EXHIBIT 10.9
OFFICERS' CERTIFICATE
PURSUANT TO SECTIONS 201, 301 AND 303
OF THE INDENTURE
The undersigned, John H. Mullan and David H. Strode, do hereby certify
that they are the duly appointed and acting Corporate Vice President and
Secretary, and the Assistant Treasurer, respectively, of Northrop Grumman
Corporation, a Delaware corporation (the "Company"). Each of the undersigned
also hereby certifies, pursuant to Sections 201, 301 and 303 of the Indenture,
dated as of October 15, 1994 (the "Indenture"), between the Company and The
Chase Manhattan Bank, as Trustee (the "Trustee"), that:
A. There is hereby established pursuant to resolutions duly adopted
by the Board of Directors of the Company on January 23, 2001, two series of
Securities (as defined in the Indenture) to be issued under the Indenture, with
the following terms (defined terms used herein and not otherwise defined herein
have the meaning set forth in the Indenture):
I. 7-1/8 % Notes due 2011
(1) The title of the Securities of the series is "7-1/8% Series A
Notes due 2011" (the "Series A Notes") and "7-1/8% Series B Notes due 2011"
(the "Series B Notes" and, together with the Series A Notes, the "Notes").
(2) The aggregate principal amount of the Notes which initially may
be authenticated and delivered under the Indenture (except for Notes
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes of the series pursuant to Sections
304, 305, 306, 906 or 1107 of the Indenture and except for any Securities
which, pursuant to Section 303 of the Indenture, are deemed never to have
been authenticated and delivered hereunder) is $750,000,000. The Company
may, without the consent of the holders of the Notes, issue additional
notes having the same ranking, interest rate, maturity, CUSIP number and
other terms as the Notes. Any additional notes having such similar terms,
together with the Notes, would constitute a single series of Notes under
the Indenture. No additional notes may be issued if an Event of Default has
occurred and is continuing with respect to the Notes.
(3) Interest on the Notes shall be payable to the persons in whose
names the Notes are registered at the close of business on the Regular
Record Date (as specified in paragraph I(5) below) for such interest
payment.
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(4) The principal of the Notes shall be payable, unless accelerated
or earlier redeemed or repurchased pursuant to the Indenture, on February
15, 2011.
(5) The rate at which each of the Notes shall bear interest shall be
7-1/8% per annum; provided, that in the event of a Non-Registration Event
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(as defined in the Registration Rights Agreement dated as of February 27,
2001 by and among the Company and the initial purchasers identified therein
(the "Registration Rights Agreement")) with respect to the Notes,
additional interest will accrue on the Notes at an annual rate of .25% for
the first 90-day period immediately following the occurrence of a Non-
Registration Event, and such annual rate will increase by an additional
.25% with respect to each subsequent 90-day period until all Non-
Registration Events have been cured, up to a maximum additional annual
interest rate of 1.0%. The additional interest will accrue from and
including the date on which any such Non-Registration Event shall occur to
but excluding the date on which all such Non-Registration Events have been
cured. The Company will pay such additional interest on each Interest
Payment Date. Such additional interest will be in addition to any other
interest payable from time to time with respect to the Notes. Interest on
the Notes shall be computed on the basis of a 360-day year of twelve 30-day
months. The date from which interest shall accrue for each of the Notes
shall be February 27, 2001. The Interest Payment Dates on which interest on
the Notes shall be payable are February 15 and August 15, commencing August
15, 2001. The Regular Record Date for the interest payable on the Notes on
any Interest Payment Date shall be the February 1 or August 1 (whether or
not a Business Day), as the case may be, next preceding such Interest
Payment Date.
(6) The principal of and interest on the Notes shall be payable in
immediately available funds at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, the City of New
York (as of the date of this Officers' Certificate, such office being
located at the office of the Trustee, 450 West 33rd Street, 15th Floor, New
York, New York 10001, Attention: Institutional Trust Services), in such
coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts, provided, however,
that at the option of the Company payment of interest may be made by wire
transfer in immediately available funds to an account maintained by the
person entitled thereto as specified in the Security Register.
(7) Northrop Grumman may redeem all or part of the Notes at any time
at its option at a redemption price equal to the greater of (a) the
principal amount of the Notes being redeemed plus accrued and unpaid
interest to the redemption date or (b) the Make-Whole Amount for the Notes
being redeemed.
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As used in this Section I(7):
"Adjusted Treasury Rate" means, with respect to any Redemption
Date, (i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15 (519)" or any successor publication
which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months before or
after the remaining term of the Notes being redeemed, yields for the two
published maturities most closely corresponding to the Comparable Treasury
Issue shall be determined and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or
does not contain such yields, the rate per year equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury
Price for such Redemption Date, in each case calculated on the third
Business Day preceding the Redemption Date, plus .25%.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
remaining term from the Redemption Date to the Stated Maturity of the
principal amount of the Notes being redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to
the remaining term of the Notes being redeemed.
"Comparable Treasury Price" means, with respect to any Redemption
Date, if clause (ii) of the Adjusted Treasury Rate is applicable, the
average of three, or such lesser number as is obtained by the Trustee,
Reference Treasury Dealer Quotations for such Redemption Date.
"Make Whole Amount" means the sum, as determined by a Quotation Agent,
of the present values of the principal amount of the Notes to be redeemed,
together with scheduled payments of interest (exclusive of interest to the
Redemption Rate) from the Redemption Date to the Stated Maturity of the
principal amount of the Notes being redeemed, in each case discounted to
the Redemption Date on a semi-annual basis, assuming a 360-day year
consisting of twelve 30-day months, at the Adjusted Treasury Rate, plus
accrued and unpaid
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interest on the principal amount of the Notes being redeemed to the
Redemption Date.
"Quotation Agent" means the Reference Treasury Dealer selected by the
Trustee after consultation with the Company.
"Reference Treasury Dealer" means any of Chase Securities Inc. and
Credit Suisse First Boston Corporation, and their respective successors and
assigns, and one other nationally recognized investment banking firm
selected by the Company that is a primary U.S. Government securities
dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue, expressed in each case as a percentage of its principal
amount, quoted in writing to the Trustee by such Reference Treasury Dealer
at 5:00 p.m., New York City time, on the third Business day preceding such
Redemption Date.
(8) There is no obligation of the Company to redeem or purchase the
Notes pursuant to any sinking fund or analogous provisions or to redeem or
purchase any of the Notes prior to the Stated Maturity at the option of the
Holder thereof.
(9) There is no provision for the conversion or exchange of the
Notes, either at the option of the Holder thereof or the Company, into or
for another security or securities of the Company.
(10) The Notes shall be issued only in fully registered form without
coupons in denominations of $1,000 and integral multiples thereof.
(11) The entire principal amount of the Notes shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 502
of the Indenture.
(12) Except as provided in subparagraph (13) below, the Notes shall be
issued in the form of one or more Global Securities, in accordance with and
subject to the provisions of Section 305 of the Indenture and as follows
(all references in this Section I to Global Securities shall be with
respect to the Notes):
(a) Notes sold within the United States to qualified
institutional buyers ("QIBs"), as defined under Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"), initially will
be represented by one or more Global Securities (the "144A Global Notes"),
and Notes sold outside of the United States in reliance on Regulation S
under the Securities
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Act initially will be represented by one or more Global Securities (the
"Regulation S Global Notes" and, together with the 144A Global Notes, the
"Global Notes"). The Global Notes will be deposited upon issuance with the
Trustee as custodian for The Depository Trust Company (the "DTC") and
registered in the name of DTC or its nominee, in each case for credit to an
account of a direct or indirect participant in DTC.
(b) Through and including the 40th day after the later of the
commencement of the offering of the Notes and the closing of the offering
(such period the "Restricted Period"), beneficial interests in the
Regulation S Global Notes may be held only through the Euroclear System
("Euroclear") and Clearstream Banking S.A. ("Clearstream") (as indirect
participants in DTC), unless transferred to a person that takes delivery
though a 144A Global Note in accordance with certain certification
requirements.
(c) Investors in the 144 Global Notes who are participants in
DTC's system ("Participants") may hold their interests therein directly
through DTC. Investors in the 144A Global Notes who are not Participants
may hold their interests therein indirectly through organizations
(including Euroclear and Clearstream) which are Participants in such
system. Investors in the Regulation S Global Notes must initially hold
their interests therein through Euroclear or Clearstream, if they are
participants in such systems, or indirectly through organizations that are
participants in such systems. After the expiration of the Restricted Period
(but not earlier), investors may also hold interests in the Regulation S
Global Notes through Participants in the DTC system other than Euroclear
and Clearstream. Euroclear and Clearstream will hold interests in the
Regulation S Global Notes on behalf of their participants through
customers' security accounts in their respective names on the books of
their respective depositories. All interests in Global Notes, including
those held through Euroclear or Clearstream, may be subject to the
procedures and requirements of DTC. Those interests held through Euroclear
or Clearstream may also be subject to the procedures and requirements of
such systems.
