 1993 and the six months
ended June 30, 1994, assuming that the acquisition of Grumman had occurred
at the beginning of the respective periods, would have been 1.8 and 3.2,
respectively.
</TABLE>
The ratio of earnings to fixed charges has been computed by dividing
earnings by fixed charges. Earnings consist of income (loss) from continuing
operations before income taxes, and in 1991, the net cumulative effect of
changes in accounting principles, plus fixed charges. Fixed charges consist of
interest on all indebtedness, amortization of debt issuance costs and other fees
and the portion of rental expense deemed to be representative of interest. In
1989, earnings before fixed charges were insufficient to cover fixed charges by
$81 million.
4
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may not apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Senior Debt Securities are to be issued under an Indenture (the "Senior
Indenture"), to be entered into between the Company and Chase Manhattan Bank,
National Association, as trustee. The Subordinated Debt Securities are to be
issued under a separate Indenture (the "Subordinated Indenture"), to be entered
into between the Company and Chase Manhattan Bank, National Association, as
trustee. The Senior Indenture and the Subordinated Indenture are sometimes
referred to collectively as the "Indentures." Copies of the Senior Indenture and
the Subordinated Indenture have been filed as exhibits to the Registration
Statement. Chase Manhattan Bank, National Association, as trustee under the
Senior Indenture or the Subordinated Indenture, as applicable, is referred to
herein as the "Applicable Trustee."
The following summaries of certain provisions of the Senior Debt Securities,
the Subordinated Debt Securities and the Indentures do not purport to be
complete and are subject, and are qualified in their entirety by reference, to
all the provisions of the Indenture applicable to a particular series of Debt
Securities (the "Applicable Indenture"), including the definitions therein of
certain terms. Wherever particular Sections, Articles or defined terms of the
Indentures are referred to, it is intended that such Sections, Articles or
defined terms shall be incorporated by reference herein. Section and Article
references used herein are references to the Applicable Indenture. Capitalized
terms not otherwise defined herein shall have the meanings given to them in the
Applicable Indenture.
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities that may be issued thereunder, and each Indenture provides that Debt
Securities may be issued thereunder from time to time in one or more series.
Unless otherwise specified in the Prospectus Supplement, the Senior Debt
Securities when issued will be unsecured and unsubordinated obligations of the
Company and will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of the Company. The Subordinated Debt Securities
when issued will be subordinated in right of payment to the prior payment in
full of all Senior Indebtedness (as defined in the Subordinated Indenture) of
the Company as described in the Prospectus Supplement applicable to the offering
of Subordinated Debt Securities.
The Indentures do not contain any provisions that would limit the ability of
the Company to incur indebtedness or require the maintenance of financial ratios
or specified levels of net worth or liquidity. However, the provisions of the
Senior Indenture do provide that neither the Company nor any Restricted
Subsidiary (as defined) will subject certain of its property or assets to any
mortgage or other encumbrance unless the Senior Debt Securities issued under the
Senior Indenture are secured equally and ratably with or prior to such other
indebtedness thereby secured and contain certain limitations on the entry into
certain sale and leaseback arrangements. See "Certain Covenants -- Liens, --
Sale and Leaseback Arrangements." In addition, the Indentures do not contain any
provisions which would require the Company to repurchase or redeem or otherwise
modify the terms of any of its Debt Securities upon a change in control or other
events involving the Company which may adversely affect the creditworthiness of
the Debt Securities.
Reference is made to each Prospectus Supplement related to offered Debt
Securities for information with respect to any deletions from, modifications or
additions to the Events of Default or covenants of the Company that are
described below, including any addition of a covenant or other provision
providing event risk or similar protection.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for a description of the following
terms or additional provisions of the Debt Securities: (1) the title of the Debt
Securities; (2) whether the Debt Securities are Senior Debt Securities or
Subordinated Debt Securities; (3) any limit on the aggregate principal amount of
the Debt Securities; (4) the Person to whom any interest on a Debt Security of
such series will be payable, if other than the Person in whose
5
<PAGE>
name that Debt Security is registered at the close of business on the Regular
Record Date for such interest; (5) the date or dates on which the principal of
the Debt Securities will be payable; (6) the rate or rates at which the Debt
Securities will bear interest, if any; (7) the date or dates from which any such
interest will accrue and the dates on which any such interest will be payable
and the record dates for such interest payments; (8) the place or places where
the principal of and any premium and interest on the Debt Securities will be
payable; (9) the period or periods within which, the price or prices at which,
and the terms and conditions on which the Debt Securities may be redeemed, in
whole or in part, at the option of the Company; (10) the obligation, if any, of
the Company to redeem or purchase the Debt Securities pursuant to any sinking
fund or analogous provision or at the option of the Holder thereof, and the
period or periods within which, the price or prices at which, and the terms and
conditions of which the Debt Securities will be redeemed or purchased, in whole
or in part, pursuant to such obligation; (11) the terms and conditions, if any,
pursuant to which such Debt Securities are convertible or exchangeable into a
security or securities of the Company; (12) the denominations in which the Debt
Securities will be issuable, if other than denominations of $1,000 and any
integral multiple thereof; (13) if the amount of principal of or any premium or
interest on any Debt Securities may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts will be determined; (14)
if other than the currency of the United States of America, the currency,
currencies or currency units in which the principal of or any premium or
interest on any of the Debt Securities will be payable (and the manner in which
the equivalent thereof in the currency of the United States of America is to be
determined for any purpose, including for the purpose of determining the
principal amount deemed to be Outstanding at any time); (15) if the principal of
or any premium or interest on the Debt Securities is to be payable, at the
election of the Company or the Holder thereof, in one or more currencies or
currency units other than those in which the Debt Securities are stated to be
payable, the currency, currencies or currency units in which payment of any such
amount as to which such election is made will be payable, the periods within
which and the terms and conditions upon which such election is to be made and
the amount so payable (or the manner in which such amount is to be determined);
(16) if other than the entire principal amount thereof, the portion of the
principal amount of any of the Debt Securities which will be payable upon
declaration of acceleration of the maturity thereof; (17) if the principal
amount payable at the Stated Maturity of any of the Debt Securities will not be
determinable as of any one or more dates prior to the Stated Maturity, the
amount which will be deemed to be such principal amount as of any such date for
any purpose, including the principal amount thereof which will be due and
payable upon any maturity other than the Stated Maturity or which will be deemed
to be Outstanding as of any such date (or, in any such case, the manner in which
such deemed principal amount is to be determined); (18) if applicable, that the
Debt Securities, in whole or any specified part, are not subject to the
defeasance or covenant defeasance provisions of the Applicable Indenture
described under "Defeasance and Covenant Defeasance"; (19) whether any of the
Securities will be issuable in whole or in part in the form of one or more
Global Securities; (20) any addition to or change in the Events of Default
applicable to any of the Debt Securities and any change in the right of the
Applicable Trustee or the Holders to declare the principal amount of any of the
Debt Securities due and payable; (21) any addition to or change in the covenants
in the Applicable Indenture; (22) if the Debt Securities are Subordinated Debt
Securities, the subordination provisions and the definition of Senior
Indebtedness which will be applicable to such Subordinated Debt Securities; and
(23) any other terms of the Debt Securities not inconsistent with the provisions
of the Applicable Indenture. (Sections 301 and 901)
Debt Securities may be issued as Original Issue Discount Securities to be
sold at a substantial discount below their principal amount. Certain special
United States federal income tax considerations applicable to Debt Securities
sold at an original issue discount will be described in the Prospectus
Supplement relating thereto. In addition, certain special United States federal
income tax or other considerations applicable to any Debt Securities which are
denominated in a currency or currency unit other than United States dollars may
be described in the applicable Prospectus Supplement relating thereto.
DENOMINATIONS, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Debt Securities will be issued only in fully registered form, without
coupons, and in denominations of $1,000 and integral multiples
6
<PAGE>
thereof. (Section 302) No service charge will be made for any registration of
transfer or exchange of Debt Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. (Section 305) The Indentures also provide that the Debt
Securities of any series, if so specified with respect to a particular series,
may be issued in permanent global form. See "Global Debt Securities."
Unless otherwise provided in the Prospectus Supplement relating thereto,
principal of and any premium and interest on the Debt Securities will be
payable, and the Debt Securities will be exchangeable and transfers thereof will
be registrable, at the office or agency of the Trustee in the Borough of
Manhattan, The City of New York, except that, at the option of the Company,
interest may be paid by mailing a check to the address of the Person entitled
thereto as it appears in the Security Register. (Sections 202, 305 and 1002)
SUBORDINATION
The Subordinated Debt Securities will be subordinated and junior in right of
payment, to the extent set forth in the applicable Prospectus Supplement, to all
"Senior Indebtedness" of the Company as defined in the applicable Prospectus
Supplement.
EVENTS OF DEFAULT
Unless otherwise specified in the Prospectus Supplement relating to a
particular series of Debt Securities, the following events will constitute an
Event of Default under the Indentures with respect to Debt Securities of any
series: (a) failure to pay principal of or any premium on any Debt Security of
that series when due, whether at maturity or otherwise (in the case of the
Subordinated Indenture, whether or not such payment is prohibited by the
subordination provisions); (b) failure to pay any interest on any Debt Security
of that series when due, and such failure continues for 30 days (in the case of
the Subordinated Indenture, whether or not such payment is prohibited by the
subordination provisions); (c) failure to deposit any sinking fund payment, when
due, in respect of any Debt Security of that series (in the case of the
Subordinated Indenture, whether or not such deposit is prohibited by the
subordination provisions); (d) failure to perform any other covenant or
agreement of the Company for the benefit of holders of Debt Securities in the
Applicable Indenture or such Debt Security (other than a covenant or agreement
included in the Applicable Indenture solely for the benefit of a series other
than that series), continued for 90 days after written notice has been given by
the Applicable Trustee, or the Holders of at least 10% in principal amount of
the Outstanding Debt Securities of that series, as provided in the Applicable
Indenture; and (e) certain events in bankruptcy, insolvency or reorganization;
and (f) any other event of default specifically provided for by the terms of
such series as described in the related Prospectus Supplement. (Section 501)
If an Event of Default (other than an Event of Default described in clause
(e) above) with respect to the Debt Securities of any series at the time
Outstanding shall occur and be continuing, either the Applicable Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding Debt
Securities of that series by notice as provided in the Applicable Indenture may
declare the principal amount of the Debt Securities of that series (or, in the
case of any Debt Security that is an Original Issue Discount Security or the
principal amount of which is not then determinable, such portion of the
principal amount of such Debt Security, or such other amount in lieu of such
principal amount, as may be specified in the terms of such Debt Security) to be
due and payable immediately. If an Event of Default described in clause (e)
above with respect to the Debt Securities of any series at the time Outstanding
shall occur, the principal amount of all the Debt Securities of that series (or,
in the case of any such Original Issue Discount Security or other Debt Security,
such specified amount) will automatically, and without any action by the
Applicable Trustee or any Holder, become immediately due and payable. After any
such acceleration, but before a judgment or decree based on acceleration, the
Holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of that series may, under certain circumstances, rescind and annul
such acceleration if all Events of Default, other than the non-payment of
accelerated principal (or other specified amount), have been cured or waived as
provided in the Applicable Indenture. (Section 502) For information as to waiver
of defaults, see "Modification and Waiver."
Subject to the provisions of the Applicable Indenture relating to the duties
of the Applicable Trustee in case an Event of Default shall occur and be
continuing, the Applicable Trustee will be under no obligation to
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exercise any of its rights or powers under the Applicable Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Applicable Trustee reasonable indemnity. (Section 603) Subject to
such provisions for the indemnification of the Applicable Trustee, the Holders
of a majority in aggregate principal amount of the Outstanding Debt Securities
of any series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Applicable Trustee or
exercising any trust or power conferred on the Applicable Trustee with respect
to the Debt Securities of that series. (Section 512)
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Applicable Indenture, or for the appointment
of a receiver or a trustee, or for any other remedy thereunder, unless (i) such
Holder had previously given to the Applicable Trustee written notice of a
continuing Event of Default with respect to the Debt Securities of that series,
(ii) the Holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of that series have made written request, and such
Holder or Holders have offered reasonable indemnity, to the Applicable Trustee
to institute such proceeding as trustee, and (iii) the Applicable Trustee has
failed to institute such proceeding, and has not received from the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities of
that series a direction inconsistent with such request, within 60 days after
such notice, request and offer. (Section 507) However, such limitations do not
apply to a suit instituted by a Holder of a Debt Security for the enforcement of
payment of the principal of or any premium or interest on such Debt Security on
or after the applicable due date specified in such Debt Security. (Section 508)
The Company will be required to furnish to the Applicable Trustee annually a
statement by certain of its officers as to whether or not the Company, to their
knowledge, is in default in the performance or observance of any of the terms,
provisions and conditions of the Applicable Indenture and, if so, specifying all
such known defaults. (Section 1004)
CONVERSION RIGHTS
The terms, if any, on which Debt Securities of any series are convertible
into Common Stock or other securities of the Company will be set forth in the
Prospectus Supplement relating thereto. Such terms will include provisions as to
whether conversion is mandatory or at the option of the Holder thereof and may
include provisions pursuant to which the number of shares of Common Stock or
other securities of the Company to be received by the Holders of Debt Securities
would be subject to adjustment.
GLOBAL DEBT SECURITIES
If any Debt Securities of a series are to be issued in global form, the
Prospectus Supplement relating thereto will describe the specific terms of the
depository arrangement with respect to such global Debt Security ("Global
Security") and identify the depositary ("Depositary"). The Depositary holds
securities of its participating organizations ("participants") to facilitate the
clearance and settlement of securities transactions. The Company anticipates
that the following provisions will apply to all Global Securities.
Ownership of beneficial interests in a Global Security will be limited to
participants or persons that may hold interest through participants. Upon the
issuance of a beneficial interest in a Global Security, the Depositary for such
Global Security will credit, on its book-entry registration and transfer system,
the participants' accounts with the respective principal amounts of the Debt
Securities represented by such Global Security beneficially owned by such
participants. The accounts to be credited shall be designated by any dealers,
underwriters or agents participating in the distribution of the Debt Securities.
Ownership of beneficial interests in such Global Security will be shown on, and
the transfer of such ownership interests will be effected only through, records
maintained by the Depositary for such Global Security (with respect to interests
of participants) and on the records of participants (with respect to interests
of persons holding through participants). The laws of some states may require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such laws may impair the ability to own, transfer or pledge
beneficial interests in Global Securities.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of
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the Debt Securities represented by such Global Security for all purposes under
the applicable Indenture. Except as set forth below, owners of beneficial
interests in a Global Security will not be entitled to have their beneficial
interests in such Global Security registered in their names, will not receive or
be entitled to receive physical delivery of such beneficial interests in
definitive form and will not be considered the owners or holders of Debt
Securities under the applicable Indenture. Accordingly, each person owning a
beneficial interest in a Global Security must rely on the procedures of the
Depositary for such Global Security and, if such person is not a participant, on
the procedures of the participant through which such person owns its interest,
to exercise any rights of a holder under the applicable Indenture. The Company
understands that under existing industry practices, if the Company requests any
action of holders or if an owner of a beneficial interest in a Global Security
desires to give or to take any action which a holder is entitled to give or to
take under the applicable Indenture, the Depositary for such Global Security
would authorize the participants holding the relevant beneficial interests to
give or to take such action and such participants would authorize beneficial
owners owning through such participants to give or to take such action or would
otherwise act upon the instructions of beneficial owners holding through them.
Principal, premium, if any, and interest payments on Debt Securities
represented by a Global Security registered in the name of a Depositary or its
nominee will be made to such Depositary or its nominee, as the case may be, as
the registered owner of such Global Security. None of the Company, the Trustee
or any other agent of the Company or agent of the Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in such Global
Security or for maintaining, supervising or reviewing any record relating to
such beneficial ownership interests.
The Company expects that the Depositary for Debt Securities represented by a
Global Security, upon receipt of any payment of principal, premium or interest
in respect of such Global Security, will immediately credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in such Global Security as shown on the records of such Depositary.
The Company also expects that payments by participants to owners of beneficial
interests in such Global Security held through such participants will be
governed by standing customer instructions and customary practices, as is now
the case with the securities held for the accounts of customers in bearer form
or registered in "street name," and will be the responsibility of such
participants.
If the Depositary for the Debt Securities represented by a Global Security
is at any time unwilling or unable to continue as Depositary or ceased to be a
clearing agency registered under the Exchange Act, and a successor Depositary
registered as a clearing agency under the Exchange Act is not appointed by the
Company within 90 days, the Company will issue such Debt Securities in
definitive form in exchange for such Global Security. In addition, the Company
may at any time and in its sole discretion determine not to have any of the Debt
Securities represented by one or more Global Securities and, in such event, will
issue Debt Securities of such series in definitive form in exchange for all of
the Global Security or Securities representing such Debt Securities. Any Debt
Securities issued in definitive form in exchange for a Global Security will be
registered in such name or names as the Depositary shall instruct the Trustee.
It is expected that such instructions will be based upon directions received by
the Depositary from participants with respect to ownership of beneficial
interests in such Global Security.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Debt
Securities under the Indentures, may consolidate with or merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to, any
Person, and may permit any Person to merge into, or convey, transfer or lease
its properties and assets substantially as an entirety to, the Company, provided
(i) that any successor Person must be a corporation, partnership, trust or other
entity organized and validly existing under the laws of any domestic
jurisdiction and must assume the Company's obligations on the Debt Securities
and under the Indentures, (ii) that after giving effect to the transaction, no
Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be continuing and
(iii) that certain other conditions are met. Upon any consolidation or merger
into any other Person or any conveyance, transfer or lease of the Company's
assets substantially as an entirety to any Person, the successor Person will
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succeed to, and be substituted for, the Company under the Indentures, and the
Company, except in the case of a lease, will be relieved of all obligations and
covenants under the Indentures and the Debt Securities to the extent it was the
predecessor Person. (Article Eight)
CERTAIN COVENANTS
LIMITATIONS ON LIENS. The Company covenants in the Senior Indenture that it
will not create, incur, assume or guarantee, and will not permit any Restricted
Subsidiary to create, incur, assume or guarantee, any indebtedness for borrowed
money ("Debt") secured by a mortgage, security interest, pledge, charge or
similar encumbrance ("Mortgages") upon any Principal Property of the Company or
any Restricted Subsidiary or upon any shares of stock or indebtedness of any
Restricted Subsidiary without equally and ratably securing the Debt Securities.
The foregoing restriction, however, will not apply to (a) Mortgages on property,
shares of stock or indebtedness of any corporation existing at the time such
corporation becomes a Restricted Subsidiary; (b) Mortgages on property existing
at the time of acquisition of such property by the Company or a Restricted
Subsidiary or Mortgages to secure the payment of all or any part of the purchase
price of such property upon the acquisition of such property by the Company or
any Restricted Subsidiary or to secure any Debt incurred prior to, at the time
of, or within 180 days after, the acquisition, completion of construction
(including improvements on an existing property) or commencement of full
operation of such property for the purpose of financing all or any part of the
purchase price thereof, or construction of improvements thereon; (c) Mortgages
to secure Debt of a Restricted Subsidiary owed to the Company or another
Restricted Subsidiary; (d) Mortgages existing at the date of the Indenture; (e)
Mortgages on property of a corporation existing at the time such corporation is
merged into or consolidated with the Company or a Restricted Subsidiary or at
the time of a sale, lease, or other disposition of the properties of a
corporation as an entirety or substantially as an entirety to the Company or a
Restricted Subsidiary; (f) Mortgages on property of the Company or a Restricted
Subsidiary in favor of the United States of America or any State thereof, or any
department, agency, instrumentality or political subdivision thereof, to secure
any payments, including advance or progress payments, pursuant to any contract
or statute or to secure any indebtedness incurred or guaranteed for the purpose
of financing all or any part of the purchase price or the cost of construction
of the property subject to such Mortgages (including, but not limited to,
Mortgages incurred in connection with pollution control bonds, industrial
revenue bonds or similar financings); or (g) extensions, renewals or
replacements of any mortgage referred to in the foregoing clauses (a) through
(f). (Section 1009)
Notwithstanding the restrictions outlined in the preceding paragraph, the
Company or any Restricted Subsidiary will be permitted to create, incur, assume
or guarantee any Debt secured by a Mortgage without equally and ratably securing
the Debt Securities, provided that after giving effect thereto, the aggregate
amount of all debt so secured by Mortgages (not including Mortgages permitted
under clauses (a) through (g) above) does not exceed the greater of $300,000,000
or 10% of Consolidated Net Tangible Assets. (Section 1009)
SALE AND LEASEBACK ARRANGEMENTS. The Company covenants in the Senior
Indenture that it will not, nor will it permit any Restricted Subsidiary to,
enter into any arrangement with any person that provides for the leasing to the
Company or any Restricted Subsidiary of Principal Property (other than any such
transaction involving a lease for a term of not more than three years or any
such transaction between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries) which has been or is to be sold or transferred by the
Company or such Restricted Subsidiary to such person, unless either (a) the
Company or such Restricted Subsidiary would be entitled to create, incur, assume
or guarantee Debt secured by a mortgage on such Principal Property at least
equal in amount to the Attributable Debt with respect to such arrangement,
without equally and ratably securing the Debt Securities, pursuant to the
limitation in the Indenture on liens, provided that such Attributable Debt shall
thereupon be deemed to be Debt subject to the provisions of the second paragraph
under "Certain Covenants -- Limitations on Liens" above or (b) the Company shall
apply an amount equal to the greater of the net proceeds of such sale or the
Attributable Debt with respect to such arrangement to the retirement of Debt
that matures more than twelve months after the creation of such Debt. (Section
1010)
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FUNDED DEBT OF RESTRICTED SUBSIDIARIES. The Company covenants in the Senior
Indenture that no Restricted Subsidiary may issue, assume, or guarantee any
Funded Debt unless the aggregate amount of all Funded Debt of all Restricted
Subsidiaries (excluding Funded Debt permitted by clauses (i) through (v) below)
does not exceed 10% of Consolidated Net Tangible Assets. Such limitation will
not apply to (i) any Funded Debt owed to the Company or any other Restricted
Subsidiary; (ii) Funded Debt existing at the date of the Indenture and
extensions, renewals or replacements thereof; (iii) Funded Debt secured by a
Mortgage permitted as described in clauses (a) through (g) under "Certain
Covenants -- Limitations on Liens" above; (iv) any guaranty by a Restricted
Subsidiary of Funded Debt of the Company incurred in connection with the
acquisition of such Restricted Subsidiary; and (v) Funded Debt of a corporation
outstanding at the time such corporation first becomes a Restricted Subsidiary.
(Section 1011)
The Subordinated Indenture does not contain any of the foregoing covenants.
DEFINITIONS. The term "Consolidated Net Tangible Assets" shall mean as of
any particular time, the aggregate amount of assets (less applicable reserves
and other properly deductible items) after deducting therefrom (a) all current
liabilities except for (i) notes and loans payable, (ii) current maturities of
long-term debt, (iii) current maturities of obligations under capital leases,
and (iv) deferred income taxes and (b) all goodwill, tradenames, trademarks,
patents, unamortized debt discount and expenses (to the extent included in said
aggregate amount of assets) and other like intangibles, all as set forth on the
most recent quarterly or annual consolidated balance sheet of the Company and
its consolidated Subsidiaries and computed in accordance with generally accepted
accounting principles.
The term "Funded Debt" shall mean any Debt (indebtedness for money borrowed)
or guaranty thereof, whether or not secured, maturing by its terms more than one
year from the date of its creation, including any Debt or guaranty thereof
renewable or extendable at the option of the obligor to a date more than one
year from the date of original issuance thereof, but excluding any portion of
such Debt or guarantee which is included in current liabilities.
The term "Restricted Subsidiary" shall mean any subsidiary of the Company
except any subsidiary substantially all the assets of which are located, or
substantially all of the business of which is carried on, outside of the United
States of America, or any subsidiary substantially all of the assets of which
consists of stock or other securities of such a subsidiary. (Section 101 of the
Senior Indenture)
The term "Principal Property" shall mean any manufacturing plant or
manufacturing facility which is (i) owned by the Company or any Restricted
Subsidiary and (ii) located within the continental United States of America,
except any such plant which, in the opinion of the Board of Directors, is not of
material importance to the total business conducted by the Company and the
Restricted Subsidiaries taken as a whole.
The term "Attributable Debt" when used in connection with a sale and
leaseback transaction referred to above shall mean, at the time of
determination, the lesser of (a) the fair value of such property (as determined
by the Board of Directors of the Company) or (b) the present value (discounted
at the rate implicit in the terms of the relevant lease) of the obligation of
the lessee for net rental payments during the remaining term of the lease
(including any period for which such lease has been extended).
MODIFICATION AND WAIVER
Modifications and amendments of the Senior Indenture and the Subordinated
Indenture may be made by the Company and the Trustee under the Applicable
Indenture, only with the consent of the Holders of a majority in aggregate
principal amount of each series of the outstanding Debt Securities issued under
the Applicable Indenture and affected by such modification or amendment unless a
greater percentage of such aggregate principal amount is specified in the
applicable Prospectus Supplement; provided, however, that no such modification
or amendment may, without the consent of each Holder of such Debt Security
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any such Debt Security, (b) reduce
the principal amount of, or any premium or interest on, any such Debt Security,
(c) reduce the amount of principal of an Original Issue Discount Security or any
other Debt Security payable upon acceleration of the maturity thereof, (d)
change the place or currency of payment of principal of, or any premium or
interest on, any such Debt Security, (e) impair the right to institute suit for
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the enforcement of any payment on or with respect to any such Debt Security, (f)
in the case of the Subordinated Indenture, modify the subordination provisions
in a manner adverse to the Holders of the Subordinated Debt Securities, (g)
reduce the percentage in principal amount of Outstanding Debt Securities of any
series, the consent of whose Holders is required for modification or amendment
of the Applicable Indenture, (h) reduce the percentage in principal amount of
outstanding Debt Securities of any series necessary for waiver of compliance
with certain provisions of the Applicable Indenture or for waiver of certain
defaults or (i) modify such provisions with respect to modification and waiver.