(d) Transfers between participants in DTC will be effected in
accordance with DTC's procedures, and will be settled in same-day funds,
and transfers between participants in Euroclear and Clearstream will be
effected in accordance with their respective rules and operating
procedures.
(e) Prior to the expiration of the Restricted Period, beneficial
interests in Regulation S Global Notes may be exchanged for beneficial
interests in 144A Global Notes only if (a) such exchange occurs in
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connection with a transfer of the Notes pursuant to Rule 144A; and (b) the
transferor first delivers to the Trustee a written certificate in the form
attached hereto as Annex I to the effect that the Notes are being
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transferred to a person (i) who the transferor reasonably believes to be a
QIB; (ii) purchasing for its own account or the account of a QIB in a
transaction meeting the requirements of Rule 144A; and (iii) in accordance
with all applicable securities laws of the states of the United States and
other jurisdictions.
(f) Beneficial interests in 144A Global Notes may be transferred to a
person who takes delivery in the form of an interest in Regulation S Global
Notes, whether before or after the expiration of the Restricted Period,
only if the transferor first delivers to the Trustee a written certificate
in the form attached hereto as Annex I to the effect that such transfer is
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being made in accordance with Rule 903 or 904 of Regulation S or Rule 144
(if available) and that, if such transfer occurs prior to the expiration of
the Restricted Period, the interest transferred will be held immediately
thereafter through Euroclear or Clearstream.
(g) In addition to the circumstances set forth in clause (2) of
Section 305 of the Indenture with respect to the exchange of Global Notes
for Notes registered in definitive form, Notes issued as Global Notes may
be exchanged in whole or in part for registered Notes if the Company in its
discretion at any time determines not to have all the Notes represented by
Global Notes; and provided, that clause (B) of clause (2) of Section 305 of
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the Indenture shall apply only if the Event of Default referred to therein
has occurred and is continuing and entitles the Holders to accelerate the
maturity of the Notes. Subject to the foregoing and to paragraph I(13)
hereof, the Global Notes are not exchangeable, except for a Global Note or
Global Notes of the same aggregate denomination to be registered in the
name of DTC or its nominee.
(13) Subject to the provisions of paragraph I(12) above, Notes that
are (i) originally issued to or transferred to an institutional "accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act who is not a QIB or (ii) issued as certificated securities
pursuant to the Indenture will be issued in definitive form. Upon the
transfer to a QIB of a Note in definitive form, such Note will, unless the
Global Note in respect of such Note has previously been exchanged for Notes
in definitive form, be exchanged for an interest in the Global Note
representing the principal amount of the Note being transferred.
(14) There shall be added to Section 501 of the Indenture the
following additional Events of Default with respect to the Notes:
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"(8) the failure of a Guarantor to promptly execute its
guaranty of the Notes upon the occurrence of the Guarantee
Event, or
(9) except as permitted by the Indenture or the Guarantee, any
Guarantee shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to
be in full force and effect or any Guarantor, or any entity
or person acting on behalf of the Guarantor, shall deny or
disaffirm its obligations under the Guarantor's Guarantee."
(15) Upon the occurrence of the Guarantee Event the Notes shall be
entitled to the benefit of guarantees to be executed by NNG and Litton,
respectively (individually a "Guarantor" and collectively "Guarantors"), in
the forms of the guarantees attached hereto as Exhibits A and B,
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respectively, and incorporated herein by this reference (the "Guarantees").
The Guarantees shall be executed by each of NNG and Litton promptly upon
the occurrence of the Guarantee Event.
(16) The following definitions shall be added to Section 101 of the
Indenture with respect to the Notes:
"Exchange Offer" shall mean the offer by NNG to purchase, and to
exchange NNG common and preferred stock for, common and preferred stock of
Litton pursuant to that certain Registration Statement on Form S-4
originally filed by NNG on February 1, 2001 with the Commission under the
Securities Act as it may be amended, supplemented, replaced or superseded.
"Guarantee Event" shall mean the occurrence of the purchase by
NNG of Litton common stock in accordance with the Exchange Offer.
"Litton" shall mean Litton Industries, Inc., a Delaware
corporation.
"NNG" shall mean NNG, Inc., a Delaware corporation, to be renamed
Northrop Grumman Corporation immediately prior to the Guarantee Event.
(17) Article Thirteen of the Indenture shall be applicable to the
Notes and in the event of the satisfaction of the conditions to Defeasance
and Discharge (Section 1302), the obligations of the Guarantors pursuant to
the Guarantees shall be discharged, and in the event of Covenant Defeasance
(Section 1303), the obligations of the Guarantors shall be relieved with
respect to the obligations of the Company that have been released (but not
the provisions of Section 501(7)).
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(18) Each Guarantee shall be subject to amendment by agreement of the
Guarantor and the Trustee in the manner provided in Article Nine of the
Indenture. Section 902 of the Indenture is hereby amended to add a new
subsection (4) as follows with respect to the Notes:
"(4) modify the obligations of a Guarantor under its Guarantee in
a manner adverse to the interests of the Holders of the
Securities."
II. 7-3/4 % Debentures due 2031
(1) The title of the Securities of the series is "7-3/4% Series A
Debentures due 2031" (the "Series A Debentures") and "7-3/4% Series B
Debentures due 2031" (the "Series B Debentures" and, together with the
Series A Debentures, the "Debentures").
(2) The aggregate principal amount of the Debentures which initially
may be authenticated and delivered under the Indenture (except for
Debentures authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Debentures of the series pursuant to
Sections 304, 305, 306, 906 or 1107 of the Indenture and except for any
Securities which, pursuant to Section 303 of the Indenture, are deemed
never to have been authenticated and delivered hereunder) is $750,000,000.
The Company may, without the consent of the holders of the Debentures,
issue additional debentures having the same ranking, interest rate,
maturity, CUSIP number and other terms as the Debentures. Any additional
debentures having such similar terms, together with the Debentures, would
constitute a single series of Debentures under the Indenture. No additional
debentures may be issued if an Event of Default has occurred and is
continuing with respect to the Debentures.
(3) Interest on the Debentures shall be payable to the persons in
whose names the Debentures are registered at the close of business on the
Regular Record Date (as specified in paragraph II(5) below) for such
interest payment.
(4) The principal of the Debentures shall be payable, unless
accelerated or earlier redeemed or repurchased pursuant to the Indenture,
on February 15, 2031.
(5) The rate at which each of the Debentures shall bear interest
shall be 7-3/4% per annum; provided, that in the event of a Non-
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Registration Event (as defined in the Registration Rights Agreement) with
respect to the Debentures, additional interest will accrue on the
Debentures at an annual rate of.25% for the first 90-day period
immediately following the occurrence of a Non-Registration Event, and such
annual rate will increase by an additional.25% with respect to each
subsequent 90-day period until all Non-Registration Events have been cured,
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up to a maximum additional annual interest rate of 1.0%. The additional
interest will accrue from and including the date on which any such Non-
Registration Event shall occur to but excluding the date on which all such
Non-Registration Events have been cured. The Company will pay such
additional interest on each Interest Payment Date. Such additional interest
will be in addition to any other interest payable from time to time with
respect to the Debentures. Interest on the Debentures shall be computed on
the basis of a 360-day year of twelve 30-day months. The date from which
interest shall accrue for each of the Debentures shall be February 27,
2001. The Interest Payment Dates on which interest on the Debentures shall
be payable are February 15 and August 15, commencing August 15, 2001. The
Regular Record Date for the interest payable on the Debentures on any
Interest Payment Date shall be the February 1 or August 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment
Date.
(6) The principal of and interest on the Debentures shall be payable
in immediately available funds at the office or agency of the Company
maintained for that purpose in the Institutional Trust Services, Borough of
Manhattan, the City of New York (as of the date of this Officers'
Certificate, such office being located at the office of the Trustee, 450
West 33rd Street, 15th Floor, New York, New York 10001, Attention:
Institutional Trust Services), in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts, provided, however, that at the option of the
Company payment of interest may be made by wire transfer in immediately
available funds to an account maintained by the person entitled thereto as
specified in the Security Register.
(7) Northrop Grumman may redeem all or part of the Debentures at any
time at its option at a redemption price equal to the greater of (a) the
principal amount of the Debentures being redeemed plus accrued and unpaid
interest to the redemption date or (b) the Make-Whole Amount for the
Debentures being redeemed.
As used in this Section II(7):
"Adjusted Treasury Rate" means, with respect to any Redemption
Date, (i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designed "H.15 (519)" or any successor publication
which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months before or
after the remaining term of the Debentures being
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redeemed, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue shall be determined and the
Adjusted Treasury Rate shall be interpolated or extrapolated from such
yields on a straight line basis, rounding to the nearest month) or (ii) if
such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate
per year equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such Redemption Date, in
each case calculated on the third Business Day preceding the Redemption
Date, plus .30%.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
remaining term from the Redemption Date to the Stated Maturity of the
principal amount of the Debentures being redeemed that would be utilized,
at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Debentures being redeemed.
"Comparable Treasury Price" means, with respect to any Redemption
Date, if clause (ii) of the Adjusted Treasury Rate is applicable, the
average of three, or such lesser number as is obtained by the Trustee,
Reference Treasury Dealer Quotations for such Redemption Date.
"Make Whole Amount" means the sum, as determined by a Quotation Agent,
of the present values of the principal amount of the Debentures to be
redeemed, together with scheduled payments of interest (exclusive of
interest to the Redemption Rate) from the Redemption Date to the Stated
Maturity of the principal amount of the Debentures being redeemed, in each
case discounted to the Redemption Date on a semi-annual basis, assuming a
360-day year consisting of twelve 30-day months, at the Adjusted Treasury
Rate, plus accrued and unpaid interest on the principal amount of the
Debentures being redeemed to the Redemption Date.
"Quotation Agent" means the Reference Treasury Dealer selected by the
Trustee after consultation with the Company.
"Reference Treasury Dealer" means any of the Chase Securities Inc. and
Credit Suisse First Boston Corporation, and their respective successors and
assigns, and one other nationally recognized investment banking firm
selected by the Company that is a primary U.S. Government securities
dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as
determined
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by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue, expressed in each case as a percentage of its principal
amount, quoted in writing to the Trustee by such Reference Treasury Dealer
at 5:00 p.m., New York City time, on the third Business day preceding such
Redemption Date.
(8) There is no obligation of the Company to redeem or purchase the
Debentures pursuant to any sinking fund or analogous provisions or to
redeem or purchase any of the Debentures prior to the Stated Maturity at
the option of the Holder thereof.
(9) There is no provision for the conversion or exchange of the
Debentures, either at the option of the Holder thereof or the Company, into
or for another security or securities of the Company.
(10) The Debentures shall be issued only in fully registered form
without coupons in denominations of $1,000 and integral multiples thereof.
(11) The entire principal amount of the Debentures shall be payable
upon declaration of acceleration of the maturity thereof pursuant to
Section 502 of the Indenture.
(12) Except as provided in subparagraph (13) below, the Debentures
shall be issued in the form of one or more Global Securities, in accordance
with and subject to the provisions of Section 305 of the Indenture and as
follows (all references in this Section II to Global Securities shall be
with respect to the Debentures):
(a) Debentures sold within the United States to qualified
institutional buyers, as defined under Rule 144A under the Securities Act
of 1933, as amended (the "Securities Act"), initially will be represented
by one or more Global Securities (the "144A Global Debentures"), and
Debentures sold outside of the United States in reliance on Regulation S
under the Securities Act initially will be represented by one or more
Global Securities (the "Regulation S Global Debentures" and, together with
the 144A Global Debentures, the "Global Debentures"). The Global Debentures
will be deposited upon issuance with the Trustee as custodian for The
Depository Trust Company (the "DTC") and registered in the name of DTC or
its nominee, in each case for credit to an account of a direct or indirect
participant in DTC.
(b) Through and including the 40th day after the later of the
commencement of the offering of the Debentures and the closing of the
offering (such period the "Restricted Period"), beneficial interests in the
Regulation S Global Debentures may be held only through the Euroclear
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System ("Euroclear") and Clearstream Banking S.A. ("Clearstream") (as
indirect participants in DTC), unless transferred to a person that takes
delivery though a 144A Global Debenture in accordance with certain
certification requirements.
(c) Investors in the 144 Global Debentures who are participants
in DTC's system ("Participants") may hold their interests therein directly
through DTC. Investors in the 144A Global Debentures who are not
Participants may hold their interests therein indirectly through
organizations (including Euroclear and Clearstream) which are Participants
in such system. Investors in the Regulation S Global Debentures must
initially hold their interests therein through Euroclear or Clearstream, if
they are participants in such systems, or indirectly through organizations
that are participants in such systems. After the expiration of the
Restricted Period (but not earlier), investors may also hold interests in
the Regulation S Global Debentures through Participants in the DTC system
other than Euroclear and Clearstream. Euroclear and Clearstream will hold
interests in the Regulation S Global Debentures on behalf of their
participants through customers' security accounts in their respective names
on the books of their respective depositories. All interests in Global
Debentures, including those held through Euroclear or Clearstream, may be
subject to the procedures and requirements of DTC. Those interests held
through Euroclear or Clearstream may also be subject to the procedures and
requirements of such systems.
(d) Transfers between participants in DTC will be effected in
accordance with DTC's procedures, and will be settled in same-day funds,
and transfers between participants in Euroclear and Clearstream will be
effected in accordance with their respective rules and operating
procedures.
(e) Prior to the expiration of the Restricted Period,
beneficial interests in Regulation S Global Debentures may be exchanged for
beneficial interests in 144A Global Debentures only if (a) such exchange
occurs in connection with a transfer of the Debentures pursuant to Rule
144A; and (b) the transferor first delivers to the Trustee a written
certificate in the form attached hereto as Annex I to the effect that the
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Debentures are being transferred to a person (i) who the transferor
reasonably believes to be a QIB; (ii) purchasing for its own account or the
account of a QIB in a transaction meeting the requirements of Rule 144A;
and (iii) in accordance with all applicable securities laws of the states
of the United States and other jurisdictions.
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(f) Beneficial interests in 144A Global Debentures may be
transferred to a person who takes delivery in the form of an interest in
Regulation S Global Debentures, whether before or after the expiration of
the Restricted Period, only if the transferor first delivers to the Trustee
a written certificate in the form attached hereto as Annex I to the effect
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that such transfer is being made in accordance with Rule 903 or 904 of
Regulation S or Rule 144 (if available) and that, if such transfer occurs
prior to the expiration of the Restricted Period, the interest transferred
will be held immediately thereafter through Euroclear or Clearstream.
(g) In addition to the circumstances set forth in clause (2) of
Section 305 of the Indenture with respect to the exchange of Global
Debentures for Debentures registered in definitive form, Debentures issued
as Global Debentures may be exchanged in whole or in part for registered
Debentures if the Company in its discretion at any time determines not to
have all the Debentures represented by Global Debentures; and provided,
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that clause (B) of clause (2) of Section 305 of the Indenture shall apply
only if the Event of Default referred to therein has occurred and is
continuing and entitles the Holders to accelerate the maturity of the
Debentures. Subject to the foregoing and to paragraph II(13) hereof, the
Global Debentures are not exchangeable, except for a Global Debenture or
Global Debentures of the same aggregate denomination to be registered in
the name of DTC or its nominee.
(13) Subject to the provisions of paragraph II(12) above, Debentures
that are (i) originally issued to or transferred to an institutional
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act who is not a QIB or (ii) issued as certificated
securities pursuant to the Indenture will be issued in definitive form.
Upon the transfer to a QIB of a Debenture in definitive form, such
Debenture will, unless the Global Debenture in respect of such Debenture
has previously been exchanged for Debentures in definitive form, be
exchanged for an interest in the Global Debenture representing the
principal amount of the Debenture being transferred.
(14) There shall be added to Section 501 of the Indenture the
following additional Events of Default with respect to the Debentures:
"(8) The failure of a Guarantor to promptly execute its
guaranty of the Debentures upon the occurrence of the
Guarantee Event; or
(9) except as permitted by the Indenture, any Guaranty shall be
held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force
and
-13-
effect or any Guarantor, or any entity or person acting
on behalf of the Guarantor, shall deny or disaffirm its
obligations under the Guarantor's Guarantee."
(15) Upon the occurrence of the Guarantee Event the Debentures shall
be entitled to the benefit of guarantees to be executed by NNG and Litton,
respectively (individually a "Guarantor" and collectively "Guarantors"), in
the forms of the guarantees attached hereto as Exhibits A and B,
-----------------
respectively, and incorporated herein by this reference (the "Guarantees").