(Section 902 of the Indentures and Section 907 of the Subordinated Indenture)
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may waive compliance by the Company with certain
restrictive provisions of the Applicable Indenture and, if applicable, such Debt
Securities, unless a greater percentage of such aggregate principal amount is
specified in the applicable Prospectus Supplement. (Section 1008) The Holders of
a majority in principal amount of the Outstanding Debt Securities of any series
may waive any past default under the Applicable Indenture, except a default in
the payment of principal, premium or interest and certain covenants and
provisions of the Applicable Indenture and, if applicable, such Debt Securities
which may not be amended without the consent of the Holder of each Outstanding
Debt Security of such series affected. (Section 513)
OUTSTANDING DEBT SECURITIES
The Indentures provide that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given or
taken any direction, notice, consent, waiver or other action under the
Applicable Indenture as of any date, (i) the portion of the principal amount of
an Original Issue Discount Security that will be deemed to be Outstanding for
such purpose will be the amount of the principal thereof that would be due and
payable as of such date upon acceleration of the maturity thereof to such date,
(ii) if, as of such date, the principal amount payable at the Stated Maturity of
a Debt Security is not determinable (for example, because it is based on an
index), the principal amount of such Debt Security deemed to be Outstanding as
of such date will be an amount determined in the manner prescribed for such Debt
Security and (iii) the portion of the principal amount of a Debt Security
denominated in one or more foreign currencies or currency units that will be
deemed to be Outstanding will be the U.S. dollar equivalent, determined as of
such date in the manner prescribed for such Debt Security, of the principal
amount of such Debt Security (or, in the case of a Debt Security described in
clause (i) or (ii) above, of the amount described in such clause). Certain Debt
Securities, including those for whose payment or redemption money has been
deposited or set aside in trust for the Holders and those that have been fully
defeased, will not be deemed to be Outstanding. In addition, Debt Securities
owned by the Company or any of its Affiliates will not be deemed to be
Outstanding. (Section 101)
DEFEASANCE AND COVENANT DEFEASANCE
The Indentures provide that unless the Prospectus Supplement with respect to
a particular series of Debt Securities provides otherwise, the Company may elect
either (A) to defease and be discharged from any and all its obligations with
respect to such Debt Securities (including, in the case of Subordinated Debt
Securities, the subordination provisions which will be described in the
applicable Prospectus Supplement and except for the obligations to exchange or
register the transfer of such Debt Securities, to replace temporary or
mutilated, destroyed, lost or stolen Debt Securities, to maintain an office or
agency with respect to the Debt Securities and to hold moneys for payment in
trust) ("defeasance") or (B) to be released from its obligations with respect to
such Debt Securities concerning restrictive covenants (including, in the case of
Subordinated Debt Securities, the subordination provisions which will be
described in the applicable Prospectus Supplement) which are subject to covenant
defeasance ("covenant defeasance"), and the occurrence of certain Events of
Default, which are described above in clause (d) (with respect to such
restrictive covenants) and clause (e) under "Events of Default" and any that may
be described in the applicable Prospectus Supplement, shall no longer be an
Event of Default, in each case, upon deposit with the Applicable Trustee (or
other qualifying trustee), in trust for such purpose, money or U.S. Government
Obligations, or both (or Foreign Government Obligations (as defined) in the case
of Debt Securities
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denominated in foreign currencies), which, through the payment of principal and
interest in respect thereof in accordance with their terms, will provide money
in an amount sufficient to pay the principal of and any premium and interest on
such Debt Securities.
As a condition to defeasance or covenant defeasance, the Company must
deliver to the Applicable Trustee an Opinion of Counsel (as specified in the
Applicable Indenture) to the effect that Holders of such Debt Securities will
not recognize gain or loss for federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such defeasance or covenant defeasance had not occurred. The Company
may exercise its defeasance option with respect to such Debt Securities
notwithstanding its prior exercise of its covenant defeasance option. If the
Company exercises its defeasance option, payment of such Debt Securities may not
be accelerated by reference to the covenants noted under clause (B) above. In
the event the Company omits to comply with its remaining obligations with
respect to such Debt Securities under the Indenture after exercising its
covenant defeasance option and such Debt Securities are declared due and payable
because of the occurrence of any Event of Default, the amount of money and U.S.
Government Obligations (or Foreign Government Obligations in the case of Debt
Securities denominated in foreign currencies) on deposit in the defeasance trust
may be insufficient to pay amounts due on the Debt Securities of such series at
the time of the acceleration resulting from such Event of Default. However, the
Company will remain liable in respect of such payments. (Article Thirteen)
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed in
accordance with, the law of the State of New York, without regard to principles
of conflicts of laws. (Section 112)
REGARDING THE TRUSTEE
Chase Manhattan Bank, National Association, is the Trustee under the Senior
Indenture and the Subordinated Indenture. The Trustee or its affiliates perform
certain commercial banking services for the Company in the ordinary course of
business. The trustee is also a co-agent and lender with respect to the
Company's $2.8 billion credit agreement and may act as an underwriter with
respect to the Securities offered pursuant to a Prospectus Supplement. The
Trustee may be deemed to have a conflicting interest and may be required to
resign as Trustee if at the time of a default under one of the Indentures it is
a creditor of the Company. In addition, the Trustee will be required to resign
as Trustee under one of the Indentures if at the time of default under one
Indenture Debt Securities have been issued under the other Indenture.
Notices should be directed to Corporate Trust Department, 4 Chase MetroTech
Center, Brooklyn, NY 11245.
DESCRIPTION OF PREFERRED STOCK
The following summary contains a description of certain general terms of the
Company's Preferred Stock to which any Prospectus Supplement may relate. Certain
terms of any series of Preferred Stock offered by any Prospectus Supplement will
be described in the Prospectus Supplement relating thereto. If so indicated in
the Prospectus Supplement, the terms of any series may differ from the terms set
forth below. The description of certain provisions of the Company's Preferred
Stock does not purport to be complete and is subject to and qualified in its
entirety by reference to the provisions of the Company's Certificate of
Incorporation, as amended, and the Certificate of Designations (the "Certificate
of Designations") relating to each particular series of Preferred Stock which
will be filed or incorporated by reference, as the case may be, as an exhibit to
the Registration Statement of which this Prospectus is a part at or prior to the
time of the issuance of such Preferred Stock.
GENERAL
Under the Company's Certificate of Incorporation, the Board of Directors of
the Company is authorized, without further stockholder action, to provide for
the issuance of up to 10,000,000 shares of preferred stock, $1 par value (the
"Preferred Stock"). As of the date of this Prospectus the Company has no
Preferred Stock outstanding. The Preferred Stock may be issued in one or more
series, with such designations of titles; dividend rates; any redemption
provisions; special or relative rights in the event of liquidation, dissolution,
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distribution or winding up of the Company; any sinking fund provisions; any
conversion provisions; any voting rights thereof; and any other preferences,
privileges, powers, rights, qualifications, limitations and restrictions, as
shall be set forth as and when established by the Board of Directors of the
Company. The shares of any series of Preferred Stock will be, when issued, fully
paid and non-assessable and holders thereof will have no preemptive rights in
connection therewith.
The liquidation preference of any series of Preferred Stock is not
necessarily indicative of the price at which shares of such series of Preferred
Stock will actually trade at or after the time of their issuance. The market
price of any series of Preferred Stock can be expected to fluctuate with changes
in market and economic conditions, the financial condition and prospects of the
Company and other factors that generally influence the market price of
securities.
RANK
Any Series of Preferred Stock will, with respect to rights on liquidation,
winding up and dissolution, rank (i) senior to all classes of Common Stock and
to all equity securities issued by the Company, the terms of which specifically
provide that such equity securities will rank junior to such series of Preferred
Stock (the "Junior Liquidation Securities"); (ii) on a parity with all equity
securities issued by the Company, the terms of which specifically provide that
such equity securities will rank on a parity with such series of Preferred Stock
("Parity Liquidation Securities"); and (iii) junior to all equity securities
issued by the Company, the terms of which specifically provide that such equity
securities will rank senior to such series of Preferred Stock (the "Senior
Liquidation Securities"). In addition, any series of Preferred Stock will, with
respect to dividend rights, rank (i) senior to all equity securities issued by
the Company, the terms of which specifically provide that such equity securities
will rank junior to such series of Preferred Stock and, to the extent provided
in the applicable Certificate of Designation, to Common Stock, (ii) on a parity
with all equity securities issued by the Company, the terms of which
specifically provide that such equity securities will rank on a parity with such
series of Preferred Stock and, to the extent provided in the applicable
Certificate of Designation, to Common Stock ("Parity Dividend Securities") and
(iii) junior to all equity securities issued by the Company, the terms of which
specifically provide that such equity securities will rank senior to such series
of Preferred Stock. As used in any Certificate of Designation for these
purposes, the term "equity securities" will not include debt securities
convertible into or exchangeable for equity securities.
DIVIDENDS
Holders of each series of Preferred Stock will be entitled to receive, when,
as and if declared by the Board of Directors of the Company out of funds legally
available therefor, cash dividends at such rates and on such dates as are set
forth in the Prospectus Supplement relating to such series of Preferred Stock.
Various credit agreements to which the Company is a party contain provisions
restricting dividends and other distributions and the purchase or redemption of
Preferred Stock of the Company under certain circumstances. Dividends will be
payable to holders of record of Preferred Stock as they appear on the books of
the Company on such record dates as shall be fixed by the Board of Directors.
Dividends on any series of Preferred Stock may be cumulative or non-cumulative.
No full dividends may be declared or paid or funds set apart for the payment
of dividends on any series of Preferred Stock unless dividends shall have been
paid or set apart for such payment on the Parity Dividend Securities. If full
dividends are not so paid, such series of Preferred Stock shall share dividends
pro rata with the Parity Dividend Securities.
CONVERSION AND EXCHANGE
The Prospectus Supplement for any series of Preferred Stock will state the
terms, if any, on which shares of that series are convertible into shares of
another series of Preferred Stock or Common Stock or exchangeable for another
series of Preferred Stock, Common Stock or Debt Securities of the Company. The
Common Stock of the Company is described below under "Description of Common
Stock."
REDEMPTION
A series of Preferred Stock may be redeemable at any time, in whole or in
part, at the option of the Company or the holder thereof and may be subject to
mandatory redemption pursuant to a sinking fund or otherwise upon terms and at
the redemption prices set forth in the Prospectus Supplement relating to such
series.
14
<PAGE>
In the event of partial redemptions of Preferred Stock, whether by mandatory
or optional redemption, the shares to be redeemed will be determined by lot or
pro rata, as may be determined by the Board of Directors of the Company, or by
any other method determined to be equitable by the Board of Directors.
On or after a redemption date, unless the Company defaults in the payment of
the redemption price, dividends will cease to accrue on shares of Preferred
Stock called for redemption and all rights of holders of such shares will
terminate except for the right to receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, holders of each series of Preferred Stock that ranks senior to the
Junior Liquidation Securities will be entitled to receive out of assets of the
Company available for distribution to stockholders, before any distribution is
made on any Junior Liquidation Securities, including Common Stock, distributions
upon liquidation in the amount set forth in the Prospectus Supplement relating
to such series of Preferred Stock, plus an amount equal to any accrued and
unpaid dividends. If, upon any voluntary or involuntary liquidation, dissolution
or winding up of the Company, the amounts payable with respect to the Preferred
Stock of any series and any other Parity Liquidation Securities are not paid in
full, the holders of the Preferred Stock of such series and the Parity
Liquidation Securities will share ratably in any such distribution of assets of
the Company in proportion to the full liquidation preferences to which each is
entitled. After payment of the full amount of the liquidation preference to
which they are entitled, the holders of such series of Preferred Stock will not
be entitled to any further participation in any distribution of assets of the
Company.
VOTING RIGHTS
Except as indicated in the Prospectus Supplement relating to a particular
series of Preferred Stock or except as expressly required by applicable law, the
holders of shares of Preferred Stock will have no voting rights.
DESCRIPTION OF COMMON STOCK
The Company is authorized to issue 200,000,000 shares of Common Stock. As of
April 30, 1994, 49,137,871 shares of Common Stock were issued and outstanding,
not including shares reserved for issuance under the Company's stock plans. The
Common Stock is listed on the New York Stock Exchange and the Pacific Stock
Exchange.
The holders of Common Stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors out of funds legally
available therefor; PROVIDED that if any shares of Preferred Stock are then
outstanding, the payment of dividends on Common Stock may be subject to the
declaration and payment of full cumulative dividends, and the absence of
arrearages in any mandatory sinking fund, on outstanding shares of Preferred
Stock. Various credit agreements to which the Company is a party contain
provisions restricting dividends and other distributions and the purchase or
redemption of Common Stock of the Company under certain circumstances. The
holders of Common Stock are entitled to one vote per share on all matters
submitted to a vote of stockholders and do not have cumulative voting rights.
Holders of Common Stock are entitled to receive, upon any liquidation of the
Company, all remaining assets available for distribution to stockholders after
satisfaction of the Company's liabilities and the preferential rights of any
Preferred Stock that may then be issued and outstanding. The outstanding shares
of Common Stock are, and the shares offered hereby will be, fully paid and
nonassessable. The holders of Common Stock have no preemptive, conversion or
redemption rights. The registrar and transfer agent for the Common Stock is
Chemical Bank of New York.
COMMON STOCK PURCHASE RIGHTS
In 1988, the Company's Board of Directors authorized the distribution of one
Common Stock Purchase Right (a "Right") for each outstanding share of Common
Stock.
As distributed, the Rights trade together with the Common Stock. They may be
exercised or traded separately 10 business days after a person or group of
persons acquires 15% or more of the outstanding Common Stock, or announces the
intention to make a tender offer for 30% or more of the Company's
15
<PAGE>
outstanding Common Stock. Upon exercise, each Right entitles the holder thereof
to buy one share of Common Stock at a price of $105. If a Person acquires 15% of
the outstanding voting power of the Company, each Right (other than those held
by the acquiror) will entitle its holder to purchase, at the Right's exercise
price, shares of Common Stock having a market value of two times the Right's
exercise price. Additionally, if the Company is acquired in a merger or other
business combination, each Right (other than those held by the surviving or
acquiring company) will entitle its holder to purchase, at the Right's exercise
price, shares of the acquiring company's common stock (or Common Stock of the
Company if it is the surviving corporation) having a market value of two times
the Right's exercise price.
Rights may be redeemed at the option of the Board of Directors for $0.02 per
Right at any time prior to the earlier of the expiration of the Rights or within
10 days following the date that a person or persons acquire 15 percent of the
general voting power of the Company. The Board may amend the Rights at any time
without stockholder approval. The Rights will expire by their terms in October
1998.
DESCRIPTION OF WARRANTS
The Company may issue Warrants to purchase Debt Securities ("Debt
Warrants"), as well as Warrants to purchase Preferred Stock or Common Stock
("Equity Warrants"). Warrants may be issued independently or together with any
Securities and may be attached to or separate from such securities. The Warrants
are to be issued under warrant agreements (each a "Warrant Agreement") to be
entered into between the Company and a bank or trust company, as warrant agent
(the "Warrant Agent"), all as shall be set forth in the Prospectus Supplement
relating to Warrants being offered pursuant thereto.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants
and the debt warrant certificates representing such Debt Warrants, including the
following: (1) the title of such Debt Warrants; (2) the aggregate number of such
Debt Warrants; (3) the price or prices at which such Debt Warrants will be
issued; (4) the currency or currencies, including composite currencies or
currency units, in which the price of such Debt Warrants may be payable; (5) the
designation, aggregate principal amount and terms of the Debt Securities
purchasable upon exercise of such Debt Warrants, and the procedures and
conditions relating to the exercise of such Debt Warrants; (6) the designation
and terms of any related Debt Securities with which such Debt Warrants are
issued, and the number of such Debt Warrants issued with each such Debt
Security; (7) the currency or currencies, including composite currencies or
currency units, in which the principal of or any premium or interest on the Debt
Securities purchasable upon exercise of such Debt Warrants will be payable; (8)
the date, if any, on and after which such Debt Warrants and the related Debt
Securities will be separately transferable; (9) the principal amount of Debt
Securities purchasable upon exercise of each Debt Warrant, and the price at
which and the currency or currencies, including composite currencies or currency
units, in which such principal amount of Debt Securities may be purchased upon
such exercise; (10) the date on which the right to exercise such Debt Warrants
will commence, and the date on which such right will expire; (11) the maximum or
minimum number of such Debt Warrants which may be exercised at any time; (12) a
discussion of any material federal income tax considerations; and (13) any other
terms of such Debt Warrants and terms, procedures and limitations relating to
the exercise of such Debt Warrants.
Debt warrant certificates will be exchangeable for new debt warrant
certificates of different denominations, and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated in
the Prospectus Supplement. Prior to the exercise of their Debt Warrants, holders
of Debt Warrants will not have any of the rights of holders of the Debt
Securities purchasable upon such exercise and will not be entitled to payment of
principal of or any premium or interest on the Debt Securities purchasable upon
such exercise.
EQUITY WARRANTS
The applicable Prospectus Supplement will describe the following terms of
Equity Warrants offered thereby: (1) the title of such Warrants; (2) the
Securities (i.e. Preferred Stock or Common Stock) for which such Warrants are
exercisable; (3) the price or prices at which such Warrants will be issued; (4)
the currency
16
<PAGE>
or currencies, including composite currencies or currency units, in which the
price of such Warrants may be payable; (5) if applicable, the designation and
terms of the Preferred Stock or Common Stock with which such Warrants are
issued, and the number of such Warrants issued with each such share of Preferred
Stock or Common Stock; (6) if applicable, the date on and after which such
Warrants and the related Preferred Stock or Common Stock will be separately
transferable; (7) if applicable, a discussion of any material federal income tax
considerations; and (8) any other terms of such Warrants, including terms,
procedures and limitations relating to the exchange and exercise of such
Warrants.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase for cash such principal
amount of Debt Securities or number of shares of Preferred Stock or Common Stock
at such exercise price as shall in each case be set forth in, or be determinable
as set forth in, the Prospectus Supplement relating to the Warrants offered
thereby. Warrants may be exercised at any time up to the close of business on
the expiration date set forth in the Prospectus Supplement relating to the
Warrants offered thereby. After the close of business on the expiration date,
unexercised Warrants will become void.
Warrants may be exercised as set forth in the Prospectus Supplement relating
to the Warrants offered thereby. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the corporate trust office
of the Warrant Agent or any other office indicated in the Prospectus Supplement,
the Company will, as soon as practicable, forward the Securities purchasable
upon such exercise. If less than all of the Warrants represented by such
warrants certificate are exercised, a new warrant certificate will be issued for
the remaining Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby in four ways: (i)
directly to purchasers, (ii) through agents, (iii) through underwriters, and
(iv) through dealers.
If one or more underwriters are used in the sale of Securities, the Company
will execute an underwriting agreement with such underwriters setting forth,
among other things, certain terms of the sale and offering.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The Prospectus Supplement will describe
the method of distribution of the Securities.
In connection with the sale of Securities, underwriters and agents may
receive compensation both from the Company, in the form of discounts,
concessions or commissions, and from purchasers of Securities for whom they may
act as agents. The underwriters, agents and dealers that participate in the
distribution of Securities may be deemed to be "underwriters" within the meaning
of, and any discounts or commissions received by them and any profit on the
resale of Securities by them may be deemed to be underwriting discounts and
commissions under, the Securities Act. Any such underwriters or agents will be
identified and any such compensation will be described in the Prospectus
Supplement.
Under agreements which may be entered into by the Company, underwriters,
agents and dealers who participate in the distribution of Securities may be
entitled to indemnification by the Company against or in respect of certain
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments required to be made in respect thereof.
Certain of the underwriters, dealers and agents and their associates may
engage in transactions with, and perform services for, the Company in the
ordinary course of business.
If so indicated in an applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as agents to solicit offers by
certain institutions to purchase Debt Securities or Preferred Stock from the
Company at the public offering price set forth in such Prospectus Supplement
pursuant to Delayed Delivery Contracts ("Contracts") providing for payment and
delivery on the date or dates stated in the applicable Prospectus Supplement.
Each Contract will be for an amount stated in the applicable
17
<PAGE>
Prospectus Supplement. Institutions with whom Contracts, when authorized, may be
made include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions, and other
institutions but will in all cases be subject to the approval of the Company.
Contracts will not be subject to any conditions except that (i) the purchase by
an institution of the Securities covered by its Contracts will not at the time
of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject and (ii) if the Securities are being
sold to underwriters, the Company will have sold to such underwriters such
amount specified in the applicable Prospectus Supplement. Agents and
underwriters will have no responsibility in respect of the delivery or
performance of Contracts. A commission indicated in the applicable Prospectus
Supplement will be paid to underwriters and agents soliciting purchases of
Securities pursuant to Contracts accepted by the Company.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, certain
legal matters with respect to the legality of the issuance of Securities by the
Company will be passed on by Sheppard, Mullin, Richter & Hampton and Latham &
Watkins, Los Angeles, California, will pass upon certain legal matters in
connection with the Securities on behalf of any underwriters, agents or dealers.
INDEPENDENT AUDITORS
The audited consolidated financial statements and related financial
statement schedules of Northrop Corporation (now named Northrop Grumman
Corporation) and subsidiaries at December 31, 1993 and 1992, and for each of the
five years in the period ended December 31, 1993, appearing in Northrop
Corporation's Annual Report on Form 10-K for the year ended December 31, 1993,
incorporated in the prospectus by reference, have been audited by Deloitte &
Touche LLP, independent accountants, as stated in their report, which is also
incorporated herein by reference. Such consolidated financial statements have
been so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
The consolidated balance sheet of Grumman Corporation at December 31, 1993
and 1992 and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1993, appearing in Northrop Corporation's Form 8-K dated April 16, 1994,
incorporated herein by this reference, have been audited by Arthur Andersen &
Co., independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report.
18
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses (other than underwriting
discounts and commissions) incurred and to be incurred by the Company in
connection with the issuance and distribution of the Securities registered
pursuant to this registration statement. All amounts are estimated except the
Securities and Exchange Commission filing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee.................... $ 275,862
Printing and engraving expenses.................................. 100,000
Accounting fees and expenses..................................... 100,000
Legal fees and expenses.......................................... 175,000
Fees and expenses of trustee..................................... 20,000
Rating agencies' fees............................................ 150,000
Blue sky fees and expenses and legal fees........................ 20,000
Miscellaneous.................................................... 24,138
-----------
Total.......................................................... $ 865,000
-----------
-----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
DELAWARE GENERAL CORPORATION LAW
Section 145 of the Delaware General Corporation Law (the "Act"), and Article
V of the Company's Bylaws relate to the indemnification of the Company's
directors and officers, among others, in a variety of circumstances against
liabilities arising in connection with the performance of their duties.
The Act permits indemnification of directors and officers acting in good
faith and in a manner they reasonably believe to be in or not opposed to the
best interests of the Company or its shareholders (and, with respect to a
criminal proceeding, if they have no reasonable cause to believe their conduct
to be unlawful) against (i) expenses (including attorney's fees), judgments,
penalties, fines and amounts paid in settlement actually and reasonably incurred
in connection with any threatened, pending, or completed action, suit, or
proceeding (other than an action by or in the right of the Company) arising out
of a position with the Company (or with some other entity at the Company's
request) and (ii) expenses (including attorneys' fees) and amounts paid in
settlement actually and reasonably incurred in connection with a threatened,
pending, or completed action or suit by or in the right of the Company, unless
the director or officer is found liable to the Company and an appropriate court
does not determine that he or she is nevertheless fairly and reasonably entitled
to indemnification.
The Act requires indemnification for expenses to the extent that a director
or officer is successful on the merits in defending against any such action,
suit or proceeding, and otherwise requires in general that the indemnification
provided for in (i) and (ii) above be made only on a determination by a majority
vote of a quorum of the Board of Directors who were not parties or threatened to
be made parties to the action, suit or proceeding, or, if a quorum cannot be
obtained, (a) by independent legal counsel, or (b) by the shareholders. In
certain circumstances, the Act further permits advances to cover such expenses
before a final determination that indemnification is permissible, upon receipt
of a written undertaking by or on behalf of the director or officer to repay
such amounts if it shall ultimately be determined that they are not entitled to
indemnification.
Indemnification under the Act is not exclusive of other rights to
indemnification to which a person may be entitled under the Company's
Certificate of Incorporation, Bylaws, or a contractual agreement. The Act
permits the Company to purchase insurance on behalf of its directors and
officers against liabilities arising out of their positions with the Company
whether or not such liabilities would be within the foregoing indemnification
provisions.
II-1
<PAGE>
BYLAWS
Under the Company's Bylaws, the Company is required to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Company, a "derivative action") and any appeal thereof by reason of the fact
that such person is, was or agreed to become a director or officer of the
Company, against expenses (including attorneys' fees), judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding to the fullest extent
allowed under Delaware or other applicable state law. The Company shall
indemnify an indemnitee in connection with a suit brought by such indemnitee
only if the proceeding was authorized by the Company or is instituted to enforce
the indemnification rights herein above mentioned. The Company may pay the
expenses (including attorney's fees) incurrerd by any officer, director,
employee or agent who is interviewed, subpoenaed or deposed as a witness, or
otherwise incurs expenses, in connection with any action or proceeding, if it is
determined that such payments will benefit the Company.
The Company's Bylaws provide that the Company shall pay for the expenses
incurred by an indemnified director or officer in defending the proceedings
specified above, in advance of their final disposition, provided that the person
furnishes the Company with an undertaking to reimburse the Company if it is
ultimately determined that such person is not entitled to indemnification. The
Company may provide indemnification at the discretion of the Board of Directors
and on such terms and under such conditions as the Board shall deem appropriate
to any person who is or was serving as an employee or agent. In addition, the
Company may purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the Company (or is serving or was
serving at the request of an executive officer the Company in such a position at
a related entity) against any liability asserted against and incurred by such
person in such capacity, or arising out of the person's status as such whether
or not the Company would have the power or the obligation to indemnify such
person against such liability under the provisions of the Company's Bylaws.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
1-1 Form of Underwriting Agreement relating to common equity securities.
1-2 Form of Underwriting Agreement relating to preferred equity securities.
1-3 Form of Underwriting Agreement relating to debt securities.
*4-1 Restated Certificate of Incorporation.
*4-2 Bylaws, as amended.
4-3 Common Stock Purchase Rights Plan (filed as Exhibit 4(a) to Registrants' Form 8-A
dated September 22, 1988).
4-4 Amended and Restated Credit Agreement dated as of April 18, 1994, among the
Company, The Chase Manhattan Bank and Chemical Bank, as co-agents, and various
banks (filed as Exhibit 10 to Registrants' Form 10-Q for the quarterly period
ended March 31, 1994).
4-4.1 Amendment No. 1 dated as of May 11, 1994, to Amended and Restated Credit
Agreement dated as of April 18, 1994.
4-5 Form of Senior Indenture.