(16) The following definitions shall be added to Section 101 of the
Indenture with respect to the Debentures:
"Exchange Offer" shall mean the offer by NNG to purchase, and to
exchange NNG common and preferred stock for, common and preferred stock of
Litton pursuant to that certain Registration Statement on Form S-4
originally filed by NNG on February 1, 2001 with the Commission under the
Securities Act as it may be amended, supplemented, replaced or superseded.
"Guarantee Event" shall mean the occurrence of the purchase by
NNG of Litton common and preferred stock in accordance with the Exchange
Offer.
"Litton" shall mean Litton Industries, Inc., a Delaware
corporation.
"NNG" shall mean NNG, Inc., a Delaware corporation, to be renamed
Northrop Grumman Corporation immediately prior to the Guarantee Event.
(17) Article Thirteen of the Indenture shall be applicable to the
Debentures and in the event of the satisfaction of the conditions to
Defeasance and Discharge (Section 1302), the obligations of the Guarantors
pursuant to the Guarantees shall be discharged, and in the event of
Covenant Defeasance (Section 1303), the obligations of the Guarantors shall
be relieved with respect to the obligations of the Company that have been
released (but not the provisions of Section 501(7)).
(18) Each Guarantee shall be subject to amendment by agreement of the
Guarantor and the Trustee, in the manner provided in Article Nine of the
Indenture. Section 902 of the Indenture is hereby amended to add a new
subsection (4) as follows with respect to the Debentures:
"(4) modify the obligations of a Guarantor under its Guarantee in
a manner adverse to the interests of the Holders of the
Securities."
-14-
B. Pursuant to Section 201 of the Indenture, the Series A Notes
and the Series A Debentures shall bear the following legends:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMP-TION THEREFROM. EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF NORTHROP
GRUMMAN THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE
THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
(I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO
IN (A) ABOVE.
In addition, the Series A Notes and the Series A Debentures acquired
by Institutional Accredited Investors shall bear the following additional
legends:
-15-
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
TRANSFER OF THE SECURITIES REPRESENTED HEREBY SHALL BE EVIDENCED
EXCLUSIVELY BY ENDORSEMENT OF THE TRANSFEROR OF THIS CERTIFICATE.
In addition, Notes and Debentures issued in the name of DTC's nominee
shall bear the following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to Issuer or its agent for registration of
transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
C. Any proposed transfer of the Notes or the Debentures, or any
interest therein, shall be subject to the delivery to the Trustee by the
transferor and/or transferee thereof of such certificates or other documents as
the Trustee may reasonably require.
D. The Series B Notes and the Series B Debentures, shall not be
subject to the transfer restrictions set forth in the Indenture. The Holders of
the Notes shall vote and consent together on all matters as one class and the
Holders of the Debentures shall vote and consent together on all matters as one
class and none of the Notes or Debentures, as the case may be, shall have the
right to vote or consent as a class separate from one another on any matter.
E. The forms of the Notes and the Debentures attached hereto as
Exhibits C and D, respectively, are approved.
- ----------------
F. The Trustee is appointed as Paying Agent (as defined in the
Indenture).
-16-
G. The foregoing forms and terms of the Notes and the Debentures have
been established in conformity with the provisions of the Indenture.
H. This Officers' Certificate shall constitute evidence of, and shall
be, action by the undersigned as Officers designated in the resolutions referred
to in paragraph A above, determining and setting the specific terms of the Notes
and the Debentures as set forth in paragraph A above.
I. Each of the undersigned has read the provisions of Sections 201,
301 and 303 of the Indenture and the definitions relating thereto and has
examined the resolutions referred to in paragraph A above and the forms of the
Notes and the Debentures and, in the opinion of each of the undersigned, has
made such examination or investigation as is necessary to enable the undersigned
to express an informed opinion as to whether or not all conditions precedent
provided in the Indenture relating to the establishment, authentication and
delivery of a series of Securities under the Indenture designated as the Notes
and the Debentures have been complied with. In the opinion of each of the
undersigned, all such conditions precedent have been complied with.
[SIGNATURE PAGE FOLLOWS]
-17-
IN WITNESS WHEREOF, the undersigned have hereunto executed this
Officers' Certificate as of February 22, 2001
/s/John H. Mullan
----------------------------------------------
Name: John H. Mullan
Title: Corporate Vice President and
Secretary
/s/David H. Strode
----------------------------------------------
Name: David H. Strode
Title: Assistant Treasurer
-18-
ANNEX I
FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
This Certificate relates to $____________ principal amount of
[designate Securities] held in __________ book entry or * __________ definitive
form by ______________ (the "Transferor") and issued under that certain
Indenture dated as of October 15, 1994 (the "Indenture") between Northrop
Grumman Corporation and The Chase Manhattan Bank, as Trustee (the "Trustee").
The Transferor*:
[_] has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Security held by the Depository a
Security or Securities in definitive, registered form of authorized
denominations in an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated
above); or
[_] has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with such request and in respect of each such Security, the
Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Securities and the transfer of this
Security does not require registration under the Securities Act of 1933, as
amended (the "Securities Act") because:*
[_] Such Security is being acquired for the Transferor's own account,
without transfer; or
[_] Such Security is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act) in reliance on Rule
144A; or
[_] Such Security is being transferred pursuant to an exemption from
registration in accordance with Rule 903 or Rule 904 under the
Securities Act; or
-1-
[_] Such Security is not a "restricted security" as defined under Rule 144
under the Securities Act.
___________________________
[INSERT NAME OF TRANSFEROR]
Dated:___________________________ By:________________________
_________________________________
*Check applicable box.
-2-
EXHIBIT A
PARENT GUARANTEE
----------------
PARENT GUARANTEE dated as of ______________, 2001 (this "Guarantee")
---------
made by Northrop Grumman Corporation, a Delaware corporation (formerly NNG,
Inc.) ("Guarantor") in favor of and for the benefit of The Chase Manhattan Bank,
---------
as trustee (the "Trustee") for the Holders (as such term is defined in the
-------
Indenture referred to below) of the 7-1/8% Series A Notes due 2011 (the "Series
------
A Notes") and the 7-1/8% Series B Notes due 2011 (the "Series B Notes" and,
- ------- --------------
together with the Series A Notes, the "Notes") and the 7-3/4% Series A
-----
Debentures due 2031 (the "Series A Debentures") and the 7-3/4% Series B
-------------------
Debentures due 2031 (the "Series B Debentures" and, together with the Series A
-------------------
Debentures, the "Debentures") of Northrop Grumman Operations Corporation, a
----------
Delaware corporation (formerly Northrop Grumman Corporation) (the "Company").
-------
The Notes and the Debentures shall be referred to collectively as the
"Securities".
- -----------
WHEREAS, the Company has entered into an Indenture dated as of October
15, 1994 between the Company and the Trustee, as supplemented by that certain
Officers' Certificate attached hereto as Exhibit A dated as of February 22, 2001
establishing the Securities (as so supplemented, and as further amended,
modified and supplemented from time to time with respect to the Securities, the
"Indenture"). Capitalized terms not otherwise defined herein shall have the
---------
meanings set forth in the Indenture; and
WHEREAS, the Company offered and sold $750,000,000 aggregate principal
amount of Series A Notes and $750,000,000 aggregate principal amount of Series A
Debentures in a private placement transaction that closed on February 27, 2001;
and
WHEREAS, pursuant to a Registration Rights Agreement entered into on
February 27, 2001 by and among the Company and the other parties thereto (the
"Registration Rights Agreement"), the Company has agreed to certain terms in
- ------------------------------
connection with the registration of the Series B Notes and the Series B
Debentures; and
WHEREAS, the Company and its affiliates (including, without
limitation, the Guarantor) derive, and expect to continue to derive, substantial
direct and indirect benefit from the transactions financed by the issuance and
sale of the Securities; and
WHEREAS, the Indenture provides that the Guarantor shall execute and
deliver this Guarantee upon the occurrence of the Guarantee Event (as defined
therein).
A-1
NOW, THEREFORE, in consideration of the foregoing, the Guarantor
hereby agrees as follows:
SECTION 1. Guarantee; Limitation of Liability.