*4-6 Form of Subordinated Indenture.
*4-7 Form of Warrant Agreement for Debt Securities.
*4-8 Form of Warrant Agreement for Equity Securities.
4-9 Form of Certificate for Common Stock.
*4-10 Form of Certificate of Designations of Preferred Stock.
*5-1 Opinion of Sheppard, Mullin, Richter & Hampton.
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
12-1 Computation of Ratio of Earnings to Fixed Charges.
*23-1 Consent of Deloitte & Touche LLP, independent auditors.
*23-2 Consent of Arthur Andersen & Co., independent public accountants.
*23-3 Consent of Sheppard, Mullin, Richter & Hampton (included in Exhibit 5-1).
*24-1 Powers of Attorney.
*25-1 Form T-1 Statement of Eligibility and Qualification of Trustee under the Trust
Indenture Act of 1939.
<FN>
- ------------------------
* Previously filed.
</TABLE>
Note: Certain instruments with respect to issues of long-term debt have not been
filed as Exhibits to this statement since the authorized principal amount of any
one of such issues does not exceed 10% of the total assets of the Company on a
consolidated basis as of June 30, 1994. Such indebtedness is described in the
Notes to the Consolidated Financial Statements of the Company.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) to file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any fact or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in the registration statement;
provided, however, that the undertakings set forth in the paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(b) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(d) that, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(e) that, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
II-3
<PAGE>
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in such Act and
will be governed by the final adjudication of such issue.
(f) that, for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (a) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(g) that, for purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(h) to file an application for the purposes of determining the eligibility
of the trustee to act under subsection (a) of Section 310 of the Trust Indenture
Act in accordance with the rules and regulations prescribed by the Commission
under Section 305(b)(2) of such Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Los Angeles, California, on September
20, 1994.
NORTHROP GRUMMAN CORPORATION
By: /s/ NELSON F. GIBBS
-----------------------------------
Nelson F. Gibbs
CORPORATE VICE PRESIDENT
AND CONTROLLER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed below by the following
persons in the capacities and on dates indicated.
NAME TITLE DATE
- ------------------------------- ------------------------- ------------------
Chairman of the Board,
/s/ KENT KRESA President and Chief
- ------------------------------- Executive Officer and September 20, 1994
Kent Kresa* Director (Principal
Executive Officer)
/s/ RICHARD B. WAUGH, JR. Corporate Vice President
- ------------------------------- and Chief Financial September 20, 1994
Richard B. Waugh, Jr.* Officer
Corporate Vice President
/s/ NELSON F. GIBBS and Controller,
- ------------------------------- Principal Accounting September 20, 1994
Nelson F. Gibbs Officer
/s/ OLIVER C. BOILEAU, JR.
- ------------------------------- Director September 20, 1994
Oliver C. Boileau, Jr.*
/s/ JACK R. BORSTING
- ------------------------------- Director September 20, 1994
Jack R. Borsting*
/s/ RENSO L. CAPORALI
- ------------------------------- Director September 20, 1994
Renso L. Caporali*
/s/ JOHN T. CHAIN, JR.
- ------------------------------- Director September 20, 1994
John T. Chain, Jr.*
II-5
<PAGE>
NAME TITLE DATE
- ------------------------------- ------------------------- ------------------
/s/ JACK EDWARDS
- ------------------------------- Director September 20, 1994
Jack Edwards*
/s/ BARBRA C. JORDAN
- ------------------------------- Director September 20, 1994
Barbra C. Jordan*
/s/ AULANA L. PETERS
- ------------------------------- Director September 20, 1994
Aulana L. Peters*
/s/ JOHN E. ROBSON
- ------------------------------- Director September 20, 1994
John E. Robson*
/s/ RICHARD M. ROSENBERG
- ------------------------------- Director September 20, 1994
Richard M. Rosenberg*
/s/ WILLIAM F. SCHMIED
- ------------------------------- Director September 20, 1994
William F. Schmied*
/s/ BRENT SCOWCROFT
- ------------------------------- Director September 20, 1994
Brent Scowcroft*
/s/ JOHN BROOKS SLAUGHTER
- ------------------------------- Director September 20, 1994
John Brooks Slaughter*
/s/ WALLACE C. SOLBERG
- ------------------------------- Director September 20, 1994
Wallace C. Solberg*
/s/ RICHARD J. STEGEMEIER
- ------------------------------- Director September 20, 1994
Richard J. Stegemeier*
*By: /s/ SHEILA M. GIBBONS
- ------------------------------------
Sheila M. Gibbons
Attorney-in-Fact**
** By authority of powers of attorney filed with the Registration Statement.
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- ---------- ------------------------------------------------------------------------------------------------ -----
<C> <S> <C>
1-1 Form of Underwriting Agreement relating to common equity securities.............................
1-2 Form of Underwriting Agreement relating to preferred equity securities..........................
1-3 Form of Underwriting Agreement relating to debt securities......................................
*4-1 Restated Certificate of Incorporation...........................................................
*4-2 Bylaws, as amended..............................................................................
4-3 Common Stock Purchase Rights Plan (filed as Exhibit 4(a) to Registrants' Form 8-A dated
September 22, 1988)............................................................................
4-4 Amended and Restated Credit Agreement dated as of April 18, 1994, among the Company, The Chase
Manhattan Bank and Chemical Bank, as co-agents, and various banks (filed as Exhibit 10 to
Registrants' Form 10-Q for the quarterly period ended March 31, 1994)..........................
4-4.1 Amendment No. 1 dated as of May 11, 1994, to Amended and Restated Credit Agreement dated as of
April 18, 1994.
4-5 Form of Senior Indenture........................................................................
*4-6 Form of Subordinated Indenture..................................................................
*4-7 Form of Warrant Agreement for Debt Securities...................................................
*4-8 Form of Warrant Agreement for Equity Securities.................................................
4-9 Form of Certificate for Common Stock............................................................
*4-10 Form of Certificate of Designations of Preferred Stock..........................................
*5-1 Opinion of Sheppard, Mullin, Richter & Hampton..................................................
12-1 Computation of Ratio of Earnings to Fixed Charges...............................................
*23-1 Consent of Deloitte & Touche LLP, independent auditors..........................................
*23-2 Consent of Arthur Andersen & Co., independent public accountants................................
*23-3 Consent of Sheppard, Mullin, Richter & Hampton (included in Exhibit 5-1)........................
*24-1 Powers of Attorney..............................................................................
*25-1 Form T-1 Statement of Eligibility and Qualification of Trustee under the Trust Indenture Act of
1939...........................................................................................
</TABLE>
- ------------------------
* Previously filed.
Note: Certain instruments with respect to issues of long-term debt have not been
filed as Exhibits to this statement since the authorized principal amount of any
one of such issues does not exceed 10% of the total assets of the Company on a
consolidated basis as of June 30, 1994. Such indebtedness is described in the
Notes to the Consolidated Financial Statements of the Company.
<PAGE>
EXHIBIT 1-1
NORTHROP GRUMMAN CORPORATION
COMMON STOCK
[WARRANTS TO PURCHASE COMMON STOCK]
UNDERWRITING AGREEMENT
1. INTRODUCTORY. Northrop Grumman Corporation, a Delaware corporation
("Company"), proposes to issue and sell from time to time [warrants ("Warrants")
to purchase] shares of its ________________ ("Common Stock") (including any
[Warrants] [shares of Common Stock] issued and sold pursuant to the terms of any
over allotment option, if any) registered under the registration statement
referred to in Section 2(a) ("Registered Securities"). Particular offerings of
the Registered Securities will be sold pursuant to a Terms Agreement referred to
in Section 3, for resale in accordance with terms of offering determined at the
time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Securities". The firm or firms which agree to purchase the
Securities are hereinafter referred to as the "Underwriters" of such Securities,
and the representative or representatives of the Underwriters, if any, specified
in a Terms Agreement referred to in Section 3 are hereinafter referred to as the
"Representatives"; provided, however, that if the Terms Agreement does not
specify any representative of the Underwriters, the term "Representatives", as
used in this Agreement (other than in Sections 2(b), 5(c) and 6 and the second
sentence of Section 3), shall mean the Underwriters.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 33-55143), including a prospectus,
relating to the Registered Securities has been filed with the Securities
and Exchange Commission ("Commission") and has become effective; no order
preventing or suspending the use of such Prospectus has been issued by the
Commission and no proceeding for that purpose has been threatened or
initiated by the Commission. Such registration statement, as amended at
the time of any Terms Agreement referred to in Section 3, is hereinafter
referred to as the "Registration Statement," and the prospectus included in
such Registration Statement, as supplemented as contemplated by Section 3
to reflect the terms of the Securities and the terms of offering thereof,
as first filed with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") under the Securities Act of 1933, as amended (the
"Act"), including all material filed pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and incorporated by reference
therein, is hereinafter referred to as the "Prospectus."
(b) On the effective date of the registration statement relating to
the Registered Securities, such registration statement conformed in all
respects to the requirements of the Act and the rules and regulations of
the Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and on the date of each Terms Agreement referred to in Section
3, the Registration Statement and the Prospectus will conform in all
respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents will include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not
<PAGE>
misleading, except that the foregoing does not apply to statements in or
omissions from any of such documents based upon written information
furnished to the Company by any Underwriter through the Representatives, if
any, specifically for use therein.
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act and
the Exchange Act, as applicable, and the Rules and Regulations, and none of
such documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein not necessary to
make the statements therein not misleading.
(d) Each of the Company and its significant subsidiaries listed on
Schedule A hereto (each, a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
organization and has the requisite corporate power and authority to carry
on its business as currently being conducted, to own, lease and operate its
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction where the
operation, ownership or leasing of property or the conduct of its business
requires such qualification, except where the failure to be so qualified
would not, singly or in the aggregate, have a material adverse effect on
the properties, business, results of operations, condition (financial or
otherwise), affairs or prospects of the Company and the Subsidiaries, taken
as a whole (a "Material Adverse Effect").
(e) All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and non-
assessable, are not subject to any preemptive rights and conform to the
description thereof contained in the Prospectus. All of the issued and
outstanding shares of capital stock of, or other ownership interest in,
each Subsidiary have been duly and validly authorized and issued and are
fully paid and non-assessable and not subject to any preemptive rights, and
all of the shares of capital stock of, or other ownership interests in,
each Subsidiary are owned, directly or through Subsidiaries, by the
Company. Except as set forth in the Prospectus, all such shares of capital
stock are owned free and clear of any security interest, mortgage, pledge,
claim, lien or encumbrance (each, a "Lien"). There are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments or sale or Liens related to or entitling any person to purchase
or otherwise to acquire any shares of the capital stock of, or other
ownership interest in, any Subsidiary.
(f) [The Securities have been duly authorized and validly issued, are
fully paid and nonassessable and free of preemptive rights;] [Upon the
exercise of the Securities and the payment of the exercise price contained
therein, the Common Stock to be issued upon such exercise will be duly
authorized, validly issued, fully paid and non-assessable and free of any
preemptive rights;] the Securities conform to the description thereof
contained in the Prospectus; the stockholders of the Company have no
preemptive rights with respect to the Securities; and the Securities when
so issued, delivered and sold, will conform, to the description thereof
contained in the Prospectus.
(g) The Warrant Agreement by and between the Company and
______________________, as warrant agent (the "Warrant Agreement"), has
been duly authorized and validly executed
2
<PAGE>
and delivered by the Company and constitutes a valid and legally binding
agreement of the Company, enforceable against the Company in accordance
with its terms.]
(h) Each of the firms of accountants that has certified or shall
certify the applicable consolidated financial statements and supporting
schedules of the Company and/or Grumman Corporation ("Grumman"), as the
case may be, filed or to be filed with the Commission as part of the
Registration Statement and the Prospectus or incorporated by reference
therein are independent public accountants with respect to the Company and
the Subsidiaries, as required by the Act. The consolidated historical and
PRO FORMA financial statements, together with related schedules and notes,
set forth in the Prospectus and the Registration Statement or incorporated
by reference therein comply as to form in all material respects with the
requirements of the Act. Such historical financial statements fairly
present the consolidated financial position of the Company, Grumman
and the Subsidiaries at the respective dates indicated and the results of
their operations and their cash flows for the respective periods indicated,
in accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout such periods. Such PRO FORMA financial
statements have been prepared on the basis consistent with such historical
statements, except for the PRO FORMA adjustments specified therein, and
give effect to assumptions made on a reasonable basis and present fairly
the historical and proposed transactions contemplated by the Prospectus and
this Agreement. The other financial and statistical information and data
included in the Prospectus and in the Registration Statement, historical
and PRO FORMA, are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books
and records of the Company and Grumman.
(i) No holder of any security of the Company has or will have any
right to require the registration of such security by virtue of any
transaction contemplated by this Agreement [or the Warrant Agreement].
(j) The Company has not (i) taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities or (ii) since the initial filing of the Registration
Statement (A) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
3. PURCHASE AND OFFERING OF SECURITIES. The obligation of the
Underwriters to purchase the Securities will be evidenced by an exchange of
telegraphic or other written communications ("Terms Agreement") at the time the
Company determines to sell the Securities. The Terms Agreement will incorporate
by reference the provisions of this Agreement, except as otherwise provided
therein, and will specify the firm or firms which will be Underwriters, the
names of any Representatives, the number of shares to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters, the amount of
the over allotment option, if any, and the terms of the Securities not already
specified, including, but not limited to dividends. The Terms Agreement will
also specify the time and date of delivery and payment (such time and date, or
such other time not later than seven full business days thereafter as the
Representatives and the Company agree as the time for payment and delivery,
being herein and in the Terms Agreement referred to as the "Closing Date"), the
place of delivery and payment and any details of the terms of offering that
should be reflected in the prospectus supplement relating to the offering of the
Securities. The obligations of
3
<PAGE>
the Underwriters to purchase the Securities will be several and not joint. It
is understood that the Underwriters propose to offer the Securities for sale as
set forth in the Prospectus. The Securities delivered to the Underwriters on
the Closing Date will be in definitive, fully registered form, in such
denominations and registered in such names as the Underwriters may request.
4. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters that it will furnish to Latham & Watkins, counsel for the
Underwriters, one signed copy of the registration statement relating to the
Registered Securities, including all exhibits, in the form it became effective
and of all amendments thereto and that, in connection with each offering of
Securities:
(a) The Company will file the Prospectus with the Commission pursuant
to and in accordance with Rule 424(b)(2) (or, if applicable and if
consented to by the Representatives, subparagraph (5)) not later than the
second business day following the execution and delivery of the Terms
Agreement.
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will
also advise the Representatives promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the Prospectus to comply with the Act, the Company promptly
will prepare and file with the Commission an amendment or supplement which
will correct such statement or omission or an amendment which will effect
such compliance. Neither the Representatives' consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5.
(d) As soon as practicable following the issuance and sale of any of
the Registered Securities, the Company will make generally available to its
security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will comply with the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related Prospectus, any
related preliminary prospectus supplement, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as are reasonably requested.
(f) The Company will arrange for the qualification of the Securities
for sale under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as
required for the distribution.
4
<PAGE>
(g) During the period of 5 years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year a copy of its annual report to
stockholders for such year, and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission under
the Exchange Act or mailed to stockholders, and (ii) from time to time,
such other information concerning the Company as the Representatives may
reasonably request.
(h) The Company will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse the Underwriters
for any expenses (including fees and disbursements of counsel) incurred by
them in connection with qualification of the Registered Securities for sale
and determination of their eligibility for investment under the laws of
such jurisdictions as the Representatives may designate pursuant to Section
4(f) hereof and the printing of memoranda relating thereto, for any fees
charged by investment rating agencies for the rating of the Securities, for
fees charged by the National Association of Securities Dealers, Inc. and
for expenses incurred in distributing the Prospectus, any preliminary
prospectuses and any preliminary prospectus supplements to Underwriters.
It is understood, however, that, except as provided in this Section,
Section 6 and Section 8 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Securities by them, and any advertising expenses
connected with any offers they may make.
(i) For a period beginning at the time of execution of the Terms
Agreement and ending 90 days after the Closing Date, without the prior
consent of the Representatives, the Company will not offer, sell, contract
to sell or otherwise dispose of any shares of capital stock of the Company.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the several Underwriters to purchase and pay for the Securities will be subject
to the accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Deloitte & Touche L.L.P. confirming that they are independent
public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating in effect that:
(i) in their opinion, the consolidated financial statements
and schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement on Auditing Standards
No. 71, "Interim Financial Information" on the
5
<PAGE>
unaudited condensed consolidated financial statements incorporated by
reference in the Registration Statement;
(iii) on the basis of the procedures referred to in (ii) above,
and inquiries of officials of the Company who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that: any modifications should be made to the
unaudited condensed consolidated financial statements incorporated by
reference in the Registration Statement for them to be in conformity
with generally accepted accounting principles, and such unaudited
condensed financial statements incorporated by reference in the
Registration Statement do not comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(iv) on the basis of reading the unaudited pro forma condensed
consolidated statement of earnings for the year ended December 31,
1993 and the three months ended March 31, 1994, incorporated by
reference in the Registration Statement, and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters, (x) nothing came to their attention that caused
them to believe that such unaudited pro forma condensed consolidated
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of Rule 11-02 of
Regulation S-X and (y) they have proven the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
the unaudited pro forma condensed consolidated financial statements;
and
(v) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information, including the ratio of earnings to fixed charges,
contained in such prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
Subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into such prospectus shall be deemed included in such prospectus
for purposes of this subsection.
(b) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Arthur Andersen confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating in effect that:
(i) in their opinion, the consolidated financial statements
and schedules of Grumman and its subsidiaries examined by them and
incorporated by reference in the Registration Statement relating to
the Registered Securities, as amended at the date of such letter,
comply in form in all material respects with
6
<PAGE>
the applicable accounting requirements of the Act and the related
published Rules and Regulations; and
(ii) they have performed procedures specified by the
Representatives with respect to the unaudited consolidated financial
statements of Grumman and its subsidiaries incorporated by reference
in the Registration Statement, including (A) reviewing of the minutes
of meetings of the stockholders of Grumman, the board of directors of
Grumman and any committees thereof as set forth in the minute books at
March 31, 1994, (B) reading the unaudited consolidated financial
statements of Grumman and its subsidiaries incorporated by reference
in the Registration Statement and agreeing the amounts contained
therein with Grumman's accounting records as of March 31, 1994 and for
the three-month period then ended and (C) inquiring of certain
officials of Grumman who have responsibility for financial and
accounting matters whether the unaudited condensed consolidated
financial statements incorporated by reference in the Registration
Statement (x) are in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of
the audited consolidated financial statements of Grumman and its
subsidiaries incorporated by reference in the Registration Statement
and (y) comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations.
All financial statements and schedules included in material incorporated by
reference into such prospectus shall be deemed included in such prospectus
for purposes of this subsection.
(c) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Ernst & Young confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating in effect that (i) they
audited the consolidated balance sheets of [Vought Aircraft Company] [VAC
Acquisition Corp.] ("Vought") and its subsidiaries as of December 31, 1993
and the related consolidated statements of income and retained earnings and
cash flows for the year then ended (the "Vought Financial Statements") and
(ii) they have compared specified dollar amounts and other financial
information with respect Vought contained in the prospectus with the
financial information contained in the Vought Financial Statements and have
found such dollar amounts and other financial information to be in
agreement with such results.
(d) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(e) Subsequent to the execution of the Terms Agreement, there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or its Subsidiaries which, in the judgment of a majority in
interest of the Underwriters, including any Representatives,
7
<PAGE>
materially impairs the investment quality of the Securities or the
Registered Securities; (ii) any downgrading in the rating of any debt
securities or preferred stock of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Act), or any public announcement that any such organization has
under surveillance or review its rating of any debt securities or preferred
stock of the Company (other than an announcement with positive implications
of a possible upgrading, and no implication of a possible downgrading, of
such rating); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters, including
any Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Securities.
(f) The Representatives shall have received an opinion, dated the
Closing Date, of Sheppard, Mullin, Richter & Hampton, counsel for the
Company, to the effect that:
(i) Each of the Company and its Subsidiaries has been duly
incorporated and is an existing corporation in good standing under the
laws of the State of its jurisdiction of incorporation, with corporate
power and authority to own its properties and conduct its business as
described in the Prospectus; and, to the best of such counsel's
knowledge, each of the Company and its Subsidiaries is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which it owns or leases substantial properties or in
which the conduct of its business requires such qualification, except
where the failure to qualify would not have a Material Adverse Effect;
(ii) The Company has authorized capitalization as set forth in
the Prospectus;
(iii) [The Securities have been duly authorized and validly
issued, are fully paid and nonassessable and free of preemptive
rights;] [Upon the exercise of the Securities and the payment of the
exercise price contained therein, the Common Stock to be issued upon
such exercise will be duly authorized, validly issued, fully paid and
non-assessable and free of any preemptive rights;] the Securities
conform to the description thereof contained in the Prospectus; and
the stockholders of the Company have no preemptive rights with respect
to the Securities;
(iv) To the best of such counsel's knowledge, after due
inquiry, no holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security
of the Company;
(v) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by the Terms
Agreement (including the provisions of this Agreement) [or the Warrant
Agreement] in connection with the issuance or sale of the
8
<PAGE>
Securities by the Company, except such as have been obtained and made
under the Act and such as may be required under state securities laws;
(vi) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement) [and the
Warrant Agreement] and the issuance and sale of the Securities and
compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any Federal, California or Delaware
statute, any rule, regulation or order of any governmental agency
or body or any court having jurisdiction over the Company or any of
its properties or any material agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of
the properties of the Company is subject, or the charter or by-laws of
the Company, and the Company has full power and authority to
authorize, issue and sell the Securities as contemplated by the Terms
Agreement (including the provisions of this Agreement);
(vii) After due inquiry, such counsel does not know of any
legal or governmental proceeding pending or threatened to which the
Company or any of its Subsidiaries is a party or to which any of their
respective property is subject which is required to be described in
the Registration Statement or the Prospectus and is not so described;
(viii) The Registration Statement has become effective under the
Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein, and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated
under the Act, and the Registration Statement and the Prospectus
(other than the financial statements and notes thereto and supporting
schedules and other financial and statistical information contained
therein as to which such counsel need express no opinion) complied as
to form in all material respects with the requirements of the Act and
the Rules and Regulations; and
(ix) The Terms Agreement (including the provisions of this
Agreement) have been duly authorized, executed and delivered by the
Company.
Such counsel shall also state that on the basis of their involvement
in the preparation of the Registration Statement and although they have not
verified the accuracy or completeness of the statements contained therein
or in any amendment thereto, nothing has come to the attention of such
counsel which causes them to believe that the Registration Statement or the
Prospectus (other than the financial statements and notes thereto and
supporting schedules and other financial and statistical information
contained therein) contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and such counsel
does not know of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described and filed
as required; it being understood that such counsel need express no
9
<PAGE>
opinion as to the financial statements or other financial data contained
in the Registration Statement or the Prospectus.
In rendering such opinion, such counsel shall opine as to the effect
of the federal laws of the United States, the internal laws of the States
of California and New York and the General Corporation Laws of the State of
Delaware. As to matters involving application of the laws of the State of
New York, to the extent specified in such opinion, such counsel may rely on
the opinion of other counsel of good standing believed to be reliable and
who are satisfactory to counsel for the Underwriters.
(g) The Representatives shall have received an opinion, dated the
Closing Date, of Richard R. Molleur, Corporate Vice President and General
Counsel of the Company, to the effect that:
(i) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement) [and the
Warrant Agreement] and the issuance and sale of the Securities and
compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any Federal, California or Delaware
statute or any rule, regulation or order of any governmental agency or
body or any court having jurisdiction over the Company or any of its
properties or any material agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of
its properties is subject, or the charter or by laws of the Company,
and the Company has the power and authority to authorize, issue and
sell the Securities as contemplated by the Terms Agreement (including
the provisions of this Agreement); and
(ii) Such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company or any of its
Subsidiaries is a party or to which any of their respective properties
is subject which is required to be described in the Registration
Statement or the Prospectus and is not so described, or of any
contract or other document which is required to be described in the
Registration Statement or the Prospectus or is required to be filed as
an exhibit to the Registration Statement which is not described or
filed as required.
In rendering such opinion, such counsel shall opine as to the effect of the
federal laws of the United States, the internal laws of the State of
California and the General Corporation Laws of the State of Delaware.
(h) The Representatives shall have received from Latham & Watkins,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus and other related
matters as they may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(i) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation,
10
<PAGE>
shall state that the representations and warranties of the Company in this
Agreement [and the Warrant Agreement] are true and correct, that the
Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing
Date, that no stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings for
that purpose have been instituted or are contemplated by the Commission and
that, subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change in the financial
position or results of operation of the Company and its Subsidiaries
except as set forth in or contemplated by the Prospectus or as described in
such certificate.
(j) The Representatives shall have received a letter dated the
Closing Date, of Deloitte & Touche L.L.P which reconfirms the matters set
forth in their letter delivered pursuant to subsection (a) of this Section
and which states in effect that:
(i) in their opinion, the consolidated financial statements
and schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement on Auditing Standards
No. 71, "Interim Financial Information" on the unaudited condensed
consolidated financial statements incorporated by reference in the
Registration Statement;
(iii) on the basis of the procedures referred to in (ii) above,
and inquiries of officials of the Company who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that: any modifications should be made to the
unaudited condensed consolidated financial statements incorporated by
reference in the Registration Statement for them to be in conformity
with generally accepted accounting principles, and such unaudited
condensed financial statements incorporated by reference in the
Registration Statement do not comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(iv) on the basis of reading the unaudited pro forma condensed
consolidated statement of earnings for the year ended December 31,
1993 and the three months ended March 31, 1994, incorporated by
reference in the Registration Statement, and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters, (x) nothing came to their attention that caused
them to believe that such unaudited pro forma condensed consolidated
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of Rule 11-02 of
Regulation S-X and (y) they have proven the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
the unaudited pro forma condensed combined financial statements;
11
<PAGE>
(v) on the basis of the review referred to in (ii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements, if any,
included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section do not
comply in form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included in the Prospectus;
(B) the unaudited capsule information, if any,
included in the Prospectus does not agree with the amounts set
forth in the unaudited consolidated financial statements from
which it was derived or was not determined on a basis
substantially consistent with that of the audited financial
statements included in the Prospectus;
(C) at the date of the latest available balance
sheet read by such accountants, or at a subsequent specified
date not more than five days prior to the Closing Date, there
was any change in the capital stock or any increase in
short-term indebtedness or long-term debt of the Company and
consolidated Subsidiaries or, at the date of the latest
available balance sheet read by such accountants, there was
any decrease in consolidated net current assets or net assets,
as compared with amounts shown on the latest balance sheet
included in the Prospectus; or
(D) for the period from the date of the latest
income statement included in the Prospectus to the closing
date of the latest available income statement read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year and with the period
of corresponding length ended the date of the latest income
statement included in the Prospectus, in consolidated net
sales, net operating income, income before extraordinary items
or net income or in the ratio of earnings to fixed charges;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vi) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section (in each case to
the extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company and its Subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such records
by analysis or computation) with the results obtained from inquiries,
a reading of such general accounting records and other
12
<PAGE>
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such
letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for the purposes of this subsection.
(k) The Representatives shall have received a letter, dated the
Closing Date, of Arthur Andersen, which reconfirms the matters set forth in
their letter delivered pursuant to subsection (b) of this Section and which
states in effect that:
(i) in their opinion, the consolidated financial statements
and schedules of Grumman and its subsidiaries examined by them and
incorporated by reference in the Registration Statement relating to
the Registered Securities, as amended at the date of such letter,
comply in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations; and
(ii) they have performed procedures specified by the
Representatives with respect to the unaudited consolidated financial
statements of Grumman and its subsidiaries incorporated by reference
in the Registration Statement, including (A) reviewing of the minutes
of meetings of the stockholders of Grumman, the board of directors of
Grumman and any committees thereof as set forth in the minute books at
March 31, 1994, (B) reading the unaudited consolidated financial
statements of Grumman and its subsidiaries incorporated by reference
in the Registration Statement and agreeing the amounts contained
therein with Grumman's accounting records as of March 31, 1994 and for
the three-month period then ended and (C) inquiring of certain
officials of Grumman who have responsibility for financial and
accounting matters whether the unaudited condensed consolidated
financial statements incorporated by reference in the Registration
Statement (x) are in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of
the audited consolidated financial statements of Grumman and its
subsidiaries incorporated by reference in the Registration Statement
and (v) comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for the purposes of this subsection.
(l) The Representatives shall have received a letter, dated the
Closing Date, of Ernst & Young, which reconfirms the matters set forth in
their letter delivered pursuant to subsection (c) of this Section and which
states in effect that (i) they are independent public accountants within
the meaning of the Act and the applicable published Rules and Regulations
thereunder, (ii) they audited the Vought Financial Statements and (iii)
they have compared specified dollar amounts and other financial information
with respect Vought contained in the prospectus with the financial
13
<PAGE>
information contained in the Vought Financial Statements and have found
such dollar amounts and other financial information to be in agreement
with such results.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as they reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein.
(b) Each Underwriter will, severally and not jointly, indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives, if any, specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnify-
14
<PAGE>
ing party of the commencement thereof, the indemnifying party will be entitled
to participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. In any such action, any
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
action (including any impleaded parties) include both the indemnifying party and
the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any action or related
actions in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
15
<PAGE>
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed the Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
7. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters default
in their obligations to purchase Securities under the Terms Agreement and the
number of shares of the Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
number of shares of the Securities, the Representatives may make arrangements
satisfactory to the Company for the purchase of such Securities by other
persons, including any of the Underwriters, but if no such arrangements are made
by the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments under this Agreement
and the Terms Agreement, to purchase the Securities that such defaulting
Underwriters agreed but failed to purchase. If any Underwriter or Underwriters
so default and the number of shares of the Securities with respect to which such
default or defaults occur exceeds 10% of the total number of shares of the
Securities and arrangements satisfactory to the Representatives and the Company
for the purchase of such Securities by other persons are not made within 36
hours after such default, such Terms Agreement will terminate without liability
on the part of any nondefaulting Underwriter or the Company, except as provided
in Section 8. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section.
The foregoing obligations and agreements set forth in this Section will not
apply if the Terms Agreement specifies that such obligations and agreements will
not apply.
8. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person and will survive delivery of and
payment for the Securities. If the Terms Agreement is terminated pursuant to
Section 7 or if for any reason the purchase of the Securities by the
Underwriters under the Terms Agreement is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4 and the respective obligations of the Company and the Underwriters
pursuant to Section 6 shall remain in effect. If the purchase of the Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 7 or the occurrence of
any event specified in clause (iii), (iv) or (v) of Section 5(c), the Company
will reimburse the Underwriters for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Securities.
9. NOTICES. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their addresses
16
<PAGE>
furnished to the Company in writing for the purpose of communications hereunder
or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at Northrop Grumman Corporation, 1840 Century Park East, Los
Angeles, California 90067, Attention: _________________.
10. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the Company and such Underwriters as are identified in Terms
Agreements and their respective successors and the officers and directors and
controlling persons referred to in Section 6, and no other person will have any
right or obligation hereunder.
11. APPLICABLE LAW. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
NORTHROP GRUMMAN CORPORATION
By......................................
Name:
Title:
CS First Boston Corporation
[INSERT NAMES(S) OF OTHER
REPRESENTATIVES OR UNDERWRITERS]
[On behalf of--themselves--itself--and
as Representative[s] of the Several]
[As] Underwriter[s]
[By CS First Boston Corporation]
By......................................
Name:
Title:
17
<PAGE>
SCHEDULE A
GRUMMAN CORPORATION
<PAGE>
EXHIBIT 1-2
NORTHROP GRUMMAN CORPORATION
PREFERRED STOCK
[WARRANTS TO PURCHASE PREFERRED STOCK]
UNDERWRITING AGREEMENT
1. INTRODUCTORY. Northrop Grumman Corporation, a Delaware corporation
("Company"), proposes to issue and sell from time to time [warrants ("Warrants")
to purchase] shares of its preferred stock [(including any shares of preferred
stock issued and sold pursuant to the terms of any over allotment option, if
any)] registered under the registration statement referred to in Section 2(a)
("Registered Securities"). The Registered Securities may be issued in one or
more series, which series may vary as to dividend rates, redemption provisions,
selling prices and other terms, with all such terms for any particular series of
the Registered Securities being determined at the time of sale. Particular
series of the Registered Securities will be sold pursuant to a Terms Agreement
referred to in Section 3, for resale in accordance with terms of offering
determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Securities". The firm or firms which agree to purchase the
Securities are hereinafter referred to as the "Underwriters" of such Securities,
and the representative or representatives of the Underwriters, if any, specified
in a Terms Agreement referred to in Section 3 are hereinafter referred to as the
"Representatives"; provided, however, that if the Terms Agreement does not
specify any representative of the Underwriters, the term "Representatives", as
used in this Agreement (other than in Sections 2(b), 5(c) and 6 and the second
sentence of Section 3), shall mean the Underwriters.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 33-55143), including a prospectus,
relating to the Registered Securities has been filed with the Securities
and Exchange Commission ("Commission") and has become effective; no order
preventing or suspending the use of such Prospectus has been issued by the
Commission and no proceeding for that purpose has been threatened or
initiated by the Commission. Such registration statement, as amended at
the time of any Terms Agreement referred to in Section 3, is hereinafter
referred to as the "Registration Statement", and the prospectus included in
such Registration Statement, as supplemented as contemplated by Section 3
to reflect terms of the Securities and the terms of offering thereof, as
first filed with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") under the Securities Act of 1933, as amended, (the
"Act"), including all material filed pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and incorporated by reference
therein, is hereinafter referred to as the "Prospectus".
(b) On the effective date of the registration statement relating to
the Registered Securities, such registration statement conformed in all
respects to the requirements of the Act and the rules and regulations of
the Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and on the date of each Terms Agreement referred to in
Section 3, the Registration Statement and the Prospectus
<PAGE>
will conform in all respects to the requirements of the Act and the Rules
and Regulations, and neither of such documents will include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, except that the foregoing does not apply to statements in or
omissions from any of such documents based upon written information
furnished to the Company by any Underwriter through the Representatives, if
any, specifically for use therein.
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act and
the Exchange Act, as applicable, and the Rules and Regulations, and none of
such documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(d) Each of the Company and its significant subsidiaries listed on
Schedule A hereto (each, a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
organization and has the requisite corporate power and authority to carry
on its business as currently being conducted, to own, lease and operate
its properties, and each is duly qualified and is in good standing as a
foreign corporation authorized to do business in each jurisdiction where
the operation, ownership or leasing of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified would not, singly or in the aggregate, have a material adverse
effect on the properties, business, results of operations, condition
(financial or otherwise), affairs or prospects of the Company and the
Subsidiaries, taken as a whole (a "Material Adverse Effect").
(e) All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and non-
assessable, are not subject to any preemptive rights and conform to the
description thereof contained in the Prospectus. All of the issued and
outstanding shares of capital stock of, or other ownership interest in,
each Subsidiary have been duly and validly authorized and issued and are
fully paid and non-assessable and not subject to any preemptive rights, and
all of the shares of capital stock of, or other ownership interests in,
each Subsidiary are owned, directly or through Subsidiaries, by the
Company. Except as set forth in the Prospectus, all such shares of capital
stock are owned free and clear of any security interest, mortgage, pledge,
claim, lien or encumbrance (each, a "Lien"). There are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments or sale or Liens related to or entitling any person to purchase
or otherwise to acquire any shares of the capital stock of, or other
ownership interest in, any Subsidiary.
(f) [The Securities have been duly authorized; the Securities other
than any Contract Securities have been validly issued and are fully paid
and nonassessable; any Contract Securities, when issued, delivered and sold
pursuant to Delayed Delivery Contracts, will be validly issued, fully paid
and nonassessable; and the Securities other than any Contract Securities
conform, and any Contract Securities, when so issued, delivered and sold,
will conform, to the description thereof contained in the Prospectus.]
[Upon the exercise of the Securities and the payment of the exercise price
contained therein the Preferred Stock to be issued upon such exercise will
be duly authorized, validly issued, fully paid and non-assessable and free
of any preemptive rights;] the Securities conform to the description
thereof
2
<PAGE>
contained in the Prospectus; and the stockholders of the Company have no
preemptive rights with respect to the Securities.
[(g) The Warrant Agreement by and between the Company and
__________________, as warrant agent (the "Warrant Agreement"), has been
duly authorized and validly executed and delivered by the Company and
constitutes a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms.]
(h) Each of the firms of accountants that has certified or shall
certify the applicable consolidated financial statements and supporting
schedules of the Company and/or Grumman Corporation ("Grumman"), as the
case may be, filed or to be filed with the Commission as part of the
Registration Statement and the Prospectus or incorporated by reference
therein are independent public accountants with respect to the Company and
the Subsidiaries, as required by the Act. The consolidated historical and
PRO FORMA financial statements, together with related schedules and notes,
set forth in the Prospectus and the Registration Statement or incorporated
by reference therein comply as to form in all material respects with the
requirements of the Act. Such historical financial statements fairly
present the consolidated financial position of the Company, Grumman and the
Subsidiaries at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated, in
accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout such periods. Such PRO FORMA financial
statements have been prepared on the basis consistent with such historical
statements, except for the PRO FORMA adjustments specified therein, and
give effect to assumptions made on a reasonable basis and present fairly
the historical and proposed transactions contemplated by the Prospectus and
this Agreement. The other financial and statistical information and data
included in the Prospectus and in the Registration Statement, historical
and PRO FORMA, are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books
and records of the Company and Grumman.
(i) No holder of any security of the Company has or will have any
right to require the registration of such security by virtue of any
transaction contemplated by this Agreement [or the Warrant Agreement].
(j) The Company has not (i) taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities or (ii) since the initial filing of the Registration
Statement (A) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
3. PURCHASE AND OFFERING OF SECURITIES. The obligation of the
Underwriters to purchase the Securities will be evidenced by an exchange of
telegraphic or other written communications ("Terms Agreement") at the time the
Company determines to sell the Securities. The Terms Agreement will incorporate
by reference the provisions of this Agreement, except as otherwise provided
therein, and will specify the firm or firms which will be Underwriters, the
names of any Representatives, the number of shares to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters, the amount of
the over allotment option, if any, and the terms of the Securities not already
specified, including, but not limited to dividends, any redemption provisions,
3
<PAGE>
any sinking fund requirements, any conversion rights and provisions and whether
any of the Securities may be sold to institutional investors pursuant to Delayed
Delivery Contracts (as defined below). The Terms Agreement will also specify
the time and date of delivery and payment (such time and date, or such other
time not later than seven full business days thereafter as the Representatives
and the Company agree as the time for payment and delivery, being herein and in
the Terms Agreement referred to as the "Closing Date"), the place of delivery
and payment and any details of the terms of offering that should be reflected in
the prospectus supplement relating to the offering of the Securities. The
obligations of the Underwriters to purchase the Securities will be several and
not joint. It is understood that the Underwriters propose to offer the
Securities for sale as set forth in the Prospectus. The Securities delivered to
the Underwriters on the Closing Date will be in definitive, fully registered
form, in such denominations and registered in such names as the Underwriters may
request.
If the Terms Agreement provides for sales of Securities pursuant to delayed
delivery contracts, the Company authorizes the Underwriters to solicit offers to
purchase Securities pursuant to delayed delivery contracts substantially in the
form of Annex I attached hereto ("Delayed Delivery Contracts") with such changes
therein as the Company may authorize or approve. Delayed Delivery Contracts are
to be with institutional investors, including commercial and savings banks,
insurance companies, pension funds, investment companies and educational and
charitable institutions. On the Closing Date the Company will pay, as
compensation, to the Representatives for the accounts of the Underwriters, the
fee set forth in such Terms Agreement in respect of the number of shares of
Securities to be sold pursuant to Delayed Delivery Contracts ("Contract
Securities"). The Underwriters will not have any responsibility in respect of
the validity or the performance of Delayed Delivery Contracts. If the Company
executes and delivers Delayed Delivery Contracts, the Contract Securities will
be deducted from the Securities to be purchased by the several Underwriters and
the number of shares of Securities to be purchased by each Underwriter will be
reduced pro rata in proportion to the number of shares of Securities set forth
opposite each Underwriter's name in such Terms Agreement, except to the extent
that the Representatives determine that such reduction shall be otherwise than
pro rata and so advise the Company. The Company will advise the Representatives
not later than the business day prior to the Closing Date of the number of
shares of Contract Securities.
4. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters that it will furnish to Latham & Watkins, counsel for the
Underwriters, one signed copy of the registration statement relating to the
Registered Securities, including all exhibits, in the form it became effective
and of all amendments thereto and that, in connection with each offering of
Securities:
(a) The Company will file the Prospectus with the Commission pursuant
to and in accordance with Rule 424(b)(2) (or, if applicable and if
consented to by the Representatives, subparagraph (5)) not later than the
second business day following the execution and delivery of the Terms
Agreement.
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will
also advise the Representatives promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use
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<PAGE>
its best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the Prospectus to comply with the Act, the Company promptly
will prepare and file with the Commission an amendment or supplement which
will correct such statement or omission or an amendment which will effect
such compliance. Neither the Representatives' consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5.
(d) As soon as practicable following the issuance and sale of any of
the Registered Securities, the Company will make generally available to its
security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will comply with the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related Prospectus, any
related preliminary prospectus supplement, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as are reasonably requested.
(f) The Company will arrange for the qualification of the Securities
for sale under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as
required for the distribution.
(g) During the period of 5 years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year a copy of its annual report to
stockholders for such year, and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission under
the Exchange Act or mailed to stockholders, and (ii) from time to time,
such other information concerning the Company as the Representatives may
reasonably request.
(h) The Company will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse the Underwriters
for any expenses (including fees and disbursements of counsel) incurred by
them in connection with qualification of the Registered Securities for sale
and determination of their eligibility for investment under the laws of
such jurisdictions as the Representatives may designate pursuant to Section
4(f) hereof and the printing of memoranda relating thereto, for any fees
charged by investment rating agencies for the rating of the Securities, for
fees charged by the National Association of Securities Dealers, Inc. and
for expenses incurred in distributing the Prospectus, any preliminary
prospectuses and any preliminary prospectus supplements to the
Underwriters. It is understood, however, that, except as provided in this
Section, Section 6 and Section 8 hereof, the Underwriters will pay all of
their own costs and expenses, including
5
<PAGE>
the fees of their counsel, transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any offers
they may make.
(i) For a period beginning at the time of execution of the Terms
Agreement and ending 90 days after the Closing Date, without the prior
consent of the Representatives, the Company will not offer, sell, contract
to sell or otherwise dispose of any shares of capital stock of the Company.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the several Underwriters to purchase and pay for the Securities will be subject
to the accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Deloitte & Touche L.L.P., respectively, confirming that they
are independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating in
effect that:
(i) in their opinion, the consolidated financial statements
and schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement on Auditing Standards
No. 71, "Interim Financial Information" on the unaudited condensed
consolidated financial statements incorporated by reference in the
Registration Statement;
(iii) on the basis of the procedures referred to in (ii) above,
and inquiries of officials of the Company who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that: any modifications should be made to the
unaudited condensed consolidated financial statements incorporated by
reference in the Registration Statement for them to be in conformity
with generally accepted accounting principles, and such unaudited
condensed financial statements incorporated by reference in the
Registration Statement do not comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(iv) on the basis of reading the unaudited pro forma condensed
consolidated statement of earnings for the year ended December 31,
1993 and the three months ended March 31, 1994, incorporated by
reference in the Registration Statement, and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters, (x) nothing came to their attention that caused
them to believe that such unaudited pro forma condensed consolidated
financial statements do not comply as to form in all material respects
with the applicable accounting requirements
6
<PAGE>
of Rule 11-02 of Regulation S-X and (y) they have proven the
arithmetic accuracy of the application of the pro forma adjustments to
the historical amounts in the unaudited pro forma condensed
consolidated financial statements; and
(v) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information, including the ratio of earnings to fixed charges,
contained in such prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
Subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into such prospectus shall be deemed included in such prospectus
for purposes of this subsection.
(b) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Arthur Andersen confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating in effect that:
(i) in their opinion, the consolidated financial statements
and schedules of Grumman and its subsidiaries examined by them and
incorporated by reference in the Registration Statement relating to
the Registered Securities, as amended at the date of such letter,
comply in form in all material respects with the applicable
accounting requirements of the Act and the related published Rules and
Regulations; and
(ii) they have performed procedures specified by the
Representatives with respect to the unaudited consolidated financial
statements of Grumman and its subsidiaries incorporated by reference
in the Registration Statement, including (A) reviewing of the minutes
of meetings of the stockholders of Grumman, the board of directors of
Grumman and any committees thereof as set forth in the minute books at
March 31, 1994, (B) reading the unaudited consolidated financial
statements of Grumman and its subsidiaries incorporated by reference
in the Registration Statement and agreeing the amounts contained
therein with Grumman's accounting records as of March 31, 1994 and for
the three-month period then ended and (C) inquiring of certain
officials of Grumman who have responsibility for financial and
accounting matters whether the unaudited condensed consolidated
financial statements incorporated by reference in the Registration
Statement (x) are in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of
the audited consolidated financial statements of Grumman and its
subsidiaries incorporated by reference in the Registration Statement
and (y) comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations.
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<PAGE>
All financial statements and schedules included in material incorporated
by reference into such prospectus shall be deemed included in such
prospectus for purposes of this subsection.
(c) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Ernst & Young confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating in effect that (i) they
audited the consolidated balance sheets of [Vought Aircraft Company]
[VAC Acquisition Corp.] ("Vought") and its subsidiaries as of December 31,
1993 and the related consolidated statements of income and retained
earnings and cash flows for the year then ended (the "Vought Financial
Statements") and (ii) they have compared specified dollar amounts and other
financial information with respect Vought contained in the prospectus with
the financial information contained in the Vought Financial Statements and
have found such dollar amounts and other financial information to be in
agreement with such results.
(d) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(e) Subsequent to the execution of the Terms Agreement, there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or its Subsidiaries which, in the judgment of a majority in
interest of the Underwriters, including any Representatives, materially
impairs the investment quality of the Securities or the Registered
Securities; (ii) any downgrading in the rating of any debt securities or
preferred stock of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities or preferred stock
of the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters, including
any Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Securities.
(f) The Representatives shall have received an opinion, dated the
Closing Date, of Sheppard, Mullin, Richter & Hampton, counsel for the
Company, to the effect that:
8
<PAGE>
(i) Each of the Company and its Subsidiaries has been duly
incorporated and is an existing corporation in good standing under the
laws of the State of its jurisdiction of incorporation, with corporate
power and authority to own its properties and conduct its business as
described in the Prospectus; and, to the best of such counsel's
knowledge, each of the Company and its Subsidiaries is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which it owns or leases substantial properties or in
which the conduct of its business requires such qualification, except
where the failure to qualify would not have a Material Adverse Effect;
(ii) The Company has authorized capitalization as set forth in
the Prospectus;
(iii) To the best of such counsel's knowledge, after due
inquiry, no holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security
of the Company;
(iv) [The Securities have been duly authorized; the Securities
other than any Contract Securities have been validly issued and are
fully paid and nonassessable; any Contract Securities, when issued,
delivered and sold pursuant to Delayed Delivery Contracts, will be
validly issued, fully paid and nonassessable; and the Securities other
than any Contract Securities conform, and any Contract Securities,
when so issued, delivered and sold, will conform, to the description
thereof contained in the Prospectus.] [Upon the exercise of the
Securities and the payment of the exercise price contained therein the
Preferred Stock to be issued upon such exercise will be duly
authorized, validly issued, fully paid and non-assessable and free of
any preemptive rights;] the Securities conform to the description
thereof contained in the Prospectus; and the stockholders of the
Company have no preemptive rights with respect to the Securities.
(v) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by the Terms
Agreement (including the provisions of this Agreement) [or the Warrant
Agreement] in connection with the issuance or sale of the Securities
by the Company, except such as have been obtained and made under the
Act and such as may be required under state securities laws;
(vi) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement) [, the Warrant
Agreement] and any Delayed Delivery Contracts and the issuance and
sale of the Securities and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any Federal,
California or Delaware statute or any rule, regulation or
order of any governmental agency or body or any court having
jurisdiction over the Company or any of its properties or any material
agreement or instrument to which the Company is a party or by which
the Company is bound or to which any of the properties of the Company
is subject, or the charter or by-laws of the Company, and the Company
has the power and authority to authorize, issue and sell the
Securities as contemplated by the Terms Agreement (including the
provisions of this Agreement);
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<PAGE>
(vii) After due inquiry, such counsel does not know of any
legal or governmental proceeding pending or threatened to which the
Company or any of its Subsidiaries is a party or to which any of their
respective property is subject which is required to be described in
the Registration Statement or the Prospectus and is not so described;
(viii) The Registration Statement has become effective under the
Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein, and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated
under the Act, and the Registration Statement and the Prospectus
(other than the financial statements and notes thereto and supporting
schedules and other financial and statistical information contained
therein as to which such counsel need express no opinion) complied as
to form in all material respects with the requirements of the Act and
the Rules and Regulations; and
(ix) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
Such counsel shall also state that on the basis of their involvement
in the preparation of the Registration Statement and although they have not
verified the accuracy or completeness of the statements contained therein
or in any amendment thereto, nothing has come to the attention of such
counsel which causes them to believe that the Registration Statement or the
Prospectus (other than the financial statements and notes thereto and
supporting schedules and other financial and statistical information
contained therein) contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and such counsel
does not know of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described and filed
as required; it being understood that such counsel need express no opinion
as to the financial statements or other financial data contained in the
Registration Statement or the Prospectus.
In rendering such opinion, such counsel shall opine as to the effect of the
federal laws of the United States, the internal laws of the States of
California and New York and the General Corporation Laws of the State of
Delaware. As to matters involving application of the laws of the State of
New York, to the extent specified in such opinion, such counsel may rely on
the opinion of other counsel of good standing believed to be reliable and
who are satisfactory to counsel for the Underwriters.
(g) The Representatives shall have received an opinion, dated the
Closing Date, of Richard R. Molleur, Corporate Vice President and General
Counsel of the Company, to the effect that:
10
<PAGE>
(i) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement) [, the Warrant
Agreement] and any Delayed Delivery Contracts and the issuance and
sale of the Securities and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any Federal,
California or Delaware statute or any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the
Company or any of its properties or any material agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of its properties is subject, or the charter or
by-laws of the Company, and the Company has the power and authority to
authorize, issue and sell the Securities as contemplated by the Terms
Agreement (including the provisions of this Agreement); and
(ii) Such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company or any of its
Subsidiaries is a party or to which any of their respective properties
is subject which is required to be described in the Registration
Statement or the Prospectus and is not so described, or of any
contract or other document which is required to be described in the
Registration Statement or the Prospectus or is required to be filed as
an exhibit to the Registration Statement which is not described or
filed as required.
In rendering such opinion, such counsel shall opine as to the effect of the
federal laws of the United States, the internal laws of the State of
California and the General Corporation Laws of the State of Delaware.
(h) The Representatives shall have received from Latham & Watkins,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus and other related
matters as they may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(i) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Company in this Agreement
[and the Warrant Agreement] are true and correct, that the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date, that no
stop order suspending the effectiveness of the Registration Statement or of
any part thereof has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission and that, subsequent
to the date of the most recent financial statements in the Prospectus,
there has been no material adverse change in the financial position or
results of operation of the Company and its Subsidiaries except as set
forth in or contemplated by the Prospectus or as described in such
certificate.