----------------------------------
(a) The Guarantor irrevocably and unconditionally guarantees as a
primary obligor and not merely as a surety, to the Trustee and to each Holder of
a Security authenticated and delivered by the Trustee the due and punctual
payment of the principal of and any premium and interest on such Security
(including, in case of default, interest on overdue principal and interest) and
including any additional interest required to be paid according to the terms of
the Securities or the Indenture, when due, whether at stated maturity, upon
redemption or repayment, upon declaration of acceleration or otherwise according
to the terms of the Securities or the Indenture and the due and punctual
performance of all other obligations of the Company to such Holder or the
Trustee, all in accordance with the terms of the Securities and the Indenture
(such obligations being the "Guaranteed Obligations"), and agrees to pay any and
----------------------
all expenses (including reasonable counsel fees and expenses) incurred by such
Holder or the Trustee in enforcing any rights under this Guarantee. Without
limiting the generality of the foregoing, the Guarantor's liability shall extend
to all amounts that constitute part of the Guaranteed Obligations and would be
owed by the Company to such Holder or the Trustee under the Securities or the
Indenture but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
the Company because it is the intention of the Guarantor, the Trustee and the
Holders that the Guaranteed Obligations should be determined without regard to
any rule of law or order that might relieve the Company of any portion of the
Guaranteed Obligations.
(b) Notwithstanding anything to the contrary in this Agreement, the
Guarantor hereby, and the Trustee and each Holder by accepting the benefits of
this Guarantee, confirms that it is its intention that the guarantee by the
Guarantor pursuant to this Guarantee together with each other guarantee by such
Guarantor of Participating Indebtedness (as defined below) shall not constitute
a fraudulent transfer or conveyance for purposes of any applicable provisions of
Title 11 of the United States Code, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act, or any similar federal or state law. To
effectuate the foregoing intention, the obligations of the Guarantor under this
Guarantee and each other guarantee of Participating Indebtedness shall be
limited, collectively, to such maximum amount as will, after giving effect to
such maximum amount and all other liabilities of such Guarantor, contingent or
otherwise, that are relevant under such laws, and after giving effect to any
rights to subrogation, reimbursement, indemnification or contribution of such
Guarantor pursuant to applicable law or pursuant to any agreement, result in the
obligations of such Guarantor in respect of such maximum amount not constituting
a fraudulent transfer or conveyance. The Trustee and each Holder by accepting
the
A-2
benefits of this Guarantee confirms its intention that, in the event of a
bankruptcy, reorganization or other similar proceeding of the Guarantor in which
concurrent claims are made upon such Guarantor hereunder and under any other
guarantee of Participating Indebtedness, to the extent such claims will not be
fully satisfied, each such claimant with a valid claim against the Guarantor
shall be entitled to a ratable share of all payments by such Guarantor in
respect of such concurrent claims. For purposes of this Section l(b),
"Participating Indebtedness" means any Indebtedness (as defined below) of the
Company that is guaranteed by such Guarantor pursuant to a guarantee (i) the
incurrence of which is not prohibited by the terms of the Indenture or any
agreement governing any other Participating Indebtedness then outstanding (or,
if so prohibited by the Indenture or any such agreement, is permitted as a
result of a consent or waiver thereunder) and (ii) that contains a limitation of
liability and confirmation of intention regarding ratability of payments on
substantially the terms set forth in this Section l(b). "Indebtedness" means
any indebtedness, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit and, to the extent not otherwise included, the guarantee by the Company
of any indebtedness of any other Person.
(c) Anything contained herein to the contrary notwithstanding, the
liability of the Company in respect of the Securities guaranteed by the
Guarantor hereunder shall not be limited by the terms of Section l(b).
SECTION 2. Guarantee Absolute. The Guarantor guarantees that the
------------------
Guaranteed Obligations will be paid or performed strictly in accordance with the
terms of the Securities and the Indenture, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of any Holder with respect thereto. The obligations of the
Guarantor under this Guarantee are independent of the Guaranteed Obligations,
and a separate action or actions may be brought and prosecuted against such
Guarantor to enforce this Guarantee, irrespective of whether any action is
brought against the Company or whether the Company is joined in any such action
or actions. The liability of the Guarantor under this Guarantee shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Securities or the
Indenture or any agreement or instrument relating to the Securities or the
Indenture or any failure to enforce the provisions thereof;
(b) any renewal, extension or other change in the time, manner or
place of payment or performance of, or in any other term of, all or any of
the Guaranteed Obligations, or any other amendment or waiver of or any
consent to the departure from the Securities or the Indenture;
(c) any settlement, compromise, release or discharge, or acceptance or
refusal of any offer of performance with respect to, or any substitution
for,
A-3
the Guaranteed Obligations or any agreement related thereto and/or any
subordination of the payment of the same to the payment of any other
obligations;
(d) any taking, exchange, release or non-perfection of any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind, whether
or not filed, recorded or otherwise perfected under applicable law (each a
"Lien"), in any real or personal property to secure payment or performance
----
of any or all of the Guaranteed Obligations (whether now or hereafter
granted, the "Collateral"), or any taking, release, amendment, waiver of,
----------
or consent to the departure from, any other guarantee, for all or any of
the Guaranteed Obligations;
(e) any manner of application of Collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any Collateral or any other assets of the Company or any
Subsidiary;
(f) any change, restructuring or termination of the corporate
structure or existence of the Company or any Subsidiary; or
(g) any other circumstance (including, without limitation, any statute
of limitations) that might otherwise constitute a defense available to, or
a discharge of, the Company or the Guarantor of the Guaranteed Obligations.
This Guarantee shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by any Holder or the Trustee upon the
insolvency, bankruptcy or reorganization of the Company or for any other reason,
all as though such payment had not been made. The Guarantor further agrees, to
the fullest extent that it may lawfully do so, that, as between such Guarantor
on the one hand, and the Holders and the Trustee, on the other hand, (i) the
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article Five of the Indenture for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition extant under any
applicable bankruptcy law preventing such acceleration in respect of the
obligations guaranteed hereby and (ii) in the event of any declarations of
acceleration of such obligations as provided in Article Five of the Indenture,
such obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantor for the purpose of this Guarantee. In addition,
without limiting the foregoing provision, upon effectiveness of an acceleration
under Article Five of the Indenture, the Trustee shall promptly make a demand
for payment on the Securities under this Guarantee provided for hereunder and
not discharged.
A-4
SECTION 3. Waivers.
-------
(a) The Guarantor hereby waives: (i) promptness, diligence,
presentment, notice of acceptance and any other notice with respect to any of
the Guaranteed Obligations and this Guarantee, (ii) any requirement to file any
claims with a court in the event of merger or bankruptcy of the Company or any
guarantor of the Guaranteed Obligations, (iii) any right to require a proceeding
first against the Company or any other guarantor of the Guaranteed Obligations,
(iv) the benefit of discussion or protest or notice with respect to any such
Securities or the Indebtedness evidenced thereby, (v) any requirement that any
Holder or the Trustee protect, secure, perfect or insure any Lien or any
Collateral subject thereto or exhaust any right or take any action against the
Company or any other Person or any Collateral, (vi) any defense arising by
reason of the incapacity, lack of authority or any disability or other defense
of the Company, (vii) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
any other respects more burdensome than that of the principal, (viii) any
defense based upon any errors or omissions of the Trustee or the Holders'
administration of the Guaranteed Obligations, and (ix) any rights to set-offs,
recoupments and counterclaims.
(b) The Guarantor hereby irrevocably waives all right to trial by jury
in any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Securities or the Indenture,
the transactions contemplated thereby or the actions of the Trustee in the
negotiation, administration, performance or enforcement thereof.
SECTION 4. Financial Condition of the Company. The Guarantor
----------------------------------
represents and warrants that it is presently informed of the financial condition
of the Company and of all other circumstances which a diligent inquiry would
reveal and which bear upon the risk of nonpayment of the Guaranteed Obligations.
The Guarantor hereby covenants that it will continue to keep itself informed of
the Company's financial condition and of all other circumstances which bear upon
the risk of nonpayment and hereby waives any duty on the part of the Trustee or
any Holder to disclose or discuss with such Guarantor its assessment, or such
Guarantor's assessment, of the financial condition of the Company.
SECTION 5. Subrogation. The Guarantor will not exercise any rights
-----------
that it may acquire by way of subrogation under this Guarantee, by any payment
made hereunder or otherwise, until all the Guaranteed Obligations shall have
been indefeasibly paid in full in cash. If any amount shall be paid to the
Guarantor on account of any such subrogation rights at any time when all the
Guaranteed Obligations shall not have been paid in full, such amount shall be
held in trust for the benefit of the Holders and the Trustee and shall forthwith
be paid to the Trustee, on
A-5
behalf of the Holders, to be credited and applied to the Guaranteed Obligations,
whether matured or unmatured.