(j) The Representatives shall have received a letter, dated the
Closing Date, of Deloitte & Touche L.L.P., which reconfirms the matters set
forth in their letter delivered pursuant to subsection (a) of this Section
and which state in effect that:
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<PAGE>
(i) in their opinion, the consolidated financial statements
and schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement on Auditing Standards
No. 71, "Interim Financial Information" on the unaudited condensed
consolidated financial statements incorporated by reference in the
Registration Statement;
(iii) on the basis of the procedures referred to in (ii) above,
and inquiries of officials of the Company who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that: any modifications should be made to the
unaudited condensed consolidated financial statements incorporated by
reference in the Registration Statement for them to be in conformity
with generally accepted accounting principles, and such unaudited
condensed financial statements incorporated by reference in the
Registration Statement do not comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(iv) on the basis of reading the unaudited pro forma condensed
consolidated statement of earnings for the year ended December 31,
1993 and the three months ended March 31, 1994, incorporated by
reference in the Registration Statement, and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters, (x) nothing came to their attention that caused
them to believe that such unaudited pro forma condensed consolidated
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of Rule 11-02 of
Regulation S-X and (y) they have proven the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
the unaudited pro forma condensed combined financial statements;
(v) on the basis of the review referred to in (ii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements, if any,
included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section do not
comply in form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included in the Prospectus;
(B) the unaudited capsule information, if any,
included in the Prospectus does not agree with the amounts set
forth in the unaudited consolidated financial statements from
which it was derived or was not
12
<PAGE>
determined on a basis substantially consistent with that of
the audited financial statements included in the Prospectus;
(C) at the date of the latest available balance
sheet read by such accountants, or at a subsequent specified
date not more than five days prior to the Closing Date, there
was any change in the capital stock or any increase in
short-term indebtedness or long-term debt of the Company and
consolidated Subsidiaries or, at the date of the latest
available balance sheet read by such accountants, there was
any decrease in consolidated net current assets or net assets,
as compared with amounts shown on the latest balance sheet
included in the Prospectus; or
(D) for the period from the date of the latest
income statement included in the Prospectus to the closing
date of the latest available income statement read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year and with the period
of corresponding length ended the date of the latest income
statement included in the Prospectus, in consolidated net
sales, net operating income, income before extraordinary items
or net income or in the ratio of earnings to fixed charges;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vi) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section (in each case to
the extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company and its Subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such records
by analysis or computation) with the results obtained from inquiries,
a reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for the purposes of this subsection.
(k) The Representatives shall have received a letter, dated the
Closing Date, of Arthur Andersen, which reconfirms the matters set forth in
their letter delivered pursuant to subsection (b) of this Section and which
states in effect that:
(i) in their opinion, the consolidated financial statements
and schedules of Grumman and its subsidiaries examined by them and
incorporated by reference in the Registration Statement relating to
the Registered Securities, as amended at the date of such letter,
comply in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations; and
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(ii) they have performed procedures specified by the
Representatives with respect to the unaudited consolidated financial
statements of Grumman and its subsidiaries incorporated by reference
in the Registration Statement, including (A) reviewing of the minutes
of meetings of the stockholders of Grumman, the board of directors of
Grumman and any committees thereof as set forth in minute books at
March 31, 1994, (B) reading the unaudited consolidated financial
statements of Grumman and its subsidiaries incorporated by reference
in the Registration Statement and agreeing the amounts contained
therein with Grumman's accounting records as of March 31, 1994 and
for the three-month period then ended and (C) inquiring of certain
officials of Grumman who have responsibility for financial and
accounting matters whether the unaudited condensed consolidated
financial statements incorporated by reference in the Registration
Statement (x) are in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of
the audited consolidated financial statements of Grumman and its
subsidiaries incorporated by reference in the Registration Statement
and (y) comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published rules and regulations.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for the purposes of this subsection.
(l) The Representatives shall have received a letter, dated the
Closing Date, of Ernst & Young, which reconfirms the matters set forth in
their letter delivered pursuant to subsection (c) of this Section and which
states in effect that (i) they are independent public accountants within
the meaning of the Act and the applicable published Rules and Regulations
thereunder, (ii) they audited the Vought Financial Statements and (iii)
they have compared specified dollar amounts and other financial information
with respect Vought contained in the prospectus with the financial
information contained in the Vought Financial Statements and have found
such dollar amounts and other financial information to be in agreement with
such results.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as they reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
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material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein.
(b) Each Underwriter will, severally and not jointly, indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives, if any, specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. In any such action, any indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such action (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any action or related actions in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such indemnified parties and that all
such fees and expenses shall be
15
<PAGE>
reimbursed as they are incurred. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed the Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
7. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters default
in their obligations to purchase Securities under the Terms Agreement and the
number of shares of the Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
number of shares of the Securities, the Representatives may make arrangements
satisfactory to the Company for the purchase of such Securities by other
persons,
16
<PAGE>
including any of the Underwriters, but if no such arrangements are made by the
Closing Date, the nondefaulting Underwriters shall be obligated severally, in
proportion to their respective commitments under this Agreement and the Terms
Agreement, to purchase the Securities that such defaulting Underwriters agreed
but failed to purchase. If any Underwriter or Underwriters so default and the
number of shares of the Securities with respect to which such default or
defaults occur exceeds 10% of the total number of shares of the Securities and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Securities by other persons are not made within 36 hours after
such default, such Terms Agreement will terminate without liability on the part
of any nondefaulting Underwriter or the Company, except as provided in Section
8. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve
a defaulting Underwriter from liability for its default. The respective
commitments of the several Underwriters for the purposes of this Section shall
be determined without regard to reduction in the respective Underwriters'
obligations to purchase the numbers of shares of the Securities set forth
opposite their names in the Terms Agreement as a result of Delayed Delivery
Contracts entered into by the Company.
The foregoing obligations and agreements set forth in this Section will not
apply if the Terms Agreement specifies that such obligations and agreements will
not apply.
8. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person and will survive delivery of and
payment for the Securities. If the Terms Agreement is terminated pursuant to
Section 7 or if for any reason the purchase of the Securities by the
Underwriters under the Terms Agreement is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4 and the respective obligations of the Company and the Underwriters
pursuant to Section 6 shall remain in effect. If the purchase of the Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 7 or the occurrence of
any event specified in clause (iii), (iv) or (v) of Section 5(c), the Company
will reimburse the Underwriters for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Securities.
9. NOTICES. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their addresses furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at Northrop Grumman Corporation, 1840 Century
Park East, Los Angeles, California 90067, Attention: _______________.
10. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the Company and such Underwriters as are identified in Terms
Agreements and their respective successors and the officers and directors and
controlling persons referred to in Section 6, and no other person will have any
right or obligation hereunder.
17
<PAGE>
11. APPLICABLE LAW. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
NORTHROP GRUMMAN CORPORATION
By...........................................
Name:
Title:
CS First Boston Corporation
[INSERT NAMES(S) OF OTHER REPRESENTATIVES OR
UNDERWRITERS]
[On behalf of--themselves--itself--and as
Representative[s] of the Several] [As]
Underwriter[s]
[By CS First Boston Corporation]
By...........................................
Name:
Title:
18
<PAGE>
SCHEDULE A
GRUMMAN CORPORATION
<PAGE>
ANNEX I
(THREE COPIES OF THIS DELAYED DELIVERY CONTRACT SHOULD BE SIGNED AND RETURNED
TO THE ADDRESS SHOWN BELOW SO AS TO ARRIVE NOT LATER THAN 9:00 A.M.,
NEW YORK TIME, ON............. .........., 19.....*)
DELAYED DELIVERY CONTRACT
[INSERT DATE OF PUBLIC OFFERING]
Northrop Grumman Corporation
c/o CS First Boston Corporation
Park Avenue Plaza
New York, N.Y. 10055
Attention: [INSERT NAME OF CORPORATE FINANCE OFFICER]
Gentlemen:
The undersigned hereby agrees to purchase from Northrop Grumman
Corporation, a Delaware corporation ("Company"), and the Company agrees to sell
to the undersigned, [IF ONE DELAYED CLOSING, INSERT-as of the date hereof, for
delivery on ______, 199__ ("Delivery Date"),]
...................... shares
of the Company's [INSERT TITLE OF SECURITIES] ("Securities"), offered by the
Company's Prospectus dated _______, 199___ and a Prospectus Supplement dated
______, 199__ relating thereto, receipt of copies of which is hereby
acknowledged, at $_____ per share plus accrued dividends, if any, and on the
further terms and conditions set forth in this Delayed Delivery Contract
("Contract").
[IF TWO OR MORE DELAYED CLOSING, INSERT THE FOLLOWING:
The undersigned will purchase from the Company as of the date hereof, for
delivery on the dates set forth below, Securities in the--principal--amounts
set forth below:
NUMBER
DELIVERY DATE OF SHARES
------------- ---------
........................... .........
........................... .........
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to purchase
for delivery on--the--each--Delivery Date shall be made to the Company or its
order by certified or official bank check in New York Clearing House (next day)
funds at the offices of __________________ at ___ __. M. on--the--such--Delivery
Date upon delivery to the undersigned of the Securities to be purchased by the
undersigned--for delivery on such Delivery Date--in definitive form and in such
denominations and registered in such names as the undersigned may designate by
written or telegraphic communication addressed to the Company not less than five
full business days prior to--the--such--Delivery Date.
____________________
* INSERT DATE WHICH IS THIRD FULL BUSINESS DAY PRIOR TO CLOSING DATE UNDER THE
TERMS AGREEMENT.
A-1
<PAGE>
It is expressly agreed that the provisions for delayed delivery and
payment are for the sole convenience of the undersigned; that the purchase
hereunder of Securities is to be regarded in all respects as a purchase as of
the date of this Contract; that the obligation of the Company to make delivery
of and accept payment for, and the obligation of the undersigned to take
delivery of and make payment for, Securities on--the--each--Delivery Date shall
be subject only to the conditions that (1) investment in the Securities shall
not at--the--such--Delivery Date be prohibited under the laws of any
jurisdiction in the United States to which the undesigned is subject and (2) the
Company shall have sold to the Underwriters the total number of shares of the
Securities less the number of shares thereof covered by this and other similar
Contracts. The undersigned represents that its investment in the Securities is
not, as of the date hereof, prohibited under the laws of any jurisdiction to
which the undersigned is subject and which governs such investment.
Promptly after completion of the sale to the Underwriters the Company
will mail or deliver to the undersigned at the address set forth below notice to
such effect, accompanied by--a copy--copies--of the opinion[s] of counsel for
the Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the acceptance of any such Contract is in the
company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
........................................
(NAME OF PURCHASER)
BY .....................................
.....................................
(TITLE OF SIGNATORY)
.....................................
.....................................
(ADDRESS OF PURCHASER)
Accepted, as of the above date.
Northrop Grumman Corporation
By ...........................................
Name:
Title:
A-2
<PAGE>
EXHIBIT 1-3
NORTHROP GRUMMAN CORPORATION
DEBT SECURITIES
UNDERWRITING AGREEMENT
----------------------
1. INTRODUCTORY. Northrop Grumman Corporation, a Delaware corporation
("Company"), proposes to issue and sell from time to time certain of its debt
securities registered under the registration statement referred to in Section
2(a) ("Registered Securities"). The Registered Securities will be issued under
an indenture, dated as of __________, 199__ ("Indenture"), between the Company
and Chase Manhattan Bank, National Association, as Trustee, in one or more
series, which series may vary as to interest rates, maturities, redemption
provisions, selling prices and other terms, with all such terms for any
particular series of the Registered Securities being determined at the time of
sale. Particular series of the Registered Securities will be sold pursuant to a
Terms Agreement referred to in Section 3, for resale in accordance with terms of
offering determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Securities". The firm or firms which agree to purchase the
Securities are hereinafter referred to as the "Underwriters" of such Securities,
and the representative or representatives of the Underwriters, if any, specified
in a Terms Agreement referred to in Section 3 are hereinafter referred to as the
"Representatives"; provided, however, that if the Terms Agreement does not
specify any representative of the Underwriters, the term "Representatives", as
used in this Agreement (other than in Sections 2(b), 5(c) and 6 and the second
sentence of Section 3), shall mean the Underwriters.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 33-55143), including a prospectus,
relating to the Registered Securities has been filed with the Securities
and Exchange Commission ("Commission") and has become effective; no order
preventing or suspending the use of such Prospectus has been issued by the
Commission and no proceeding for that purpose has been threatened or
initiated by the Commission. Such registration statement, as amended at
the time of any Terms Agreement referred to in Section 3, is hereinafter
referred to as the "Registration Statement", and the prospectus included in
such Registration Statement, as supplemented as contemplated by Section 3
to reflect the terms of the Securities and the terms of offering thereof,
as first filed with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") under the Securities Act of 1933, as amended, (the
"Act"), including all material filed pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and incorporated by reference
therein, is hereinafter referred to as the "Prospectus."
(b) On the effective date of the registration statement relating to
the Registered Securities, such registration statement conformed in all
respects to the requirements of the Act, the Trust Indenture Act of 1939,
as amended, (the "Trust Indenture Act") and the rules and regulations of
the Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or
<PAGE>
necessary to make the statements therein not misleading, and on the date of
each Terms Agreement referred to in Section 3, the Registration Statement
and the Prospectus will conform in all respects to the requirements of the
Act, the Trust Indenture Act and the Rules and Regulations, and neither of
such documents will include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, except that the foregoing does
not apply to (i) statements in or omissions from any of such documents
based upon written information furnished to the Company by any Underwriter
through the Representatives, if any, specifically for use therein and (ii)
that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) of the Trustee under
the Trust Indenture Act.
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act and
the Exchange Act, as applicable, and the Rules and Regulations, and none of
such documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(d) Each of the Company and its significant subsidiaries listed on
Schedule A hereto (each, a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
organization and has the requisite corporate power and authority to carry
on its business as currently being conducted, to own, lease and operate its
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction where the
operation, ownership or leasing of property or the conduct of its business
requires such qualification, except where the failure to be so qualified
would not, singly or in the aggregate, have a material adverse effect on
the properties, business, results of operations, condition (financial or
otherwise), affairs or prospects of the Company and the Subsidiaries, taken
as a whole (a "Material Adverse Effect").
(e) All of the issued and outstanding shares of capital stock of, or
other ownership interest in, each Subsidiary have been duly and validly
authorized and issued and are fully paid and non-assessable and not subject
to any preemptive rights, and all of the shares of capital stock of, or
other ownership interests in, each Subsidiary are owned, directly or
through Subsidiaries, by the Company. Except as set forth in the
Prospectus, all such shares of capital stock are owned free and clear of
any security interest, mortgage, pledge, claim, lien or encumbrance (each,
a "Lien"). There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments or sale or Liens
related to or entitling any person to purchase or otherwise to acquire any
shares of the capital stock of, or other ownership interest in, any
Subsidiary.
(f) The Indenture has been duly authorized by the Company, and, when
duly executed and delivered in accordance with its terms, will be a valid
and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, by
2
<PAGE>
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) or by any implied covenant
of good faith and fair dealing, and will conform to the description thereof
in the Prospectus. The Securities have been duly authorized by the Company
and, on the Closing Date, will have been duly executed by the Company and
will conform to the description thereof in the Prospectus. When the
Securities are issued, authenticated and delivered in accordance with the
Indenture and paid for in accordance with the terms of this Agreement, the
Securities will constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture.
(g) Each of the firms of accountants that has certified or shall
certify the applicable consolidated financial statements and supporting
schedules of the Company and/or Grumman Corporation ("Grumman"), as the
case may be, filed or to be filed with the Commission as part of the
Registration Statement and the Prospectus or incorporated by reference
therein are independent public accountants with respect to the Company and
the Subsidiaries, as required by the Act. The consolidated historical and
PRO FORMA financial statements, together with related schedules and notes,
set forth in the Prospectus and the Registration Statement or incorporated
by reference therein comply as to form in all material respects with the
requirements of the Act. Such historical financial statements fairly
present the consolidated financial position of the Company, Grumman and
the Subsidiaries at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated, in
accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout such periods. Such PRO FORMA financial
statements have been prepared on the basis consistent with such historical
statements, except for the PRO FORMA adjustments specified therein, and
give effect to assumptions made on a reasonable basis and present fairly
the historical and proposed transactions contemplated by the Prospectus and
this Agreement. The other financial and statistical information and data
included in the Prospectus and in the Registration Statement, historical
and PRO FORMA, are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books
and records of the Company and Grumman.
3. PURCHASE AND OFFERING OF SECURITIES. The obligation of the
Underwriters to purchase the Securities will be evidenced by an exchange of
telegraphic or other written communications ("Terms Agreement") at the time the
Company determines to sell the Securities. The Terms Agreement will incorporate
by reference the provisions of this Agreement, except as otherwise provided
therein, and will specify the firm or firms which will be Underwriters, the
names of any Representatives, the principal amount to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters and the terms of
the Securities not already specified in the Indenture, including, but not
limited to, interest, maturity, any redemption provisions, any sinking fund
requirements, any conversion rights or provisions and whether any of the
Securities may be sold to institutional investors pursuant to Delayed Delivery
Contracts (as defined below). The Terms Agreement will also specify the time
and date of delivery and payment (such time and date, or such other time not
later than seven full business days thereafter as the Representatives and the
Company agree as the time for payment and delivery, being herein and in the
Terms Agreement referred to as the "Closing Date"), the place of delivery and
payment and any details of the terms of offering that should be reflected in the
prospectus supplement relating to the offering of the Securities. The
obligations of the Underwriters to purchase the Securities will be several and
not joint. It is
3
<PAGE>
understood that the Underwriters propose to offer the Securities for sale as set
forth in the Prospectus. The Securities delivered to the Underwriters on the
Closing Date will be in definitive, fully registered form, in such denominations
and registered in such names as the Underwriters may request.
If the Terms Agreement provides for sales of Securities pursuant to
delayed delivery contracts, the Company authorizes the Underwriters to solicit
offers to purchase Securities pursuant to delayed delivery contracts
substantially in the form of Annex I attached hereto ("Delayed Delivery
Contracts") with such changes therein as the Company may authorize or approve.
Delayed Delivery Contracts are to be with institutional investors, including
commercial and savings banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. On the Closing Date the
Company will pay, as compensation, to the Representatives for the accounts of
the Underwriters, the fee set forth in such Terms Agreement in respect of the
principal amount of Securities to be sold pursuant to Delayed Delivery Contracts
("Contract Securities"). The Underwriters will not have any responsibility in
respect of the validity or the performance of Delayed Delivery Contracts. If
the Company executes and delivers Delayed Delivery Contracts, the Contract
Securities will be deducted from the Securities to be purchased by the several
Underwriters and the aggregate principal amount of Securities to be purchased by
each Underwriter will be reduced pro rata in proportion to the principal amount
of Securities set forth opposite each Underwriter's name in such Terms
Agreement, except to the extent that the Representatives determine that such
reduction shall be otherwise than pro rata and so advise the Company. The
Company will advise the Representatives not later than the business day prior to
the Closing Date of the principal amount of Contract Securities.
4. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters that it will furnish to Latham & Watkins, counsel for the
Underwriters, one signed copy of the registration statement relating to the
Registered Securities, including all exhibits, in the form it became effective
and of all amendments thereto and that, in connection with each offering of
Securities:
(a) The Company will file the Prospectus with the Commission pursuant
to and in accordance with Rule 424(b)(2) or, if applicable and if consented
to by the Representatives, subparagraph (5), not later than the second
business day following the execution and delivery of the Terms Agreement.
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will
also advise the Representatives promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under
4
<PAGE>
which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Act, the Company promptly will
prepare and file with the Commission an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance. Neither the Representatives' consent to, nor the Underwriters'
delivery of, any such amendment or supplement shall constitute a waiver of
any of the conditions set forth in Section 5.
(d) As soon as practicable following the issuance and sale of any of
the Registered Securities, the Company will make generally available to its
security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will comply with the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related Prospectus, any
related preliminary prospectus supplement, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as are reasonably requested.
(f) The Company will arrange for the qualification of the Securities
for sale under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as
required for the distribution.
(g) During the period of 5 years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year a copy of its annual report to
stockholders for such year, and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission under
the Exchange Act or mailed to stockholders, and (ii) from time to time,
such other information concerning the Company as the Representatives may
reasonably request.
(h) The Company will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse the Underwriters
for any expenses (including fees and disbursements of counsel) incurred by
them in connection with qualification of the Registered Securities for sale
and determination of their eligibility for investment under the laws of
such jurisdictions as the Representatives may designate pursuant to Section
4(f) hereof and the printing of any memorandum relating thereto, for any
fees charged by investment rating agencies for the rating of the
Securities, for fees charged by the National Association of Securities
Dealers, Inc. and for expenses incurred in distributing the Prospectus, any
preliminary prospectuses and any preliminary prospectus supplements to the
Underwriters. It is understood, however, that, except as provided in this
Section, Section 6 and Section 8 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, transfer
taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
(i) For a period beginning at the time of execution of the Terms
Agreement and ending on the later of (x) the termination of the syndicate
of Underwriters in connection with the offering and sale of the Securities
or (y) the Closing Date, without the prior consent of the
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Representatives, the Company will not offer, sell, contract to sell or
otherwise dispose of United States dollar-denominated debt securities
issued or guaranteed by the Company and having a maturity of more than one
year from the date of issue.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the several Underwriters to purchase and pay for the Securities will be subject
to the accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Deloitte & Touche L.L.P. confirming that they are independent
public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating in effect that:
(i) in their opinion, the consolidated financial statements and
schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement on Auditing Standards
No. 71, "Interim Financial Information" on the unaudited condensed
consolidated financial statements incorporated by reference in the
Registration Statement;
(iii) on the basis of the procedures referred to in (ii)
above, and inquiries of officials of the Company who have
responsibility for financial and accounting matters, nothing came to
their attention that caused them to believe that: any modifications
should be made to the unaudited condensed consolidated financial
statements incorporated by reference in the Registration Statement for
them to be in conformity with generally accepted accounting
principles, and such unaudited condensed financial statements
incorporated by reference in the Registration Statement do not comply
in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(iv) on the basis of reading the unaudited pro forma condensed
consolidated statement of earnings for the year ended December 31,
1993 and the three months ended March 31, 1994, incorporated by
reference in the Registration Statement, and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters, (x) nothing came to their attention that caused
them to believe that such unaudited pro forma condensed consolidated
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of Rule 11-02 of
Regulation S-X and (y) they have proven the arithmetic accuracy of the
application of the pro forma adjustments to the
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<PAGE>
historical amounts in the unaudited pro forma condensed consolidated
financial statements; and
(v) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information,
including the ratio of earnings to fixed charges, contained in such
prospectus (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the
general accounting records of the Company and its Subsidiaries subject
to the internal controls of the Company's accounting system or are
derived directly from such records by analysis or computation) with
the results obtained from inquiries, a reading of such general
accounting records and other procedures specified in such letter and
have found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as otherwise
specified in such letter.
All financial statements and schedules included in material incorporated by
reference into such prospectus shall be deemed included in such prospectus
for purposes of this subsection.
(b) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Arthur Andersen confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating in effect that:
(i) in their opinion, the consolidated financial statements and
schedules of Grumman and its subsidiaries examined by them and
incorporated by reference in the Registration Statement relating to
the Registered Securities, as amended at the date of such letter,
comply in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations; and
(ii) they have performed procedures specified by the
Representatives with respect to the unaudited consolidated financial
statements of Grumman and its subsidiaries incorporated by reference
in the Registration Statement, including (a) reviewing of the minutes
of meetings of the stockholders of Grumman, the board of directors of
Grumman and any committees thereof as set forth in the minute books at
March 31, 1994, (b) reading the unaudited consolidated financial
statements of Grumman and its subsidiaries incorporated by reference
in the Registration Statement and agreeing the amounts contained
therein with Grumman's accounting records as of March 31, 1994 and for
the three-month period then ended and (c) inquiring of certain
officials of Grumman who have responsibility for financial and
accounting matters whether the unaudited condensed consolidated
financial statements incorporated by reference in the Registration
Statement (X) are in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of
the audited consolidated financial statements of Grumman and its
subsidiaries incorporated by reference in the Registration Statement
and (y) comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations.
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<PAGE>
All financial statements and schedules included in material incorporated by
reference into such prospectus shall be deemed included in such prospectus
for purposes of this subsection.
(c) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Ernst & Young confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating in effect that (i) they
audited the consolidated balance sheets of [Vought Aircraft Company] [VAC
Acquisition Corp.] ("Vought") and its subsidiaries as of December 31, 1993
and the related consolidated statements of income and retained earnings and
cash flows for the year then ended (the "Vought Financial Statements") and
(ii) they have compared specified dollar amounts and other financial
information with respect Vought contained in the Prospectus with the
financial information contained in the Vought Financial Statements and have
found such dollar amounts and other financial information to be in
agreement with such results.
(d) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(e) Subsequent to the execution of the Terms Agreement, there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or its Subsidiaries which, in the judgment of a majority in
interest of the Underwriters, including any Representatives, materially
impairs the investment quality of the Securities or the Registered
Securities; (ii) any downgrading in the rating of any debt securities or
preferred stock of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities or preferred stock
of the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters, including
any Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Securities.
(f) The Representatives shall have received an opinion, dated the
Closing Date, of Sheppard, Mullin, Richter & Hampton, counsel for the
Company, to the effect that:
8
<PAGE>
(i) Each of the Company and its Subsidiaries has been duly
incorporated and is an existing corporation in good standing under the
laws of the State of its jurisdiction of incorporation, with corporate
power and authority to own its properties and conduct its business as
described in the Prospectus; and, to the best of such counsel's
knowledge, each of the Company and its Subsidiaries is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which it owns or leases substantial properties or in
which the conduct of its business requires such qualification, except
where the failure to qualify would not have a Material Adverse Effect;
(ii) The Company has authorized capitalization as set forth in
the Prospectus;
(iii) The Indenture has been duly authorized, executed and
delivered by the Company and has been duly qualified under the Trust
Indenture Act; the Securities have been duly authorized; the
Securities other than any Contract Securities have been duly executed,
authenticated, issued and delivered; the Indenture and the Securities
other than any Contract Securities constitute, and any Contract
Securities, when executed, authenticated, issued and delivered in the
manner provided in the Indenture and sold pursuant to Delayed Delivery
Contracts, will constitute, valid and legally binding obligations of
the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) or by any implied covenant of good
faith and fair dealing; and the Securities other than any Contract
Securities conform, and any Contract Securities, when so issued and
delivered and sold, will conform, to the description thereof contained
in the Prospectus;
(iv) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Terms Agreement
(including the provisions of this Agreement) in connection with the
issuance or sale of the Securities by the Company, except such as have
been obtained and made under the Act and the Trust Indenture Act and
such as may be required under state securities laws;
(v) The execution, delivery and performance of the Indenture,
the Terms Agreement (including the provisions of this Agreement) and
any Delayed Delivery Contracts and the issuance and sale of the
Securities and compliance with the terms and provisions thereof will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any Federal, California or Delaware
statute or any rule, regulation or order of any governmental agency or
body or any court having jurisdiction over the Company or any of its
properties or any material agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of
the properties of the Company is subject, or the charter or by-laws of
the Company, and the Company has the power and authority to
9
<PAGE>
authorize, issue and sell the Securities as contemplated by the Terms
Agreement (including the provisions of this Agreement);
(vi) After due inquiry, such counsel does not know of any legal
or governmental proceeding pending or threatened to which the Company
or any of its Subsidiaries is a party or to which any of their
respective property is subject which is required to be described in
the Registration Statement or the Prospectus and is not so described;
(vii) The Registration Statement has become effective under
the Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein, and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated
under the Act, and the Registration Statement and the Prospectus
(other than the financial statements and notes thereto and supporting
schedules and other financial and statistical information contained
therein as to which such counsel need express no opinion) complied as
to form in all material respects with the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations; and
(viii) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
Such counsel shall also state that on the basis of their involvement
in the preparation of the Registration Statement and although they have not
verified the accuracy or completeness of the statements contained therein
or in any amendment thereto, nothing has come to the attention of such
counsel which causes them to believe that the Registration Statement or the
Prospectus (other than the financial statements and notes thereto and
supporting schedules and other financial and statistical information
contained therein) contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and such counsel
does not know of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described and filed as
required; it being understood that such counsel need express no opinion as
to the financial statements or other financial data contained in the
Registration Statement or the Prospectus.
In rendering such opinion, such counsel shall opine as to the effect
of the federal laws of the United States, the internal laws of the States
of California and New York and the General Corporation Laws of the State of
Delaware. As to matters involving application of the laws of the State of
New York, to the extent specified in such opinion, such counsel may rely on
the opinion of other counsel of good standing believed to be reliable and
who are satisfactory to counsel for the Underwriters.
10
<PAGE>
(g) The Representatives shall have received an opinion, dated the
Closing Date, of Richard R. Molleur, Corporate Vice President and General
Counsel of the Company, to the effect that:
(i) The execution, delivery and performance of the Indenture,
the Terms Agreement (including the provisions of this Agreement) and
any Delayed Delivery Contracts and the issuance and sale of the
Securities and compliance with the terms and provisions thereof will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any Federal, California or Delaware
statute or any rule, regulation or order of any governmental agency or
body or any court having jurisdiction over the Company or any of its
properties or any agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of its
properties is subject, or the charter or by-laws of the Company, and
the Company has the power and authority to authorize, issue and sell
the Securities as contemplated by the Terms Agreement (including the
provisions of this Agreement);
(ii) Such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company or any of its
Subsidiaries is a party or to which any of their respective properties
is subject which is required to be described in the Registration
Statement or the Prospectus and is not so described, or of any
contract or other document which is required to be described in the
Registration Statement or the Prospectus or is required to be filed as
an exhibit to the Registration Statement which is not described or
filed as required.
In rendering such opinion, such counsel shall opine as to the effect
of the federal laws of the United States, the internal laws of the State of
California and the General Corporation Laws of the State of Delaware.
(h) The Representatives shall have received from Latham & Watkins,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus and other related
matters as they may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(i) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Company in this Agreement
are true and correct, that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, that no stop order suspending the
effectiveness of the Registration Statement or of any part thereof has been
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission and that, subsequent to the date of the most
recent financial statements in the Prospectus, there has been no material
adverse change in the financial position or results of
11
<PAGE>
operation of the Company and its Subsidiaries except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(j) The Representatives shall have received a letter , dated the
Closing Date, of Deloitte & Touche L.L.P. , which reconfirms the matters
set forth in their letter delivered pursuant to subsection (a) of this
Section and which states in effect that:
(i) in their opinion, the consolidated financial statements and
schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement on Auditing Standards
No. 71, "Interim Financial Information" on the unaudited condensed
consolidated financial statements incorporated by reference in the
Registration Statement;
(iii) on the basis of the procedures referred to in (ii)
above, and inquiries of officials of the Company who have
responsibility for financial and accounting matters, nothing came to
their attention that caused them to believe that: any modifications
should be made to the unaudited condensed consolidated financial
statements incorporated by reference in the Registration Statement for
them to be in conformity with generally accepted accounting
principles, and such unaudited condensed financial statements
incorporated by reference in the Registration Statement do not comply
in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(iv) on the basis of reading the unaudited pro forma condensed
consolidated statement of earnings for the year ended December 31,
1993 and the three months ended March 31, 1994, incorporated by
reference in the Registration Statement, and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters, (x) nothing came to their attention that caused
them to believe that such unaudited pro forma condensed consolidated
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of Rule 11-02 of
Regulation S-X and (y) they have proven the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
the unaudited pro forma condensed combined financial statements;
(v) on the basis of the review referred to in (ii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
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<PAGE>
(A) the unaudited financial statements, if any, included in
the Prospectus and not covered by their letter delivered pursuant
to subsection (a) of this Section do not comply in form in all
material respects with the applicable accounting requirements of
the Act and the related published Rules and Regulations or are
not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the
audited financial statements included in the Prospectus;
(B) the unaudited capsule information, if any, included in
the Prospectus does not agree with the amounts set forth in the
unaudited consolidated financial statements from which it was
derived or was not determined on a basis substantially consistent
with that of the audited financial statements included in the
Prospectus;
(C) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than five days prior to the Closing Date, there was any change in
the capital stock or any increase in short-term indebtedness or
long-term debt of the Company and consolidated Subsidiaries or,
at the date of the latest available balance sheet read by such
accountants, there was any decrease in consolidated net current
assets or net assets, as compared with amounts shown on the
latest balance sheet included in the Prospectus; or
(D) for the period from the date of the latest income
statement included in the Prospectus to the closing date of the
latest available income statement read by such accountants there
were any decreases, as compared with the corresponding period of
the previous year and with the period of corresponding length
ended the date of the latest income statement included in the
Prospectus, in consolidated net sales, net operating income,
income before extraordinary items or net income or in the ratio
of earnings to fixed charges;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vi) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
included in the Prospectus and not covered by their letter delivered
pursuant to subsection (a) of this Section (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
Subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
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<PAGE>
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for the purposes of this subsection.
(k) The Representatives shall have received a letter, dated the
Closing Date, of Arthur Andersen, which reconfirms the matters set forth in
their letter delivered pursuant to subsection (b) of this Section and which
states in effect that:
(i) in their opinion, the consolidated financial statements and
schedules of Grumman and its subsidiaries examined by them and
incorporated by reference in the Registration Statement relating to
the Registered Securities, as amended at the date of such letter,
comply in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations; and
(ii) they have performed procedures specified by the
Representatives with respect to the unaudited consolidated financial
statements of Grumman and its subsidiaries incorporated by reference
in the Registration Statement, including (a) reviewing of the minutes
of meetings of the stockholders of Grumman, the board of directors of
Grumman and any committees thereof as set forth in the minute books at
March 31, 1994, (b) reading the unaudited consolidated financial
statements of Grumman and its subsidiaries incorporated by reference
in the Registration Statement and agreeing the amounts contained
therein with Grumman's accounting records as of March 31, 1994 and for
the three-month period then ended and (c) inquiring of certain
officials of Grumman who have responsibility for financial and
accounting matters whether the unaudited condensed consolidated
financial statements incorporated by reference in the Registration
Statement (x) are in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of
the audited consolidated financial statements of Grumman and its
subsidiaries incorporated by reference in the Registration Statement
and (y) comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for the purposes of this subsection.
(l) The Representatives shall have received a letter, dated the
Closing Date, of Ernst & Young, which reconfirms the matters set forth in
their letter delivered pursuant to subsection (c) of this Section and which
states in effect that (i) they are independent public accountants within
the meaning of the Act and the applicable published Rules and Regulations
thereunder, (ii) they audited the Vought Financial Statements and (iii)
they have compared specified dollar amounts and other financial information
with respect Vought contained in the prospectus with the financial
information contained in the Vought Financial Statements and have found
such dollar amounts and other financial information to be in agreement with
such results.
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The Company will furnish the Representatives with such conformed copies of
such opinions, certificates, letters and documents as they reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein.
(b) Each Underwriter will, severally and not jointly, indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives, if any, specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such
15
<PAGE>
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. In any such action, any
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
action (including any impleaded parties) include both the indemnifying party and
the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any action or related
actions in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
16
<PAGE>
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed the Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
7. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters default
in their obligations to purchase Securities under the Terms Agreement and the
aggregate principal amount of the Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
principal amount of the Securities, the Representatives may make arrangements
satisfactory to the Company for the purchase of such Securities by other
persons, including any of the Underwriters, but if no such arrangements are made
by the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments under this Agreement
and the Terms Agreement, to purchase the Securities that such defaulting
Underwriters agreed but failed to purchase. If any Underwriter or Underwriters
so default and the aggregate principal amount of the Securities with respect to
which such default or defaults occur exceeds 10% of the total principal amount
of the Securities and arrangements satisfactory to the Representatives and the
Company for the purchase of such Securities by other persons are not made within
36 hours after such default, such Terms Agreement will terminate without
liability on the part of any nondefaulting Underwriter or the Company, except as
provided in Section 8. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
The respective commitments of the several Underwriters for the purposes of this
Section shall be determined without regard to reduction in the respective
Underwriters' obligations to purchase the principal amounts of the Securities
set forth opposite their names in the Terms Agreement as a result of Delayed
Delivery Contracts entered into by the Company.
The foregoing obligations and agreements set forth in this Section will not
apply if the Terms Agreement specifies that such obligations and agreements will
not apply.
8. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person and will survive delivery of and
payment for the Securities. If the Terms Agreement is terminated pursuant to
Section 7 or if for any reason the purchase of the Securities by the
Underwriters under the Terms Agreement is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4 and the respective obligations of the Company and the Underwriters
pursuant to Section 6 shall remain in effect. If the purchase of the Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 7 or the occurrence of
any event specified in clause (iii), (iv) or (v) of Section 5(c), the Company
will reimburse the Underwriters for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Securities.
17
<PAGE>
9. NOTICES. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their addresses furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at Northrop Grumman Corporation, 1840 Century
Park East, Los Angeles, California 90067, Attention: _________________.
10. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the Company and such Underwriters as are identified in Terms
Agreements and their respective successors and the officers and directors and
controlling persons referred to in Section 6, and no other person will have any
right or obligation hereunder.
11. APPLICABLE LAW. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
NORTHROP GRUMMAN CORPORATION
By..................................
Name:
Title:
CS First Boston Corporation
[Insert names(s) of other Representatives or
Underwriters]
[On behalf of--themselves--itself--and as
Representative[s] of the Several] [As]
Underwriter[s]
[By CS First Boston Corporation]
By.........................................
Name:
Title:
18
<PAGE>
SCHEDULE A
Grumman Corporation
19
<PAGE>
ANNEX I
(THREE COPIES OF THIS DELAYED DELIVERY CONTRACT SHOULD BE SIGNED AND RETURNED
TO THE ADDRESS SHOWN BELOW SO AS TO ARRIVE NOT LATER THAN 9:00 A.M.,
NEW YORK TIME, ON............. .........., 19.....)
DELAYED DELIVERY CONTRACT
[INSERT DATE OF PUBLIC OFFERING]
Northrop Grumman Corporation
c/o CS First Boston Corporation
Park Avenue Plaza
New York, N.Y. 10055
Attention: [INSERT NAME OF CORPORATE FINANCE OFFICER]
Gentlemen:
The undersigned hereby agrees to purchase from Northrop Grumman
Corporation, a Delaware corporation ("Company"), and the Company agrees to sell
to the undersigned, [IF ONE DELAYED CLOSING, INSERT-as of the date hereof, for
delivery on ______, 199__ ("Delivery Date"),]
[$] ......................
- --principal amount--of the Company's [INSERT TITLE OF SECURITIES]
("Securities"), offered by the Company's Prospectus dated _______, 199___ and a
Prospectus Supplement dated ______, 199__ relating thereto, receipt of copies of
which is hereby acknowledged, at--__% of the principal amount thereof plus
accrued interest if any, and on the further terms and conditions set forth in
this Delayed Delivery Contract ("Contract").
[IF TWO OR MORE DELAYED CLOSING, INSERT THE FOLLOWING:
The undersigned will purchase from the Company as of the date hereof, for
delivery on the dates set forth below, Securities in the--principal--amounts set
forth below:
DELIVERY DATE PRINCIPAL AMOUNT
........................... ...................
........................... ...................
Each of such delivery dates is hereinafter referred to as a Delivery Date.
Payment for the Securities that the undersigned has agreed to purchase for
delivery on--the--each--Delivery Date shall be made to the Company or its order
by certified or official bank check in New York Clearing House (next day) funds
at the offices of __________________ at ___ __. M. on--the--such--Delivery Date
upon delivery to the undersigned of the Securities to be purchased by the
undersigned--for delivery on such Delivery Date--in definitive fully registered
form and in such denominations and registered in such names as the undersigned
may designate by written or telegraphic communication addressed to the Company
not less than five full business days prior to--the--such--Delivery Date.
- --------------------------------
* INSERT DATE WHICH IS THIRD FULL BUSINESS DAY PRIOR TO CLOSING DATE UNDER THE
TERMS AGREEMENT.
A-1
<PAGE>
It is expressly agreed that the provisions for delayed delivery and payment
are for the sole convenience of the undersigned; that the purchase hereunder of
Securities is to be regarded in all respects as a purchase as of the date of
this Contract; that the obligation of the Company to make delivery of and accept
payment for, and the obligation of the undersigned to take delivery of and make
payment for, Securities on each Delivery Date shall be subject only to the
conditions that (1) investment in the Securities shall not at such Delivery Date
be prohibited under the laws of any jurisdiction in the United States to which
the undesigned is subject and (2) the Company shall have sold to the
Underwriters the total principal amount of the Securities less the principal
amount thereof covered by this and other similar Contracts. The undersigned
represents that its investment in the Securities is not, as of the date hereof,
prohibited under the laws of any jurisdiction to which the undersigned is
subject and which governs such investment.
Promptly after completion of the sale to the Underwriters the Company will
mail or deliver to the undersigned at the address set forth below notice to such
effect, accompanied by copies of the opinion[s] of counsel for the Company
delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
It is understood that the acceptance of any such Contract is in the
company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
............................................
(NAME OF PURCHASER)
BY .........................................
.........................................
(TITLE OF SIGNATORY)
.........................................
.........................................
(ADDRESS OF PURCHASER)
A-2
<PAGE>
Accepted, as of the above date.
Northrop Grumman Corporation
By ...........................................
Name:
Title:
A-3
<PAGE>
Exhibit 4-4.1
AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF APRIL 18, 1994
AMENDMENT NO. 1 is dated as of May 11, 1994, between NORTHROP
CORPORATION, a corporation duly organized and validly existing under the laws of
the State of Delaware (the "Company") and each of the Banks party to the Credit
Agreement referred to below.
The Company, the Banks and the Administrative Agent are parties to a
Credit Agreement dated as of April 15, 1994, as amended and restated as of
April 18, 1994 (as heretofore modified and supplemented and in effect on the
date hereof, the "Credit Agreement"), providing, subject to the terms and
conditions thereof, for loans to be made by said Banks to the Company in an
aggregate principal amount not exceeding $2,800,000,000. The Company and the
Banks wish to amend the Credit Agreement in certain respects, and accordingly,
the parties hereto hereby agree as follows:
Section 1. DEFINITIONS. Except as otherwise defined in this
Amendment No. 1, terms defined in the Credit Agreement are used herein as
defined therein.
Section 2. AMENDMENTS. Subject to the satisfaction of the
conditions precedent specified in Section 4 below, but effective as of the date
of this Amendment No. 1, the Credit Agreement shall be amended as follows:
Section 2.01. References in the Credit Agreement to "this
Agreement" and "the Notes" shall be deemed to be references to the Credit
Agreement as amended hereby, and to the Notes (including the New Notes under and
as defined in Section 4.02 hereof), respectively.
Section 2.02. Section 1.01 of the Credit Agreement shall be
amended by amending the following definitions to read in their entirety as
follows:
"PRIME RATE" shall mean the arithmetic mean (rounded, if
necessary, to the nearest 1/16 of 1%), as determined by the
Administrative Agent, of the rate of interest from time to time announced
by each Reference Bank at its principal office as its prime commercial
lending rate.
"REVOLVING CREDIT COMMITMENT" shall mean, for each Revolving
Credit Bank, the obligation of such Bank to make Revolving Loans in an
aggregate principal amount at any one time outstanding up to but not
exceeding the amount set opposite the name of such Bank on Schedule I
hereto under the caption "Revolving Credit Commitment" (as the same may
be reduced from time to time pursuant to
-1-
<PAGE>
Section 2.04 hereof). The original aggregate principal amount of the
Revolving Credit Commitments is $800,000,000.
"TERM LOAN COMMITMENT" shall mean, for each Term Loan Bank, the
obligation of such Bank to make one or more Term Loans in an aggregate
amount up to but not exceeding the amount set opposite the name of such
Bank on Schedule I hereto under the caption "Term Loan Commitment" (as
the same may be reduced from time to time pursuant to Section 2.04
hereof). The original aggregate principal amount of the Term Loan
Commitments is $2,000,000,000.
"TERM LOAN COMMITMENT TERMINATION DATE" shall mean September 1,
1994.
Section 2.03. References in Section 3.01(c) of the Credit
Agreement to "$110,000,000" and "$220,000,000" are amended to read as
"$100,000,000" and "$2,000,000,000", respectively.
Section 2.04. Schedule I attached to the Credit Agreement is
deleted and Schedule I attached to this Amendment No. 1 is substituted therefor.
Section 3. REPRESENTATIONS AND WARRANTIES. The Company represents
and warrants to the Banks that the representations and warranties set forth in
Section 7 of the Credit Agreement are true in all material respects on the date
of this Amendment No. 1 as if made on and as of the date of this Amendment
No. 1.
Section 4. CONDITION PRECEDENT. As provided in Section 2 above,
the amendments to the Credit Agreement set forth in said Section 2 shall become
effective, as of the date of this Amendment No. 1, upon the satisfaction of the
following conditions precedent:
Section 4.01. EXECUTION BY ALL PARTIES. This Amendment No. 1
shall have been executed and delivered by the Company and each of the Banks.
Section 4.02. NOTES. The Company shall have delivered to the
Administrative Agent for each Bank, in exchange for the Term Note and Revolving
Note heretofore delivered to such Bank pursuant to Section 2.08(a) of the Credit
Agreement, a new Term Note and a new Revolving Note, each dated the date of the
Notes being exchanged, payable to such Bank in a principal amount equal to the
amount of the Term Loan Commitment and the Revolving Loan Commitment,
respectively, set forth opposite such Bank's name in Schedule I attached hereto
and otherwise duly completed, and each of such
-2-
<PAGE>
Term Notes and Revolving Notes delivered to the Banks shall constitute a "Note"
under the Credit Agreement as amended hereby.
Section 5. MISCELLANEOUS. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. This Amendment
No. 1 may be executed in any number of counterparts, all of which is taken
together shall constitute one and the same amendatory instrument and any of the
parties hereto may execute this Amendment No. 1 by signing any such counterpart.
This Amendment No. 1 shall be governed by, and construed in accordance with, the
law of the State of New York.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 1 to be duly executed and delivered as of the day and year first above
written.
NORTHROP CORPORATION
By /s/ James L. Sanford
-----------------------------------
Title: Assistant Secretary
THE BANKS
THE CHASE MANHATTAN BANK CHEMICAL BANK
(NATIONAL ASSOCIATION)
*By /s/ Patricia B. Brial By /s/ Thomas Delaney
-------------------------- --------------------------
Title: Managing Director Title: Vice President
BANK OF AMERICA NATIONAL BANK OF MONTREAL
TRUST AND SAVINGS
ASSOCIATION
By /s/ illegible By /s/ illegible
-------------------------- --------------------------
Title: Vice President Title: SVP
THE BANK OF NEW YORK THE BANK OF NOVA SCOTIA
*By /s/ Craig Rethmeyer By /s/ Marty Van Otterloo
-------------------------- --------------------------
Title: Vice President Title: Senior Relationship
Manager
By /s/ Jim York
--------------------------
Title: Officer
-4-
<PAGE>
BANKERS TRUST COMPANY CANADIAN IMPERIAL BANK OF
COMMERCE
By /s/ illegible By /s/ illegible
-------------------------- --------------------------
Title: V.P. Title:
CITICORP USA, INC. CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By /s/ Barbra A. Cohen By /s/ illegible
-------------------------- --------------------------
Title: Vice President Title: Authorized Signor
THE FIRST NATIONAL BANK OF FIRST INTERSTATE BANK OF
CHICAGO CALIFORNIA
By /s/ illegible By /s/ illegible
-------------------------- --------------------------
Title: Senior Vice President Title:
By /s/ illegible
--------------------------
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., LOS ANGELES
AGENCY NATIONSBANK OF TEXAS, N.A.
By /s/ Shuichi Takenaka By /s/ Tom Scharfenberg
-------------------------- --------------------------
Title: Joint General Manager Title: Vice President
NATIONAL WESTMINSTER BANK PLC ROYAL BANK OF CANADA
LOS ANGELES OVERSEAS BRANCH
By /s/ Gary Miller By /s/ Brian W. Dixon
-------------------------- --------------------------
Title: SVP Title: Senior Manager
-5-
<PAGE>
SOCIETE GENERALE CREDIT SUISSE
By /s/ Maureen Kelly By /s/ Stephen M. Flynn
-------------------------- --------------------------
Title: Vice President Title: Member of Senior
Management
By /s/ Marilou Palenzuela
--------------------------
Title: Member of Senior
Management
THE INDUSTRIAL BANK OF JAPAN, NBD BANK, N.A.
LIMITED, LOS ANGELES AGENCY
By /s/ illegible By /s/ Curtis Price
-------------------------- --------------------------
Title: Vice President Title: Vice President
THE SUMITOMO BANK, LIMITED MORGAN GUARANTY TRUST COMPANY
LOS ANGELES BRANCH OF NEW YORK
By /s/ Hiroshi Amano By /s/ illegible
-------------------------- --------------------------
Title: General Manager Title: Vice President
BANCO CENTRAL LLOYDS BANK PLC
HISPANOAMERICANO,
SAN FRANCISCO AGENCY
By /s/ Jose Castillo By /s/ Paul D. Briamonte
-------------------------- --------------------------
Title: S.V.P. & General Manager Title: S.V.P.
MELLON BANK, N.A. SHAWMUT BANK, N.A.
By /s/ illegible By /s/ John B. Desmond
-------------------------- --------------------------
Title: S.V.P. Title: Vice President
WACHOVIA BANK OF GEORGIA, J.P. MORGAN DELAWARE
N.A.
By /s/ illegible By /s/ David J. Morris
-------------------------- --------------------------
Title: Senior Vice President Title: Vice President
-6-
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
Term Loan Revolving Loan Total
Banks Commitment Commitments Commitments
- ---- ---------- ----------- -----------
<S> <C> <C> <C>
The Chase Manhattan Bank $96,428,571.47 $38,571,428.53 $ 135,000,000
(National Association)
Chemical Bank 96,428,571.46 38,571,428.54 135,000,000
Bank of America National 85,714,285.71 34,285,714.29 120,000,000
Trust and Savings Association
Bank of Montreal 85,714,285.71 34,285,714.29 120,000,000
The Bank of New York 85,714,285.71 34,285,714.29 120,000,000
The Bank of Nova Scotia 85,714,285.71 34,285,714.29 120,000,000
Bankers Trust Company 85,714,285.71 34,285,714.29 120,000,000
Canadian Imperial Bank of 85,714,285.71 34,285,714.29 120,000,000
Commerce
Citicorp USA, Inc. 85,714,285.71 34,285,714.29 120,000,000
Credit Lyonnais 85,714,285.71 34,285,714.29 120,000,000
Cayman Island Branch
First National Bank of Chicago 85,714,285.71 34,285,714.29 120,000,000
First Interstate Bank of 85,714,285.71 34,285,714.29 120,000,000
California
The Long-Term Credit Bank of 85,714,285.71 34,285,714.29 120,000,000
Japan, Ltd., Los Angeles
Agency
NationsBank of Texas, N.A. 85,714,285.71 34,285,714.29 120,000,000
National Westminster Bank Plc 85,714,285.71 34,285,714.29 120,000,000
Los Angeles Overseas Branch
Royal Bank of Canada 85,714,285.71 34,285,714.29 120,000,000
Societe Generale 85,714,285.71 34,285,714.29 120,000,000
Credit Suisse 64,285,714.29 25,714,285.71 90,000,000
The Industrial Bank of Japan, 64,285,714.29 25,714,285.71 90,000,000
Ltd., Los Angeles Agency
NBD Bank, N.A. 64,285,714.29 25,714,285.71 90,000,000
The Sumitomo Bank, Limited, 64,285,714.29 25,714,285.71 90,000,000
Los Angeles Bank
Morgan Guaranty Trust 57,142,857.14 22,857,142.86 80,000,000
Company of New York
Banco Central 35,714,285.71 14,285,714.29 50,000,000
Hispanoamericano,
San Francisco Agency
Lloyds Bank Plc 35,714,285.71 14,285,714.29 50,000,000
Mellon Bank, N.A. 35,714,285.71 14,285,714.29 50,000,000
Shawmut Bank, N.A. 35,714,285.71 14,285,714.29 50,000,000
Wachovia Bank of 35,714,285.71 14,285,714.29 50,000,000
Georgia, N.A.