SECTION 6. Amendments, Etc. No amendment or waiver of any provision
----------------
of this Guarantee and no consent to any departure by the Guarantor therefrom
shall in any event be effective unless the same shall be in writing and signed
by the Trustee, on behalf of the Holders, pursuant to the provisions of Article
Nine of the Indenture, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
SECTION 7. Notices, Etc. All notices and other communications
-------------
provided for hereunder shall be in writing and delivered in person or mailed by
first-class mail, if to the Guarantor, addressed to it at the address of the
Company at 1840 Century Park East, Los Angeles, California 90067, Attention:
Vice President and Secretary, if to any Holder, addressed to it c/o the Trustee
at 450 West 33rd Street, 15th Floor, New York, New York 10001, Attention:
Institutional Trust Services, and if to the Trustee, addressed to it at 450 West
33rd Street, 15th Floor, New York, New York 10001, Attention: Institutional
Trust Services, or as to any party at such other address as shall be designated
by such party in a written notice to each other party. All such notices and
other communications shall, when mailed by first class mail, be effective when
deposited in the first class mails.
SECTION 8. No Waiver; Remedies. No failure on the part of any Holder
-------------------
or the Trustee to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
SECTION 9. Continuing Guarantee. This Guarantee is a continuing
--------------------
guarantee and shall (a) remain in full force and effect until the earlier of the
payment in full (including deemed payment pursuant to Section 1302 of the
Indenture) of the Guaranteed Obligations and all other amounts payable under
this Guarantee, and the termination of this Guarantee pursuant to Section 10 of
this Guarantee, (b) subject to the terms hereof, be binding upon the Guarantor,
its respective successors and assigns and (c) inure to the benefit of and be
enforceable by each Holder and the Trustee and their respective successors,
transferees and assigns.
SECTION 10. Guarantor May Consolidate, Etc., on Certain Terms. Except
-------------------------------------------------
with the consent of the holders of Securities as provided in the Indenture, the
Guarantor may not consolidate with or merge into another entity, or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person unless:
A-6
(a) any successor entity is a corporation, partnership or trust
organized and validly existing under the laws of the United States or any
state thereof;
(b) the successor entity assumes the Guarantor's obligations under
this Guarantee;
(c) 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, has occurred and is continuing; and
(d) the Guarantor delivers to the Trustee certificates and opinions to
the effect that the transaction complies with the Indenture.
Upon any such consolidation or merger or conveyance, transfer or lease
of the properties and assets of the Guarantor as an entirety to any Person, the
successor Person will succeed to, and be substituted for, such Guarantor under
the Indenture and this Guarantee, and the Guarantor, except in the case of a
lease, will be relieved of all obligations and covenants under the Indenture and
this Guarantee.
SECTION 11. Additional Guarantees of Material Subsidiaries. If any
----------------------------------------------
Material Subsidiary guarantees the obligations under the Company's credit
facility, to be entered into upon consummation of the Guarantee Event, including
any replacement, amendment, supplement, restatement or renewal of such credit
facility, the Guarantor shall cause such Material Subsidiary to execute a
guarantee substantially similar to this Guarantee to guarantee the obligations
of the Company under the Securities, except that the Guarantor shall not be so
obligated to the extent that any such Material Subsidiary guarantee would not be
permitted pursuant to the terms of the Indenture. The term "Material
--------
Subsidiary" means, at any time, any direct or indirect Subsidiary of the
- ----------
Guarantor, including, but not limited to, Subsidiaries of the Company and Litton
Industries, Inc., if, at such time, such Subsidiary would qualify as a
"significant subsidiary" of the Guarantor under Regulation S-X promulgated under
the Securities Act of 1933 as in effect on the date hereof ("Regulation S-X").
--------------
The term "Subsidiary" shall have the meaning set forth in Regulation S-X.
----------
SECTION 12. Registration Rights Agreement. The Guarantor hereby
-----------------------------
agrees to become a party to the Registration Rights Agreement on the date hereof
and to comply with the Registration Rights Agreement that are applicable to the
Company with respect to the Securities as they relate to its Guarantee.
SECTION 13. Governing Law. This Guarantee shall be governed by, and
-------------
construed in accordance with, the law of the State of New York.
A-7
SECTION 14. Counterparts. This Guarantee may be executed in one or
------------
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
A-8
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
NORTHROP GRUMMAN
CORPORATION (formerly NNG, Inc.)
By______________________________
Name:
Title
By______________________________
Name:
Title
A-9
EXHIBIT B
LITTON GUARANTEE
----------------
LITTON GUARANTEE dated as of __________, 2001 (this "Guarantee") made
---------
by Litton Industries, Inc., a Delaware corporation ("Guarantor") in favor of and
---------
for the benefit of The Chase Manhattan Bank, as trustee (the "Trustee") for the
-------
Holders (as such term is defined in the Indenture referred to below) of the 7-
1/8% Series A Notes due 2011 (the "Series A Notes") and the 7-1/8% Series B
--------------
Notes due 2011 (the "Series B Notes" and, together with the Series A Notes, the
--------------
"Notes") and the 7-3/4% Series A Debentures due 2031 (the "Series A Debentures")
----- -------------------
and the 7-3/4% Series B Debentures due 2031 (the "Series B Debentures" and,
-------------------
together with the Series A Debentures, the "Debentures") of Northrop Grumman
----------
Operations Corporation, a Delaware corporation (formerly Northrop Grumman
Corporation) (the "Company"). The Notes and the Debentures shall be referred to
-------
collectively as the "Securities".
----------
WHEREAS, the Company has entered into an Indenture dated as of October
15, 1994 between the Company and the Trustee, as supplemented by that certain
Officers' Certificate attached hereto as Exhibit A dated as of February 22, 2001
establishing the Securities (as so supplemented, and as further amended,
modified and supplemented from time to time with respect to the Securities, the
"Indenture"). Capitalized terms not otherwise defined herein shall have the
---------
meanings set forth in the Indenture; and
WHEREAS, the Company offered and sold $750,000,000 aggregate principal
amount of Series A Notes and $750,000,000 aggregate principal amount of Series A
Debentures in a private placement transaction that closed on February 27, 2001;
and
WHEREAS, pursuant to a Registration Rights Agreement entered into on
February 27, 2001 by and among the Company and the other parties thereto (the
"Registration Rights Agreement"), the Company has agreed to certain terms in
- ------------------------------
connection with the registration of the Series B Notes and the Series B
Debentures; and
WHEREAS, the Company and its affiliates (including, without
limitation, the Guarantor) derive, and expect to continue to derive, substantial
direct and indirect benefit from the transactions financed by the issuance and
sale of the Securities; and
WHEREAS, the Indenture provides that the Guarantor shall execute and
delivery this Guarantee upon the occurrence of the Guarantee Event (as defined
therein).
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NOW, THEREFORE, in consideration of the foregoing, the Guarantor
hereby agrees as follows:
SECTION 1. Guarantee; Limitation of Liability.
----------------------------------
(a) The Guarantor irrevocably and unconditionally guarantees as a
primary obligor and not merely as a surety, to the Trustee and to each Holder of
a Security authenticated and delivered by the Trustee the due and punctual
payment of the principal of and any premium and interest on such Security
(including, in case of default, interest on overdue principal and interest) and
including any additional interest required to be paid according to the terms of
the Securities or the Indenture, when due, whether at stated maturity, upon
redemption or repayment, upon declaration of acceleration or otherwise according
to the terms of the Securities or the Indenture and the due and punctual
performance of all other obligations of the Company to such Holder or the
Trustee, all in accordance with the terms of the Securities and the Indenture
(such obligations being the "Guaranteed Obligations"), and agrees to pay any and
----------------------
all expenses (including reasonable counsel fees and expenses) incurred by such
Holder or the Trustee in enforcing any rights under this Guarantee. Without
limiting the generality of the foregoing, the Guarantor's liability shall extend
to all amounts that constitute part of the Guaranteed Obligations and would be
owed by the Company to such Holder or the Trustee under the Securities or the
Indenture but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
the Company because it is the intention of the Guarantor, the Trustee and the
Holders that the Guaranteed Obligations should be determined without regard to
any rule of law or order that might relieve the Company of any portion of the
Guaranteed Obligations.
(b) Notwithstanding anything to the contrary in this Agreement, the
Guarantor hereby, and the Trustee and each Holder by accepting the benefits of
this Guarantee, confirms that it is its intention that the guarantee by the
Guarantor pursuant to this Guarantee together with each other guarantee by such
Guarantor of Participating Indebtedness (as defined below) shall not constitute
a fraudulent transfer or conveyance for purposes of any applicable provisions of
Title 11 of the United States Code, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act, or any similar federal or state law. To
effectuate the foregoing intention, the obligations of the Guarantor under this
Guarantee and each other guarantee of Participating Indebtedness shall be
limited, collectively, to such maximum amount as will, after giving effect to
such maximum amount and all other liabilities of such Guarantor, contingent or
otherwise, that are relevant under such laws, and after giving effect to any
rights to subrogation, reimbursement, indemnification or contribution of such
Guarantor pursuant to applicable law or pursuant to any agreement, result in the
obligations of such Guarantor in respect of such maximum amount not constituting
a fraudulent transfer or conveyance. The Trustee and each Holder by accepting
the
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benefits of this Guarantee confirms its intention that, in the event of a
bankruptcy, reorganization or other similar proceeding of the Guarantor in which
concurrent claims are made upon such Guarantor hereunder and under any other
guarantee of Participating Indebtedness, to the extent such claims will not be
fully satisfied, each such claimant with a valid claim against the Guarantor
shall be entitled to a ratable share of all payments by such Guarantor in
respect of such concurrent claims. For purposes of this Section l(b),
"Participating Indebtedness" means any Indebtedness (as defined below) of the
Company that is guaranteed by such Guarantor pursuant to a guarantee (i) the
incurrence of which is not prohibited by the terms of the Indenture or any
agreement governing any other Participating Indebtedness then outstanding (or,
if so prohibited by the Indenture or any such agreement, is permitted as a
result of a consent or waiver thereunder) and (ii) that contains a limitation of
liability and confirmation of intention regarding ratability of payments on
substantially the terms set forth in this Section l(b). "Indebtedness" means
any indebtedness, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit and, to the extent not otherwise included, the guarantee by the Company
of any indebtedness of any other Person.
(c) Anything contained herein to the contrary notwithstanding, the
liability of the Company in respect of the Securities guaranteed by the
Guarantor hereunder shall not be limited by the terms of Section l(b).
SECTION 2. Guarantee Absolute. The Guarantor guarantees that the
------------------
Guaranteed Obligations will be paid or performed strictly in accordance with the
terms of the Securities and the Indenture, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of any Holder with respect thereto. The obligations of the
Guarantor under this Guarantee are independent of the Guaranteed Obligations,
and a separate action or actions may be brought and prosecuted against such
Guarantor to enforce this Guarantee, irrespective of whether any action is
brought against the Company or whether the Company is joined in any such action
or actions. The liability of the Guarantor under this Guarantee shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Securities or the
Indenture or any agreement or instrument relating to the Securities or the
Indenture or any failure to enforce the provisions thereof;
(b) any renewal, extension or other change in the time, manner or
place of payment or performance of, or in any other term of, all or any of
the Guaranteed Obligations, or any other amendment or waiver of or any
consent to the departure from the Securities or the Indenture;
(c) any settlement, compromise, release or discharge, or acceptance or
refusal of any offer of performance with respect to, or any substitution
for,
B-3
the Guaranteed Obligations or any agreement related thereto and/or any
subordination of the payment of the same to the payment of any other
obligations;
(d) any taking, exchange, release or non-perfection of any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind, whether
or not filed, recorded or otherwise perfected under applicable law (each a
"Lien"), in any real or personal property to secure payment or performance
----
of any or all of the Guaranteed Obligations (whether now or hereafter
granted, the "Collateral"), or any taking, release, amendment, waiver of,
----------
or consent to the departure from, any other guarantee, for all or any of
the Guaranteed Obligations;
(e) any manner of application of Collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any Collateral or any other assets of the Company or any
Subsidiary;
(f) any change, restructuring or termination of the corporate
structure or existence of the Company or any Subsidiary; or
(g) any other circumstance (including, without limitation, any statute
of limitations) that might otherwise constitute a defense available to, or
a discharge of, the Company or the Guarantor of the Guaranteed Obligations.
This Guarantee shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Holder or the Trustee upon the insolvency,
bankruptcy or reorganization of the Company or for any other reason, all as
though such payment had not been made. The Guarantor further agrees, to the
fullest extent that it may lawfully do so, that, as between such Guarantor on
the one hand, and the Holders and the Trustee, on the other hand, (i) the
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article Five of the Indenture for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition extant under any
applicable bankruptcy law preventing such acceleration in respect of the
obligations guaranteed hereby and (ii) in the event of any declarations of
acceleration of such obligations as provided in Article Five of the Indenture,
such obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantor for the purpose of this Guarantee. In addition,
without limiting the foregoing provision, upon effectiveness of an acceleration
under Article Five of the Indenture, the Trustee shall promptly make a demand
for payment on the Securities under this Guarantee provided for hereunder and
not discharged.
B-4
SECTION 3. Waivers.
-------
(a) The Guarantor hereby waives: (i) promptness, diligence,
presentment, notice of acceptance and any other notice with respect to any of
the Guaranteed Obligations and this Guarantee, (ii) any requirement to file any
claims with a court in the event of merger or bankruptcy of the Company or any
guarantor of the Guaranteed Obligations, (iii) any right to require a proceeding
first against the Company or any other guarantor of the Guaranteed Obligations,
(iv) the benefit of discussion or protest or notice with respect to any such
Securities or the Indebtedness evidenced thereby, (v) any requirement that any
Holder or the Trustee protect, secure, perfect or insure any Lien or any
Collateral subject thereto or exhaust any right or take any action against the
Company or any other Person or any Collateral, (vi) any defense arising by
reason of the incapacity, lack of authority or any disability or other defense
of the Company, (vii) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
any other respects more burdensome than that of the principal, (viii) any
defense based upon any errors or omissions of the Trustee or the Holders'
administration of the Guaranteed Obligations, and (ix) any rights to set-offs,
recoupments and counterclaims.
(b) The Guarantor hereby irrevocably waives all right to trial by jury
in any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Securities or the Indenture,
the transactions contemplated thereby or the actions of the Trustee in the
negotiation, administration, performance or enforcement thereof.
SECTION 4. Financial Condition of the Company. The Guarantor
----------------------------------
represents and warrants that it is presently informed of the financial condition
of the Company and of all other circumstances which a diligent inquiry would
reveal and which bear upon the risk of nonpayment of the Guaranteed Obligations.
The Guarantor hereby covenants that it will continue to keep itself informed of
the Company's financial condition and of all other circumstances which bear upon
the risk of nonpayment and hereby waives any duty on the part of the Trustee or
any Holder to disclose or discuss with such Guarantor its assessment, or such
Guarantor's assessment, of the financial condition of the Company.
SECTION 5. Subrogation. The Guarantor will not exercise any rights
-----------
that it may acquire by way of subrogation under this Guarantee, by any payment
made hereunder or otherwise, until all the Guaranteed Obligations shall have
been indefeasibly paid in full in cash. If any amount shall be paid to the
Guarantor on account of any such subrogation rights at any time when all the
Guaranteed Obligations shall not have been paid in full, such amount shall be
held in trust for the benefit of the Holders and the Trustee and shall forthwith
be paid to the Trustee, on
B-5
behalf of the Holders, to be credited and applied to the Guaranteed Obligations,
whether matured or unmatured.
SECTION 6. Amendments, Etc. No amendment or waiver of any provision
----------------
of this Guarantee and no consent to any departure by the Guarantor therefrom
shall in any event be effective unless the same shall be in writing and signed
by the Trustee, on behalf of the Holders, pursuant to the provisions of Article
Nine of the Indenture, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
SECTION 7. Notices, Etc. All notices and other communications
-------------
provided for hereunder shall be in writing and delivered in person or mailed by
first-class mail, if to the Guarantor, addressed to it at the address of the
Company at 1840 Century Park East, Los Angeles, California 90067, Attention:
Vice President and Secretary, if to any Holder, addressed to it c/o the Trustee
at 450 West 33rd Street, 15th Floor, New York, New York 10001, Attention:
Institutional Trust Services, and if to the Trustee, addressed to it at 450 West
33rd Street, 15th Floor, New York, New York 10001, Attention: Institutional
Trust Services, or as to any party at such other address as shall be designated
by such party in a written notice to each other party. All such notices and
other communications shall, when mailed by first class mail, be effective when
deposited in the first class mails.