J.P. Morgan Delaware 28,571,428.57 11,428,571.43 40,000,000
------------- ------------- ----------
TOTAL $2,000,000,000 $ 800,000,000 $2,800,000,000
-------------- -------------- --------------
</TABLE>
SCHEDULE I
<PAGE>
EXHIBIT 4-5
NORTHROP GRUMMAN CORPORATION
TO
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), TRUSTEE
_______________
INDENTURE
Dated as of _____________, 199__
_______________
SENIOR DEBT SECURITIES
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION............................. 1
Section 101. Definitions...................................... 1
Section 102. Compliance Certificates and Opinions............. 9
Section 103. Form of Documents Delivered to Trustee........... 10
Section 104. Acts of Holders; Record Dates.................... 11
Section 105. Notices, Etc., to Trustee and Company............ 13
Section 106. Notice to Holders; Waiver........................ 14
Section 107. Conflict with Trust Indenture Act................ 14
Section 108. Effect of Headings and Table of Contents......... 14
Section 109. Successors and Assigns........................... 15
Section 110. Separability Clause.............................. 15
Section 111. Benefits of Indenture............................ 15
Section 112. Governing Law.................................... 15
Section 113. Legal Holidays................................... 15
ARTICLE TWO SECURITY FORMS............................................... 16
Section 201. Forms Generally.................................. 16
Section 202. Form of Face of Security......................... 16
Section 203. Form of Reverse of Security...................... 19
Section 204. Form of Legend for Global Securities............. 24
Section 205. Form of Trustee's Certificate of Authentication.. 24
ARTICLE THREE THE SECURITIES............................................. 24
Section 301. Amount Unlimited; Issuable in Series............. 24
Section 302. Denominations.................................... 28
Section 303. Execution, Authentication, Delivery and Dating... 28
Section 304. Temporary Securities............................. 30
Section 305. Registration, Registration of Transfer
and Exchange..................................... 30
Section 306. Mutilated, Destroyed, Lost or Stolen Securities.. 33
Section 307. Payment of Interest; Interest Rights Preserved... 34
Section 308. Persons Deemed Owners............................ 35
Section 309. Cancellation..................................... 36
Section 310. Computation of Interest.......................... 36
-i-
<PAGE>
ARTICLE FOUR SATISFACTION AND DISCHARGE.................................. 36
Section 401. Satisfaction and Discharge of Indenture.......... 36
Section 402. Application of Trust Money....................... 37
ARTICLE FIVE REMEDIES.................................................... 38
Section 501. Events of Default................................ 38
Section 502. Acceleration of Maturity; Rescission
and Annulment.................................... 39
Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee....................... 41
Section 504. Trustee May File Proofs of Claim................. 41
Section 505. Trustee May Enforce Claims Without
Possession of Securities......................... 42
Section 506. Application of Money Collected................... 42
Section 507. Limitation on Suits.............................. 43
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and
Interest and to Convert.......................... 43
Section 509. Restoration of Rights and Remedies............... 44
Section 510. Rights and Remedies Cumulative................... 44
Section 511. Delay or Omission Not Waiver..................... 44
Section 512. Control by Holders............................... 45
Section 513. Waiver of Past Defaults.......................... 45
Section 514. Undertaking for Costs............................ 45
Section 515. Waiver of Usury, Stay or Extension Laws.......... 46
ARTICLE SIX THE TRUSTEE.................................................. 46
Section 601. Certain Duties and Responsibilities.............. 46
Section 602. Notice of Defaults............................... 47
Section 603. Certain Rights of Trustee........................ 48
Section 604. Not Responsible for Recitals or
Issuance of Securities........................... 49
Section 605. May Hold Securities.............................. 49
Section 606. Money Held in Trust.............................. 50
Section 607. Compensation and Reimbursement................... 50
Section 608. Conflicting Interests............................ 51
Section 609. Corporate Trustee Required; Eligibility.......... 51
Section 610. Resignation and Removal; Appointment
of Successor..................................... 51
Section 611. Acceptance of Appointment by Successor........... 53
Section 612. Merger, Conversion, Consolidation or
Succession to Business........................... 54
Section 613. Preferential Collection of Claims
Against Company.................................. 55
Section 614. Appointment of Authenticating Agent.............. 55
-ii-
<PAGE>
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND COMPANY...................................... 57
Section 701. Company to Furnish Trustee Names and
Addresses of Holders............................. 57
Section 702. Preservation of Information;
Communications to Holders........................ 57
Section 703. Reports by Trustee............................... 58
Section 704. Reports by Company............................... 58
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE................................ 59
Section 801. Company May Consolidate, Etc., Only on
Certain Terms.................................... 59
Section 802. Successor Substituted............................ 60
ARTICLE NINE SUPPLEMENTAL INDENTURES.......................... 60
Section 901. Supplemental Indentures Without
Consent of Holders............................... 60
Section 902. Supplemental Indentures with Consent of Holders.. 61
Section 903. Execution of Supplemental Indentures............. 63
Section 904. Effect of Supplemental Indentures................ 63
Section 905. Conformity with Trust Indenture Act.............. 63
Section 906. Reference in Securities to Supplemental
Indentures....................................... 63
ARTICLE TEN COVENANTS........................................ 64
Section 1001. Payment of Principal, Premium and Interest....... 64
Section 1002. Maintenance of Office or Agency.................. 64
Section 1003. Money for Securities Payments to Be Held
in Trust......................................... 64
Section 1004. Statement by Officers as to Default.............. 66
Section 1005. Existence........................................ 66
Section 1006. Maintenance of Properties........................ 67
Section 1007. Payment of Taxes and Other Claims................ 67
Section 1008. Waiver of Certain Covenants...................... 67
Section 1009. Limitation on Liens.............................. 68
Section 1010. Limitation on Sale and Lease-Back................ 69
Section 1011. Limitations on Funded Debt of Restricted
Subsidiaries..................................... 70
ARTICLE ELEVEN REDEMPTION OF SECURITIES......................... 71
Section 1101. Applicability of Article......................... 71
Section 1102. Election to Redeem; Notice to Trustee............ 71
Section 1103. Selection by Trustee of Securities to
Be Redeemed...................................... 71
-iii-
<PAGE>
Section 1104. Notice of Redemption............................. 72
Section 1105. Deposit of Redemption Price...................... 73
Section 1106. Securities Payable on Redemption Date............ 73
Section 1107. Securities Redeemed in Part...................... 74
ARTICLE TWELVE SINKING FUNDS.................................... 74
Section 1201. Applicability of Article......................... 74
Section 1202. Satisfaction of Sinking Fund Payments
with Securities.................................. 74
Section 1203. Redemption of Securities for Sinking Fund........ 75
ARTICLE THIRTEEN DEFEASANCE AND COVENANT DEFEASANCE............... 75
Section 1301. Applicability of Article; Company's
Option to Effect Defeasance or
Covenant Defeasance.............................. 75
Section 1302. Defeasance and Discharge......................... 75
Section 1303. Covenant Defeasance.............................. 76
Section 1304. Conditions to Defeasance or Covenant
Defeasance....................................... 77
Section 1305. Deposited Money and U.S. Government
Obligations to Be Held in Trust;
Miscellaneous Provisions......................... 80
Section 1306. Reinstatement.................................... 80
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE
A PART OF THE INDENTURE.
-iv-
<PAGE>
INDENTURE dated as of _______________, 199__ between NORTHROP
GRUMMAN CORPORATION, a corporation duly organized and existing under the laws of
the State of Delaware (herein called the "Company"), having its principal office
at 1840 Century Park East, Los Angeles, California, and THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), a national banking association duly organized and
existing under the laws of the United States of America, as Trustee (herein
called the "Trustee"), having its Corporate Trust Office at 4 Chase MetroTech
Center, Brooklyn, New York 11245.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as this Indenture provides.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the promises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance
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with generally accepted accounting principles, and, except as otherwise
herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted
at the date hereof;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Indenture; and
(5) the words "herein," "hereof," and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Attributable Debt" has the meaning specified in Section 1010.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means (i) a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on
the date of such certification, or (ii) a certificate signed by the
authorized officer or officers of the Company to whom the Board of
Directors of the Company has delegated its authority, and in each case,
delivered to the Trustee.
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"Business Day," when used with respect to any Place of Payment,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in that Place of Payment are authorized
or obligated by law or executive order to close.
"Commission" means the Securities and Exchange Commission, from time
to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Consolidated Net Tangible Assets" means, as of any particular time,
the aggregate amount of assets (less applicable reserves and properly
deductible items) after deducting therefrom (a) all current liabilities
except for (i) notes and loans payable, (ii) current maturities of
long-term debt, (iii) current maturities of obligations under capital
leases, and (iv) deferred income taxes and (b) all goodwill, tradenames,
trademarks, patents, unamortized debt discount and expenses (to the extent
included in said aggregate amount of assets) and other like intangibles,
all as set forth on the most recent quarterly or annual consolidated
balance sheet of the Company and its consolidated Subsidiaries and
computed in accordance with generally accepted accounting principles.
"Corporate Trust Office" means the principal office of the Trustee
or agent of the Trustee, in either case, in the City of New York, at which
at any particular time the corporate trust business of the Trustee shall
be administered.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
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"Covenant Defeasance" has the meaning specified in Section 1303.
"Debt," for purposes of Sections 1009 and 1010, shall have the
meaning ascribed that term in Section 1009.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series
issuable in whole or in part in the form of one or more Global Securities,
a clearing agency registered under the Exchange Act that is designated to
act as Depositary for such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 104.
"Foreign Government Obligation" has the meaning specified in Section
1304.
"Funded Debt" means any Debt or guaranty thereof, whether or not
secured, maturing by its terms more than one year from the date of its
creation, including any Debt or guaranty thereof renewable or extendable
at the option of the obligor to a date more than one year from the date of
original issuance thereof, but excluding any portion of such Debt or
guarantee which is included in current liabilities.
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or
such legend as may be specified as contemplated by Section 301 for such
Securities).
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Indenture" means this instrument as originally executed and as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto
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entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and
govern this instrument and any such supplemental indenture, respectively.
The term "Indenture" shall also include the terms of particular series of
Securities established as contemplated by Section 301.
"interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date," when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940
and any statute successor thereto, in each case as amended from time to
time.
"Maturity," when used with respect to any Security, means the date
on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Mortgage" has the meaning ascribed that term in Section 1009.
"Notice of Default" means a written notice of the kind specified in
Section 501(4).
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
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"Outstanding," when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities; provided that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made;
(3) Securities as to which Defeasance has been effected pursuant
to Section 1302; and
(4) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given, made
or taken any request, demand, authorization, direction, notice, consent,
waiver or other action hereunder as of any date, (A) the principal amount
of an Original Issue Discount Security which shall be deemed to be
Outstanding shall be the amount of the principal thereof which would be
due and payable as of such date upon acceleration of the Maturity thereof
to such date pursuant to Section 502, (B) if, as of such date, the
principal amount payable at the Stated Maturity of a Security is not
determinable, the principal amount of such Security which shall be deemed
to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security
denominated in one or more foreign currencies or currency units which
shall be deemed to be Outstanding shall be the U.S. dollar equivalent,
determined as of such date in the manner provided as contemplated by
Section 301, of the principal amount of such Security (or, in the case of
a Security described in Clause (A) or (B)
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above, of the amount determined as provided in such Clause), and (D)
Securities owned by the Company or any other obligor upon the Securities
of any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent, waiver or other action,
only Securities which a responsible officer of the Trustee actually knows
to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed,
lost or stolen Security.
"Principal Property" means any manufacturing plant or manufacturing
facility which is (i) owned by the Company or any Restricted Subsidiary
and (ii) located within the continental United States of America, except
any such plant which, in the opinion of the Board of Directors, is not of
material importance to the total business conducted by the Company and the
Restricted Subsidiaries taken as a whole.
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"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for
that purpose as contemplated by Section 301.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Office of the Trustee including any
vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer
or assistant trust officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of
his knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary of the Company except
any Subsidiary substantially all of the assets of which are located, or
substantially all of the business of which is carried on, outside of the
United States of America, or any Subsidiary substantially all of the
assets of which consist of stock or other securities of such a Subsidiary.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or
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interest thereon, means the date specified in such Security as the fixed
date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or
by one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such
voting power by reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" means, to the extent required by
any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is then a
Trustee hereunder, and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean
the Trustee with respect to Securities of that series.
"U.S. Government Obligation" has the meaning specified in Section
1304.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number
or a word or words added before or after the title "Vice President."
Section 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the
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Trust Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon an opinion of counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the opinion with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or representations with respect to such matters are
erroneous.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. ACTS OF HOLDERS; RECORD DATES.
Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given, made
or taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security
Register.
Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
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The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which
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a record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the Company's expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Company in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the
party hereto which sets such record dates may designate any date as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities of the relevant series in the manner
set forth in Section 106, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto which sets such record date shall be deemed to
have initially designated the 180th day after such record date as the Expiration
Date with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to give
or take any action hereunder with regard to any particular Security may do so
with regard to all or any part of the principal amount of such Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.
Section 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at 4 MetroTech Center, Brooklyn, New
York 11245, Attn: Corporate Trust Department,
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(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the
Company addressed to it at the address of its principal office specified
in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
Section 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at his address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
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Section 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
Section 112. GOVERNING LAW.
This Indenture and the Securities shall be governed by and construed
in accordance with the law of the State of New York, without regard to
principles of conflicts of laws.
Section 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of any Security that specifically states that
such provision shall apply in lieu of this Section)) payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, provided, that no interest shall
accrue with respect to such payment for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
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ARTICLE TWO
SECURITY FORMS
Section 201. FORMS GENERALLY.
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution thereof. If
the form of Securities of any series is established by action taken pursuant to
a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. FORM OF FACE OF SECURITY.
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
NORTHROP GRUMMAN CORPORATION
_______________________________________________________________
No. ____________ $ _____________
CUSIP _____________
Northrop Grumman Corporation, a corporation duly organized and
existing under the laws of Delaware (herein called the "Company," which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _______________________, or registered
assigns, the principal sum of ______________________ [Dollars] [if other than
Dollars, substitute other currency or currency units] on
____________________________________________ [If the Security is to bear
interest prior to Maturity,
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Interest __, and to pay interest thereon from _______________________________
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, [semi-annually on ______________________________ and
_____________________ in each year] [if other than semi-annual interest at a
fixed rate, insert frequency of payments and payment dates], commencing
___________________ at [If the Security is to bear interest at a fixed rate,
insert -- the rate of ____% per annum] [if the Security is to bear interest at a
rate determined with reference to one or more formula, refer to description of
index below], until the principal hereof is paid or made available for payment
[If applicable, insert --, provided that any principal and premium, and any such
installment of interest, which is overdue shall bear interest at the rate of
____% per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid or
made available for payment, and such interest shall be payable on demand.]
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the _________________ or ___________________ (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the Payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture].
[If the Securities are securities with respect to which the
principal of or any premium or interest may be determined with reference to one
or more indices or formulas, insert the text of such indices or formulas]
[If the Security is not to bear interest prior to Maturity, insert
- -- The principal of this Security shall not bear interest except in the case of
a default in payment of principal upon acceleration, upon redemption or at
Stated Maturity and in such case the overdue principal and any overdue premium
shall bear interest at the rate of _____% per annum (to the extent that the
payment of such interest shall be legally
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enforceable), from the dates such amounts are due until they are paid or made
available for payment. Interest on any overdue principal or premium shall be
payable on demand. [Any such interest on overdue principal or premium which is
not paid on demand shall bear interest at the rate of _______________% per annum
(to the extent that the payment of such interest on interest shall be legally
enforceable), from the date of such demand until the amount so demanded is paid
or made available for payment. Interest on any overdue interest shall be
payable on demand.]]
Payment of the principal of (and premium, if any) and [if
applicable, interest -- any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in ________________
in such coin or currency [of the United States of America] [if the Security is
denominated in a currency other than U.S. dollars, specify other currency or
currency unit in which payment of the principal of any premium or interest may
be made] as at the time of payment is legal tender for payment of public and
private debts [if applicable, insert --; provided, however, that at the option
of the Company payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register or by wire transfer to an account maintained by the person entitled
thereto as specified in the Security Register.]
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any
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benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated: ________________
NORTHROP GRUMMAN CORPORATION
By ___________________________________
Attest:
______________________
Section 203. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of ________________, 199__ (herein called
the "Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank (National
Association), as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the securities are, and are to be
authenticated and delivered. This Security is one of the series designated on
the face hereof [if applicable, insert -- limited in aggregate principal amount
to $________________]. [The Securities are [unsecured general obligations of
the Company.]]
[If applicable, insert -- the securities of this series are subject
to redemption upon not less than 30 days' notice by mail, [If applicable, insert
- -- (1) on _______________ in any year commencing with the year _____________ and
ending with the year ______________ through operation of the sinking fund for
this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [if applicable, insert -- on or after ______________, 19___],
as a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of
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the principal amount): If redeemed [if applicable, insert -- on or before
__________________, _____% and if redeemed] during the 12-month period beginning
________________ of the years indicated,
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
- ---- ---------- ---- ----------
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to _____% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert -- The Securities of this series are subject
to redemption upon not less than 30 days' notice by mail, (1) on ______________
in any year commencing with the year ______ and ending with the year ______
through operation of the sinking fund for this series at the Redemption Prices
for redemption through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert -- on or after ________________, as a whole or in part, at
the election of the Company, at the Redemption Prices for redemption otherwise
than through operation of the sinking fund (expressed as percentages of the
principal amount) set forth in the table below: If redeemed during the 12-month
period beginning _____________________ of the years indicated,
<TABLE>
<CAPTION>
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ----------------- ----------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to __________% of the principal
amount, together in the case of any such redemption (whether through operation
of the sinking fund or otherwise) with accrued interest to the Redemption Date,
but
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interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the Company
may not, prior to ________________ redeem any Securities of this series as
contemplated by [if applicable, insert -- Clause (2) of the preceding paragraph
as a part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than _________% per annum.]
[If applicable, insert -- The sinking fund for this series provides
for the redemption on __________________ in each year beginning with the year
___________ and ending with the year ________ of [if applicable, insert -- not
less than $_______________ ("mandatory sinking fund") and not more than]
$_______________ aggregate principal amount of Securities of this series.
Securities of this series acquired or redeemed by the Company otherwise than
through [if applicable, insert -- mandatory] sinking fund payments may be
credited against subsequent [if applicable, insert -- mandatory] [sinking fund
payments otherwise required to be made [if applicable, insert --, in the inverse
order in which they become due].]
[If the Security is subject to redemption of any kind, insert -- In
the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert -- The Indenture contains provisions for
defeasance at any time of [the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth in
the Indenture.]
[If the Security is convertible into securities of the Company,
specify the conversion features.]
[If the Security is not an Original Issue Discount Security, insert
- -- If an Event of Default with respect to Securities of this series shall occur
and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]
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[If the Security is an Original Issue Discount Security, insert --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- [insert formula for determining the
amount.] Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal, premium and interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The
foregoing
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shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
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Section 204. FORM OF LEGEND FOR GLOBAL SECURITIES.
Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
Section 205. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), As Trustee
By _____________________________________
Authorized Officer
ARTICLE THREE
THE SECURITIES
Section 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series:
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(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906 or 1107
and except for any Securities which, pursuant to Section 303, are deemed
never to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series
shall be payable, if other than the Person in whose name that Security (or
one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest;
(4) the date or dates on which the principal of any Securities of
the series is payable;
(5) the rate or rates at which any Securities of the series shall
bear interest, if any, the date or dates from which any such interest
shall accrue, the Interest Payment Dates on which any such interest shall
be payable and the Regular Record Date for any such interest payable on
any Interest Payment Date;
(6) the place or places where the principal of and any premium and
interest on any Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which any Securities of the series
may be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
any Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof and the period or
periods within which, the price or prices at which and the terms and
conditions upon which any Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(9) any provision for the conversion or exchange of Securities of
the series, either at the option of the Holder thereof or the Company,
into or for another security or securities of the Company, the security or
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securities into or for which, the period or periods within which, the
price or prices, including any adjustments thereto, at which and the other
terms and conditions upon which any Securities of the series shall be
converted or exchanged, in whole or in part, pursuant to such obligation;
(10) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which any Securities of the series
shall be issuable;
(11) if the amount of principal of or any premium or interest on
any Securities of the series may be determined with reference to one or
more indices or pursuant to a formula, the manner in which such amounts
shall be determined;
(12) if other than the currency of the United States of America,
the currency, currencies or currency units in which the principal of or
any premium or interest on any Securities of the series shall be payable
and the manner of determining the equivalent thereof in the currency of
the United States of America for any purpose, including for purposes of
the definition of "Outstanding" in Section 101;
(13) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the Company
or the Holder thereof, in one or more currencies or currency units other
than that or those in which such Securities are stated to be payable, the
currency, currencies or currency units in which the principal of or any
premium or interest on such Securities as to which such election is made
shall be payable, the periods within which and the terms and conditions
upon which such election is to be made and the amount so payable (or the
manner in which such amount shall be determined);
(14) if other than the entire principal amount thereof, the portion
of the principal amount of any Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof pursuant
to Section 502;
(15) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which shall be deemed to be
the principal amount of such Securities as of any such date for any
purpose thereunder or hereunder, including the principal amount thereof
which shall be due and
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payable upon any Maturity other than the Stated Maturity or which shall be
deemed to be Outstanding as of any date prior to the Stated Maturity (or,
in any such case, the manner in which such amount deemed to be the
principal amount shall be determined);
(16) whether either or both of Section 1302 and Section 1303 shall
not apply to the Securities of the series;
(17) if and as applicable, that any Securities of the series shall
be issuable in whole or in part in the form of one or more Global
Securities and, in such case, the respective Depositaries for such Global
Securities, the form of any legend or legends which shall be borne by any
such Global Security in addition to or in lieu of that set forth in
Section 204 and any circumstances in addition to or in lieu of those set
forth in Clause (2) of the last paragraph of Section 305 in which any such
Global Security may be exchanged in whole or in part for Securities
registered, and any transfer of such Global Security in whole or in part
may be registered, in the name or names of Persons other than the
Depositary for such Global Security or a nominee thereof;
(18) any addition to or change in the Events of Default which
applies to any Securities of the series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the
principal amount thereof due and payable pursuant to Section 502;
(19) any addition to or change in the covenants set forth in
Article Ten which applies to Securities of the series;
(20) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided in the Officers' Certificate
referred to above or in any such indenture supplemental hereto. All Securities
of any one series need not be issued at one time and, unless otherwise provided,
a series may be reopened for issuances of additional Securities of such series.
Unless otherwise provided with respect to the Securities of any
series, at the option of the Company,
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interest on the Securities of any series that bears interest may be paid by
mailing a check to the address of the person entitled thereto as such address
shall appear in the Security Register.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 302. DENOMINATIONS.
The Securities of each series shall be issuable only in registered
form without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.
Section 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been
established by or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
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(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles [and, if applicable, to provisions of law which may require
that a judgment for money damages rendered by a court in the United States
be expressed in United States dollars].
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein,
executed by the
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Trustee by manual signature, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 309, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
Section 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
Section 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company
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shall provide for the registration of Securities and of transfers of Securities.
The Trustee is hereby appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of a
series at the office or agency of the Company in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, of any authorized
denominations and of like tenor and aggregate principal amount, upon surrender
of the Securities to be exchanged at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
If the Securities of any series (or of any series and specified
tenor) are to be redeemed in part, the Company shall not be required (A) to
issue, register the transfer of or exchange any Securities of that series (or of
that series and specified tenor, as the case may be) during a period beginning
at the opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities
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selected for redemption under Section 1103 and ending at the close of business
on the day of such mailing, or (B) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3), (4) and (5) below shall
apply only to Global Securities:
(1) Each Global Security authenticated under this Indenture shall
be registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities
registered, and no transfer of a Global Security in whole or in part may
be registered, in the name of any Person other than the Depositary for
such Global Security or a nominee thereof unless (A) such Depositary (i)
has notified the Company that it is unwilling or unable to continue as
Depositary for such Global Security or (ii) has ceased to be a clearing
agency registered under the Exchange Act, (B) there shall have occurred
and be continuing an Event of Default with respect to such Global Security
or (C) there shall exist such circumstances, if any, in addition to or in
lieu of the foregoing as have been specified for this purpose as
contemplated by Section 301.
(3) Subject to the provisions of Clause (2) above, the rights of
holders of such Global Securities shall be exercised only through the
Depositary and shall be limited to those established by law and agreements
between such holders and the Depositary and or the Depositary
participants. The initial Depositary will make book-entry transfers among
the Depositary participants and receive and transmit distributions of
principal and interest on the Global Securities to such Depositary
participants.
The Depositary may be treated by the Company and the Trustee, and
any of their respective agents, employees, officers and directors, as the
absolute owner of the Global Securities for all purposes whatsoever.
Notwithstanding the foregoing, nothing in this Indenture shall prevent the
Company and the Trustee, or any of their respective agents, from giving
effect to any written certification, proxy or other authorization
furnished by
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the Depositary, or shall impair the operation of customary practices
governing the exercise of the rights of a holder of any Global Security.
Subject to the foregoing provisions of this Section, any holder may grant
proxies and otherwise authorize any person to take any action which a
holder is entitled to take under this Indenture or the Global Securities.
(4) Subject to Clause (2) above, any exchange of a Global Security
for other Securities may be made in whole or in part, and all Securities
issued in exchange for a Global Security or any portion thereof shall be
registered in such names as the Depositary for such Global Security shall
direct.
(5) Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 304, 306, 906
or 1107 or otherwise, shall be authenticated and delivered in the form of,
and shall be, a Global Security, unless such Security is registered in the
name of a Person other than the Depositary for such Global Security or a
nominee thereof.
Section 306. MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum
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sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose name the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Security of such series and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed
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payment, such money when deposited to be held in trust for the benefit of
the Persons entitled to such Defaulted Interest as in this Clause
provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of any notice of
the proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Securities of such series, not less
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
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Section 309. CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
Section 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such trust,
as provided in Section 1003) have been delivered to the Trustee for
cancellation; or
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(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense,
of the Company,
and the Company, in the case of (i) (ii) or (iii) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust for the purpose money
(either in United States dollars or such other currency or currency units in
which the securities of any series may be payable) in an amount sufficient to
pay and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal and any premium and
interest to the date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 607, the obligations
of the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
Section 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any
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Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and any
premium and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
REMEDIES
Section 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to Securities
of any series, means any of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of
that series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of or any premium on
any Security of that series when due, whether at its Maturity, upon
acceleration or otherwise; or
(3) default in the deposit of any sinking fund payment, when and
as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant,
agreement or warranty of the Company for the benefit of the Holders of the
Security in this Indenture (other than a covenant, agreement or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of series of Securities other than that
series), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 10% in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of
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the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(6) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any
substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action; or
(7) any other Event of Default provided with respect to Securities
of that series.
Section 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 501(5) or 501(6)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount of all the Securities of that
series (or, if any Securities of
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that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified by the terms thereof) to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable. If an
Event of Default specified in Section 501(5) or 501(6) with respect to
Securities of any series at the time Outstanding occurs, the principal amount of
all the Securities of that series (or, if any Securities of that series are
Original Issue Discount Securities, such portion of the principal amount of such
Securities as may be specified by the terms thereof) shall automatically, and
without any declaration or other action on the part of the Trustee or any
Holder, become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay;
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than by such
declaration of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed therefor in
such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of that
series which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 513.
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No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if:
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for
a period of 30 days; or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security whether at the Maturity or upon
acceleration or otherwise thereof;
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each
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Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
Section 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the
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amounts due and payable on such Securities for principal and any premium
and interest, respectively.
THIRD: To the Company or any other Person or Persons entitled
thereto.
Section 507. LIMITATION ON SUITS.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST AND TO CONVERT.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right,
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which is absolute and unconditional, to receive payment of the principal of and
any premium and (subject to Section 307) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to convert such Security in accordance
with the provisions in the form of Security of any particular series pursuant to
Section 301(9) and to institute suit for the enforcement of any such payment and
right to convert, and such rights shall not be impaired without the consent of
such Holder.
Section 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
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Section 512. CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law
or with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default:
(1) in the payment of the principal of or any premium or interest
on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 514. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
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Section 515. WAIVER OF USURY, STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any usury, stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 601. CERTAIN DUTIES AND RESPONSIBILITIES.
The Trustee, prior to the occurrence of an Event of Default and
after the curing or waiving of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default to the actual knowledge of
a Responsible Officer of the Trustee has occurred, has not been waived and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent actions, its own negligent failure
to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default which may have
occurred;
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
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(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in principal
amount of the Securities at the time outstanding relating to the time,
method and place of conducting a proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
This Section is in furtherance of and subject to Sections 315 and
316 of the Trust Indenture Act.
Section 602. NOTICE OF DEFAULTS.
If a default occurs hereunder with respect to Securities of any
series, the Trustee shall give the Holders of Securities of such series notice
of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 501(4) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
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Section 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(1) the Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation,
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it shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney at the sole cost and expense
of the Company;
(7) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of, or for the supervision of, any agent or
attorney appointed with due care by it hereunder;
(8) in the event the Trustee is also acting as Paying Agent,
Authenticating Agent or Security Registrar hereunder, the rights and
protections afforded to the Trustee pursuant to this Indenture shall also
be afforded to such Paying Agent, Authenticating Agent or Registrar;
(9) the Trustee shall not be charged with knowledge of an Event of
Default unless a Responsible Officer of the Trustee obtains actual
knowledge of such event or the Trustee receives written notice of such
event from the Company or form Holders of Securities of any series so
affected evidencing no less than 51 % of the aggregate outstanding
principal amount of Securities of such series; and
(10) when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(5) or Section
501(6), such expenses (including the fees and expenses of its counsel) and
the compensation for such services are intended to constitute expenses of
administration under any bankruptcy or insolvency law.
Section 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 605. MAY HOLD SECURITIES.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become
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the owner or pledgee of Securities and, subject to Sections 608 and 613, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such
other agent.
Section 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
Section 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(3) to indemnify the Trustee and its officers, directors, agents,
and employees for, and to hold it and its officers, directors, agents, and
employees harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of the Holders of particular Securities.
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Section 608. CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.
Section 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder, which may be
Trustee hereunder for Securities of one or more other series. Each Trustee
shall be a Person that is eligible pursuant to the Trust Indenture Act to act as
such and has a combined capital and surplus of at least $50,000,000 and has its
Corporate Trust Office in the City of New York. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Securities of any series shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
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The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months,
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
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and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide
Holder of a Security of such series for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series to all
Holders of Securities of such series in the manner provided in Section 106.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its corporate trust office.
Section 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
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that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in the first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article. No trustee hereunder shall be liable for the acts or omissions of
any successor Trustee.
Section 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the
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Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities.
Section 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
Section 614. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference
is made in this Indenture to the authentication and delivery of Securities by
the Trustee or the Trustee's certificate of authentication, such reference shall
be deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be
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consolidated, or any corporation resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a party, or any
corporation succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided
such corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment by first-class mail, postage prepaid, to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, in accordance with
the provisions of Section 607.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as Trustee
By ___________________________________
As Authenticating Agent
By ___________________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee,
(1) semi-annually, not later than . . . . . . and. . . . . . in
each year, a list in such form as the Trustee may reasonably require, of
the names and addresses of the Holders of Securities of each series as of
the preceding . . . . . . or . . . . . . as the case may be; and
(2) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar.
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The Trustee may destroy any list furnished to it as provided in Section 701 upon
receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
Section 703. REPORTS BY TRUSTEE.
The Trustee shall transmit to Holder such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than the ___ day in each
calendar year, commencing in ______________.
A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
Section 704. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
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ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a corporation,
partnership or trust, shall be organized and validly existing under the
laws of the United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of and any premium
and interest on all the Securities and the performance or observance of
every covenant of this Indenture on the part of the Company to be
performed or observed;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or
any Subsidiary as a result of such transaction as having been incurred by
the Company or such Subsidiary at the time of such transaction, no Event
of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing;
and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
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Section 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities;
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to
be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company;
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events
of Default are to be for the benefit of less than all series of
Securities, stating that such additional Events of Default are expressly
being included solely for the benefit of such series);
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and
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with or without interest coupons, or to permit or facilitate the issuance
of Securities in uncertificated form;
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect to one or more series of Securities, provided that
any such addition, change or elimination (A) shall neither (i) apply to
any Security or series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify
the rights of the Holder of any such Security with respect to such
provision or (B) shall become effective only when there is no such
Security Outstanding;
(6) to secure the Securities;
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301;
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 611;
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
to this Clause (9) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect; or
(10) to make provisions with respect to the conversion rights of
Holders, including providing for the conversion of the Securities into any
security or securities of the Company.
Section 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture,
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or of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon (including any
change in the index, indices or formula pursuant to which such rate is
determined that would reduce such rate for any period) or any premium
payable upon the redemption thereof, or reduce the amount of the principal
of an Original Issue Discount Security or any other Security which would
be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 502, or change any Place of Payment where, or
the coin or currency in which, any Security or any premium or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1008, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to
require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section and
Section 1008, or the deletion of this proviso, in accordance with the
requirements of Sections 611 and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
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It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Section 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
Section 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
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ARTICLE TEN
COVENANTS
Section 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.
Section 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
Section 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to
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such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agent for any
series of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will (1) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2)
during the continuance of any default by the Company (or any other obligor upon
the Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or any premium
or interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company
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cause to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in the
Borough of Manhattan, The City of New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 1004. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate stating that a review of the activities of the Company and
its subsidiaries during the preceding fiscal year has been made under the
supervision of such officers with a view to determining whether the Company has
kept, performed, fulfilled and observed its obligations under this Indenture and
stating as to each such officer signing such Officers' Certificate that, to the
best of such officers' knowledge, the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company is in default,
specifying all such defaults and the nature and status thereof of which such
officer may have knowledge.
The Company will, so long as any of the Securities are outstanding,
deliver to the Trustee forthwith upon becoming aware of (i) an Event of Default
or default in the performance of a covenant or agreement or condition contained
in this Indenture or (ii) any default or Event of Default of the type provided
for herein specifying such default or Event of Default, notice of such default
or Event of Default.
Section 1005. EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises and the existence,
rights (charter and statutory) and franchises of its subsidiaries; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
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Section 1006. MAINTENANCE OF PROPERTIES.
The Company will cause all properties used or useful in the conduct
of its business or the business of any Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgement of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
Section 1007. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
Section 1008. WAIVER OF CERTAIN COVENANTS.
Except as otherwise specified as contemplated by Section 301 for
Securities of such series, the Company may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 301(19),
901(2) or 901(7) for the benefit of the Holders of such series, if before the
time for such compliance the Holders of at least a majority in principal amount
of the Outstanding Securities of such series shall, by act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such term, provision or condition, but no such waiver shall extend to or affect
such term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
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Section 1009. LIMITATION ON LIENS.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, create, incur, assume or guarantee any indebtedness for money
borrowed (hereinafter in Sections 1009, 1010 and 1011 referred to as "Debt"),
secured by a mortgage, security interest, pledge, lien, charge or similar
encumbrance (mortgages, security interests, pledges, liens, charges and other
encumbrances, hereinafter in Sections 1009, 1010 and 1011 referred to as a
"Mortgage") upon any Principal Property of the Company or any Restricted
Subsidiary or upon any shares of stock or indebtedness or any Restricted
Subsidiary (whether such Principal Property, shares of stock or indebtedness are
now owned or hereafter acquired) without in any such case effectively providing
concurrently with the issuance, assumption or guaranty of any such Debt that the
Outstanding Securities (together with, if the Company shall so determine, any
other indebtedness of or guarantee by the Company or such Restricted Subsidiary
ranking equally with the Outstanding Securities and then existing or thereafter
created) shall be secured equally and ratably with such Debt; provided, however,
that the foregoing restrictions shall not apply to Debt secured by:
(i) Mortgages on property, shares of stock or indebtedness of any
corporation existing at the time such corporation becomes a Restricted
Subsidiary;
(ii) Mortgages on property existing at the time of acquisition of
such property by the Company or a Restricted Subsidiary, Mortgages to
secure the payment of all or any part of the purchase price of such
property incurred prior to, at the time of, or within 180 days after the
acquisition of such property by the Company or a Restricted Subsidiary, or
Mortgages to secure any debt incurred prior to, at the time of, or within
180 days after the completion of construction or commencement of full
operation of any property for the purpose of financing all or any part of
the cost to the Company or a Restricted Subsidiary of improvements to such
property;
(iii) Mortgages securing Debt of a Restricted Subsidiary owing to
the Company or to another Restricted Subsidiary;
(iv) Mortgages existing at the date of this Indenture;
(v) Mortgages on property of a corporation existing at the time
such corporation is merged into or consolidated with the Company or a
Restricted Subsidiary
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or at the time of a sale, lease or other disposition of the properties of
a corporation as an entirety or substantially as an entirety to the
Company or a Restricted Subsidiary;
(vi) Mortgages on property of the Company or a Restricted
Subsidiary in favor of the United States of America or any State thereof,
or any department, agency, instrumentality or political subdivision
thereof, to secure any payments, including advance or progress payments,
pursuant to any contract or statute or to secure any indebtedness incurred
or guaranteed for the purpose of financing all or any part of the purchase
price or the cost of construction of the property subject to such
Mortgages (including, but not limited to, Mortgages incurred in connection
with pollution control bonds, industrial revenue bonds or similar
financings); or
(vii) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any
Mortgage referred to in the foregoing clauses (i) to (vi), inclusive;
provided, however, that such extension, renewal or replacement shall be
limited to all or a part of the property which secured the Mortgage so
extended, renewed or replaced (plus improvements on such property).
(b) Notwithstanding the foregoing provisions of this Section 1009,
the Company and any one or more Restricted Subsidiaries may issue, assume or
guarantee Debt secured by a Mortgage which would otherwise be subject to the
foregoing restrictions in an aggregate amount which, together with all other
outstanding Debt of the Company and its Restricted Subsidiaries which (if
originally issued, assumed or guaranteed at such time) would otherwise be
subject to the foregoing restrictions (not including Debt permitted to be
secured under clauses (i) through (vii) above), does not at the time exceed the
greater of $300,000,000 or 10% of Consolidated Net Tangible Assets of the
Company and its consolidated Subsidiaries as shown on the most recent
consolidated financial statements of the Company and its consolidated
Subsidiaries.
Section 1010. LIMITATION ON SALE AND LEASE-BACK.
The Company will not, nor will it permit any Restricted Subsidiary
to, enter into any arrangement with any Person that provides for the leasing to
the Company or any Restricted Subsidiary of any Principal Property (except for
leases for a term of not more than three years and except for leases between the
Company and a Restricted Subsidiary or between Restricted Subsidiaries), which
Principal Property has been or is to be sold or transferred by the Company or
such
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Restricted Subsidiary to such person, unless (a) the Company or such
Restricted Subsidiary would be entitled, pursuant to the provisions of Section
1009, to issue, assume or guarantee Debt secured by a Mortgage upon such
Principal Property at least equal in the amount to the Attributable Debt in
respect of such arrangement without equally and ratably securing the Outstanding
Securities; provided, however, that from and after the date on which such
arrangement becomes effective the Attributable Debt in respect of such
arrangement shall be deemed for all purposes under Sections 1009 and 1010 to be
Debt subject to the provisions of Section 1009, or (b) the Company shall apply
an amount in cash equal to the greater of the net proceeds of such sale or the
Attributable Debt in respect of such an arrangement to the retirement (other
than any mandatory retirement or by way or payment at maturity), within 120 days
of the effective date of any such arrangement, of Debt (except as otherwise
provided by the terms of any series of Outstanding Securities) of the Company or
any Restricted Subsidiary (other than the Debt owed by the Company or any
Restricted Subsidiary to the Company or any Restricted Subsidiary) which by its
terms matures at or is extendible or renewable at the opinion of the obligor to
a date more than twelve months after the date of the creation of such Debt.
For the purposes of this Section 1010, the term "Attributable Debt"
means, at the time of determination, the lesser of (a) the fair market value of
such property (as determined by the Board of Directors of the Company) or (b)
the present value (discounted at the rate implicit in the terms of the relevant
lease) of the obligation of the lessee for net rental payments during the
remaining term of the lease (including any period for which such lease has been
extended).
Section 1011. LIMITATIONS ON FUNDED DEBT OF RESTRICTED SUBSIDIARIES.
(a) The Company will not permit any Restricted Subsidiary to
issue, assume or guarantee any Funded Debt other than (i) Funded Debt owed to
the Company or a Restricted Subsidiary, (ii) Funded Debt existing at the date of
this Identure and extensions, renewals or replacements thereof, (iii) Funded
Debt Secured by a Mortgage excluded from the operation of Section 1009(a) by
clauses (i) through (vii) thereof, (iv) any guaranty by a Restricted Subsidiary
of Funded Debt of the Company incurred in connection with the acquisition of
such Restricted Subsidiary, or (v) Funded Debt of a corporation outstanding at
the time such corporation first becomes a Restricted Subsidiary.
(b) Notwithstanding the provisions of Section 1011(a), any
Restricted Subsidiary may issue, assume or guarantee Funded Debt which would
otherwise be subject to the restrictions of Section 1011(a) in an aggregate
amount which,
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together with the other Funded Debt of all Restricted Subsidiaries (excluding
Funded Debt permitted by clauses (i), (ii), (iii), (iv) and (v) of
Section 1011(a)), does not exceed 10% of Consolidated Net Tangible Assets.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. APPLICABILITY OF ARTICLE.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for such Securities) in
accordance with this Article.
Section 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities. In case of any redemption at the election
of the Company of less than all the Securities of any series (including any such
redemption affecting only a single Security), the Company shall, at least 60
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee in writing of such
Redemption Date, of the principal amount of Securities of such series to be
redeemed and, if applicable, of the tenor of the Securities to be redeemed. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series are to be redeemed
(unless all the Securities of such series and of a specified tenor are to be
redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for
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such Security. If less than all the Securities of such series and of a
specified tenor are to be redeemed (unless such redemption affects only a single
Security), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously called for
redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
Section 1104. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series
consisting of more than a single Security are to be redeemed, the
identification (and, in the case of partial redemption of any such
Securities, the principal amounts) of the particular Securities to be
redeemed and, if less than all the Outstanding Securities of any series
consisting of a single Security are to be redeemed, the principal amount
of the particular Security to be redeemed,
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(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said date,
(5) the place or places where each such Security is to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 1105. DEPOSIT OF REDEMPTION PRICE.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
Section 1106. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
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<PAGE>
Section 1107. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities of the same series and of
like tenor, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
Section 1201. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of Securities of any series except as otherwise
specified as contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of such Securities is herein referred to as an "optional sinking fund
payment". If provided for by the terms of any Securities, the cash amount of
any sinking fund payment may be subject to reduction as provided in Section
1202. Each sinking fund payment shall be applied to the redemption of
Securities as provided for by the terms of such Securities.
Section 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to any Securities of such series required to be made
pursuant to the terms of such Securities as and to the extent provided for by
the terms
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<PAGE>
of such Securities; provided that the Securities to be so credited have not been
previously so credited. The Securities to be so credited shall by received and
credited for such purpose by the Trustee at the Redemption Price, as specified
in the Securities so to be redeemed, for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 1203. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than . . . . . . days prior to each sinking fund payment
date for any Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than . . . . . . days prior to each such sinking fund
payment date, the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
Section 1301. APPLICABILITY OF ARTICLE; COMPANY'S OPTION TO EFFECT DEFEASANCE
OR COVENANT DEFEASANCE.
Unless otherwise provided pursuant to Section 301, this Article
Thirteen shall be applicable to the Securities of such series, and the Company
may at its option by Board Resolution, at any time, with respect to the
Securities of such series, elect to have either Section 1302 (if applicable) or
Section 1303 (if applicable) be applied to the Outstanding Securities of such
series upon compliance with the conditions set forth below in this Article
Thirteen.
Section 1302. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities or any series of Securities, as the case may
be, the Company shall be deemed to have been discharged from its obligations
with respect to such Securities as provided in this Section on and after the
date
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<PAGE>
the conditions set forth in Section 1304 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company shall
be deemed to have paid and discharged the entire indebtedness represented by
such Securities and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until
otherwise terminated or discharged hereunder; (1) the rights of Holders of such
Securities to receive, solely from the trust fund described in Section 1304 and
as more fully set forth in such Section, payments in respect of the principal of
and any premium and interest on such Securities when payments are due, (2) the
Company's obligations with respect to such Securities under Sections 304, 305,
306, 1002 and 1003, (3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, and (4) this Article. Subject to compliance with this
Article, the Company may exercise its option (if any) to have this Section
applied to any Securities notwithstanding the prior exercise of its option (if
any) to have Section 1303 applied to such Securities.
Section 1303. COVENANT DEFEASANCE.
Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities or any series of Securities, as the case may
be, (1) the Company shall be released from its obligations under Sections 1006
and 1007 (and any other Sections or covenants applicable to such Securities that
are determined pursuant to Section 301 to be subject to this provision), and any
covenants provided pursuant to Section 301(19), 901(2) or 901(7) for the benefit
of the Holders of such Securities, and (2) the occurrence of any event specified
in Section 501(4) (with respect to Sections 1006 and 1007 (and any other
Sections or covenants applicable to such Securities that are determined pursuant
to Section 301 to be subject to this provision), and any such Covenants provided
pursuant to Sections 301(19), 901(2) or 901(7) and 501(7) shall be deemed not to
be or result in an Event of Default, in each case with respect to such
Securities as provided in this Section on and after the date the conditions set
forth in Section 1304 are satisfied (hereinafter called "Covenant Defeasance").
For this purpose, such Covenant Defeasance means that, with respect to such
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such specified
Section (to the extent so specified in the case of Section 501(4)), whether
directly or indirectly by reason of any reference elsewhere herein to any such
Section or Article or by reason of any reference in any such Section or Article
to any other
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<PAGE>
provision herein or in any other document, but the remainder of this Indenture
and such Securities shall be unaffected thereby.
Section 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of Section
1302 or Section 1303 to any Securities or any series of Securities, as the case
may be:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of such
Securities, (A) in the case of Securities of such series denominated in
U.S. dollars, (i) money in an amount, (ii) U.S. Government Obligations
that through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, money in an amount, or (iii) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any premium
and interest on such Securities on the respective Stated Maturities, in
accordance with the terms of this Indenture and such Securities. As used
herein, "U.S. Government Obligation" means (x) any security that is (i) a
direct obligation of the United States of America for the payment of which
the full faith and credit of the United States of America is pledged or
(ii) an obligation of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America the payment
of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case (i) or
(ii), is not callable or redeemable at the option of the issuer thereof,
and (y) any depositary receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act) as custodian with respect to any U.S.
Government Obligation which is specified in Clause (x) above and held by
such bank for the account of the holder of such depositary receipt, or
with respect to any specific payment of principal of or interest on any
U.S. Government Obligation which is so specified and held, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of
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<PAGE>
such depositary receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of
principal or interest evidenced by such depositary receipt or (B) in the
case of Securities of such series denominated in a currency other than the
U.S. dollar, (i) money in such currency in an amount, or (ii) Foreign
Government Obligations that through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide,
not later than one day before the due date of any payment, money in such
currency in an amount, or (iii) a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or any such other qualifying trustee) to pay and discharge, the
principal of and any premium and interest on the Securities of such series
on the respective Stated Maturities, in accordance with the terms of this
Indenture and the Securities of such series. As used herein, "Foreign
Government Obligation" means (x) any security that is (i) a direct
obligation of the government that issued such currency for the payment of
which full faith and credit of such government is pledged or (ii) an
obligation of a Person controlled or supervised by and acting as an agency
or instrumentality for such government the payment of which is
unconditionally guaranteed as a full faith and credit obligation by such
government, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (y) any depositary
receipt issued by a bank (as defined in Section 3(a)(2) of the Securities
Act) as custodian with respect to any Foreign Government Obligation which
is specified in Clause (x) and held by such bank for the account of the
holder of such depositary receipt, or with respect to any specific payment
of principal of or interest on any such Foreign Government Obligation
which is so specified and held, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount received
by the custodian in respect of the Foreign Government Obligation or the
specific payment of principal or interest evidenced by such depositary
receipt.
(2) In the event of an election to have Section 1302 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (A)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of
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<PAGE>
this instrument, there has been a change in the applicable Federal income
tax law, in either case (A) or (B) to the effect that, and based thereon
such opinion shall confirm that, the Holders of such Securities will not
recognize gain or loss for Federal income tax purposes as a result of the
deposit, Defeasance and discharge to be effected with respect to such
Securities and will be subject to Federal income tax on the same amount,
in the same manner and at the same times as would be the case if such
deposit, Defeasance and discharge were not to occur.
(3) In the event of an election to have Section 1303 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and
at the same times as would be the case if such deposit and Covenant
Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities exchange,
will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to such Securities or any
other Securities shall have occurred and be continuing at the time of such
deposit or, with regard to any such event specified in Sections 501(5) and
(6), at any time on or prior to the 90th day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming all Securities are in default within the meaning
of such Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment
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<PAGE>
Company Act unless such trust shall be registered under such Act or exempt
from registration thereunder.
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
Section 1305. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations or Foreign Government Obligations
(including the proceeds thereof) deposited with the Trustee or other qualifying
trustee (solely for purposes of this Section and Section 1306, the Trustee and
any such other trustee are referred to collectively as the "Trustee") pursuant
to Section 1304 in respect of any Securities shall be held in trust and applied
by the Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal and any premium and interest, but money so held
in trust need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
or Foreign Government Obligations deposited pursuant to Section 1304 or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of Outstanding
Securities.
Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 with respect to any Securities that, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of an amount
thereof which would then be required to be deposited to effect the Defeasance or
Covenant Defeasance, as the case may be, with respect to such Securities.
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<PAGE>
Section 1306. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1302 or 1303 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1305 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
NORTHROP GRUMMAN CORPORATION
By ________________________________
ATTEST:
______________________
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as Trustee
By ________________________________
ATTEST:
________________________
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State of California )
)
County of __________ )
On ______________ before me, __________________, Notary Public, personally
appeared ___________________________________,
/ / personally known to me or / / proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
_______________________________
State of New York )
)
County of __________ )
On ______________ before me, __________________, Notary Public, personally
appeared ___________________________________,
/ / personally known to me or / / proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
_______________________________
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<PAGE>
TEMPORARY CERTIFICATE--EXCHANGEABLE FOR DEFINITIVE ENGRAVED CERTIFICATE
WHEN READY FOR DELIVERY
NORTHROP GRUMMAN CORPORATION
THIS CERTIFICATE IS TRANSFERABLE IN THE CITIES OF LOS ANGELES, SAN FRANCISCO
OR NEW YORK
INCORPORATED UNDER THE LAWS SEE REVERSE FOR
OF THE STATE OF DELAWARE CERTAIN DEFINITIONS
CUSIP 666807 10 2
This Certifies that
is the record holder of
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, $1.00 PAR VALUE, OF
NORTHROP GRUMMAN CORPORATION
transferable on the books of the Corporation by the holder hereof in
person or by duly authorized Attorney upon surrender of this
certificate properly endorsed. This certificate is not valid until
countersigned by the Transfer Agent and registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated
/s/ Sheila M. Gibbons /s/ Kent Kresa
SECRETARY CHAIRMAN OF THE BOARD
COUNTERSIGNED AND REGISTERED:
CHEMICAL BANK
TRANSFER AGENT AND REGISTRAR
BY
AUTHORIZED SIGNATURE
<PAGE>
The Corporation shall furnish without charge to each stockholder who so
requests a statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock of the
Corporation or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Such requests shall be made to
the Corporation's Secretary at the principal office of the Corporation.
This certificate also entitles the holder hereof to certain Rights as set
forth in the Rights Agreement between Northrop Corporation and Manufacturers
Hanover Trust Company, dated as of September 21, 1988, as the same shall be
amended from time to time (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of Northrop Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. Northrop Corporation will mail to the holder of this certificate a
copy of the Rights Agreement without charge after receipt of a written request
therefor. Under certain circumstances set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was or becomes an Acquiring Person or
any Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) or certain transferees of any thereof, whether currently held by or
on behalf of such Person or by any subsequent holder, may be limited as provided
in Section 7(f) of the Rights Agreement.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT -- ___________________Custodian ____________________
(Cust) (Minor)
under Uniform Gifts to Minors
Act _____________________________________________
(State)
UNIF TRF MIN ACT -- ______________Custodian (until age_______________)
(Cust)
_________________________ under Uniform Transfers
(Minor)
to Minors Act ___________________________________
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, ____________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
______________________________________
_______________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
_______________________________________________________________________________
_______________________________________________________________________________
_________________________________________________________________________Shares
of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint ____________________________________________
Attorney to transfer the said stock on the books of the within named Corporation
with full power of substitution in the premises.
Dated __________________________________
X _____________________________________
X _____________________________________
THE SIGNATURE(S) TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME(S) AS
NOTICE: WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATEVER.
Signature(s) Guaranteed
By __________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM, PURSUANT
TO S.E.C. RULE 17Ad-15.
<PAGE>
EXHIBIT 12-1
------------
RATIO OF EARNINGS TO FIXED CHARGES
($ in millions of U.S. Dollars except ratios)
<TABLE>
<CAPTION>
Six Months Years Ended December 31,
Ended -------------------------------------------------------
June 30, 1994 1993(a) 1992 1991 1990 1989
-------------- ------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings (Loss):
Income (loss) from
continuing operations
before income taxes 185 170 180 277 312 (112)
------- ------- ------- ------- ------- -------
Fixed Charges:
Portion of rent expense
deemed to be representative
of interest 14 16 17 17 16 15
Interest Expense 38 38 47 80 95 124
Amortization of debt issue costs
and other fees -- -- -- -- -- --
Total fixed charges 52 54 64 97 111 139
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Earnings plus fixed
charges 237 224 244 374 423 27
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Ratio of earnings to fixed
charges 4.6 4.1 3.8 3.8 3.8 --
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Amount by which earnings
before fixed charges are
insufficient to cover
fixed charges -- -- -- -- -- (112)
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
<FN>
(a) Pro forma ratio of earnings to fixed charges for 1993 and the six months
ended June 30, 1994, assuming that the acquisition of Grumman had occurred
at the beginning of the respective periods, would have been 1.8 and 3.2,
respectively.
</TABLE>