SECTION 8. No Waiver; Remedies. No failure on the part of any Holder
-------------------
or the Trustee to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
SECTION 9. Continuing Guarantee. This Guarantee is a continuing
--------------------
guarantee and shall (a) remain in full force and effect until the earlier of the
payment in full (including deemed payment pursuant to Section 1302 of the
Indenture) of the Guaranteed Obligations and all other amounts payable under
this Guarantee, and the termination of this Guarantee pursuant to Section 10 of
this Guarantee, (b) subject to the terms hereof, be binding upon the Guarantor,
its respective successors and assigns and (c) inure to the benefit of and be
enforceable by each Holder and the Trustee and their respective successors,
transferees and assigns.
SECTION 10. Guarantor May Consolidate, Etc., on Certain Terms. Except
-------------------------------------------------
with the consent of the holders of Securities as provided in the Indenture, the
Guarantor may not consolidate with or merge into another entity, or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person unless:
B-6
(a) any successor entity is a corporation, partnership or trust
organized and validly existing under the laws of the United States or any
state thereof;
(b) the successor entity assumes the Guarantor's obligations under
this Guarantee;
(c) 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, has occurred and is continuing; and
(d) the Guarantor delivers to the Trustee certificates and opinions to
the effect that the transaction complies with the Indenture.
Upon any such consolidation or merger or conveyance, transfer or lease
of the properties and assets of the Guarantor as an entirety to any Person, the
successor Person will succeed to, and be substituted for, such Guarantor under
the Indenture and this Guarantee, and the Guarantor, except in the case of a
lease, will be relieved of all obligations and covenants under the Indenture and
this Guarantee.
SECTION 11. Registration Rights Agreement. The Guarantor hereby
-----------------------------
agrees to become a party to the Registration Rights Agreement on the date hereof
and to comply with the provisions of the Registration Rights Agreement that are
applicable to the Company with respect to the Securities as they relate to its
Guarantee.
SECTION 12. Governing Law. This Guarantee shall be governed by, and
-------------
construed in accordance with, the law of the State of New York.
SECTION 13. Counterparts. This Guarantee may be executed in one or
------------
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
B-7
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
LITTON INDUSTRIES, INC.
By_____________________________
Name:
Title
By____________________________
Name:
Title
B-8
EXHIBIT C
[Form of Note]
[Insert for Notes issued as Global Securities:]
THIS SECURITY IS A [U.S./REGULATION S] 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.
[Insert for Notes issued in the name of DTC's nominee:]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
[Insert for all Series A Notes:]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
C-1
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN
THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
[Insert for Series A Notes issued to Institutional Accredited Investors:]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS IT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
TRANSFER OF THE SECURITIES REPRESENTED HEREBY SHALL BE EVIDENCED EXCLUSIVELY BY
ENDORSEMENT OF THE TRANSFEROR OF THIS CERTIFICATE.
NORTHROP GRUMMAN CORPORATION
7-1/8% NOTE DUE 2011
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 on February 15, 2011 and to pay
interest thereon from February 27, 2001 or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on
February 15 and August
C-2
15 in each year, commencing August 15, 2001 at the rate of 7-1/8% per annum,
until the principal hereof is paid or made available for payment; provided, that
--------
in the event of a Non-Registration Event (as defined in the Registration Rights
Agreement dated as of February 27, 2001 by and among the Company and the initial
purchasers identified therein) with respect to the Securities of this series,
additional interest will accrue on such Securities at an annual rate of .25% for
the first 90-day period immediately following the occurrence of a Non-
Registration Event, and such annual rate will increase by an additional .25%
with respect to each subsequent 90-day period until all Non-Registration Events
have been cured, up to a maximum additional annual interest rate of 1.0%. The
additional interest will accrue from and including the date on which any such
Non-Registration Event shall occur to but excluding the date on which all such
Non-Registration Events have been cured. The Company will pay such additional
interest on each Interest Payment Date. Such additional interest will be in
addition to any other interest payable from time to time with respect to the
Securities of this series. 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 February 1 or August 1
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture.
Payment of the principal of (and premium, if any) and any such
interest on this Security will be made in immediately available funds at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, the City of New York in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payment of
interest may be made by wire transfer in immediately available funds 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.
C-3
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
[SIGNATURE PAGE FOLLOWS]
C-4
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: _________, 2001
NORTHROP GRUMMAN CORPORATION
By ___________________________________
Albert F. Myers
Corporate Vice President and Treasurer
Attest:
[SEAL] By ___________________________________
John H. Mullan
Corporate Vice President and Secretary
This is one of the Securities of the series designated on the face
hereof referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, As Trustee
By _________________________________
Authorized Officer
C-5
[REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of October 15, 1994 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank, 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. The Securities are
unsecured general obligations of the Company.
The Securities of this series are subject to redemption upon not less
than 30 days notice by mail, as a whole or in part, at the election of the
Company at a Redemption Price equal to the greater of (a) the principal amount
of the Securities being redeemed plus accrued and unpaid interest to the
Redemption Date or (2) the Make-Whole Amount for the Securities being redeemed.
As used in this Security:
"Adjusted Treasury Rate" means, with respect to any Redemption
Date, (i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15 (519)" or any successor publication
which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months before or
after the remaining term of the Securities being redeemed, yields for the
two published maturities most closely corresponding to the Comparable
Treasury Issue shall be determined and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or
does not contain such yields, the rate per year equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury
Price for such Redemption Date, in each case calculated on the third
Business Day preceding the Redemption Date, plus .25%.
"Comparable Treasury Issue" means the United States Treasury
security selected by the Quotation Agent as having a maturity comparable to
the
C-6
remaining term from the Redemption Date to the Stated Maturity of the
principal amount of the Securities being redeemed that would be utilized,
at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of this Security.
"Comparable Treasury Price" means, with respect to any Redemption
Date, if clause (ii) of the Adjusted Treasury Rate is applicable, the
average of three, or such lesser number as is obtained by the Trustee,
Reference Treasury Dealer Quotations for such Redemption Date.
"Make Whole Amount" means the sum, as determined by a Quotation
Agent, of the present values of the principal amount of the Securities to
be redeemed, together with scheduled payments of interest (exclusive of
interest to the Redemption Rate) from the Redemption Date to the Stated
Maturity of the principal amount of the Securities being redeemed, in each
case discounted to the Redemption Date on a semi-annual basis, assuming a
360-day year consisting of twelve 30-day months, at the Adjusted Treasury
Rate, plus accrued interest on the principal amount of the Securities being
redeemed to the Redemption Date.
"Quotation Agent" means the Reference Treasury Dealer selected by
the Trustee after consultation with the Company.
"Reference Treasury Dealer" means any of Chase Securities Inc.
and Credit Suisse First Boston Corporation, and their respective successors
and assigns, and one other nationally recognized investment banking firm
selected by the Company that is a primary U.S. Government securities
dealer.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue, expressed in each case as a percentage of its principal
amount, quoted in writing to the Trustee by such Reference Treasury Dealer
at 5:00 p.m., New York City time, on the third Business Day preceding such
Redemption Date.
In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and Events
of
C-7
Default with respect to this Security, in each case upon compliance with
certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any premium or
interest hereon on or after the respective due dates expressed herein.
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.
C-8
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.
C-9
EXHIBIT D
[Form of Debenture]
[Insert for Debentures issued as Global Securities:]
THIS SECURITY IS A [U.S./REGULATION S] 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.
[Insert for Notes issued in the name of DTC's nominee:]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
[Insert for all Series A Debentures:]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
D-1
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN
THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
[Insert for Series A Debentures issued to Institutional Accredited Investors:]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS IT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
TRANSFER OF THE SECURITIES REPRESENTED HEREBY SHALL BE EVIDENCED EXCLUSIVELY BY
ENDORSEMENT OF THE TRANSFEROR OF THIS CERTIFICATE.
NORTHROP GRUMMAN CORPORATION
7-3/4% DEBENTURE DUE 2031
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 on February 15, 2031 and to pay
interest thereon from February 27, 2001 or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on
February 15 and August 15 in each year, commencing August 15, 2001 at the rate
of 7-3/4% per annum, until the principal
D-2
hereof is paid or made available for payment; provided, that in the event of a
--------
Non-Registration Event (as defined in the Registration Rights Agreement dated as
of February 27, 2001 by and among the Company and the initial purchasers
identified therein) with respect to the Securities of this series, additional
interest will accrue on such Securities at an annual rate of .25% for the first
90-day period immediately following the occurrence of a Non-Registration Event,
and such annual rate will increase by an additional .25% with respect to each
subsequent 90-day period until all Non-Registration Events have been cured, up
to a maximum additional annual interest rate of 1.0%. The additional interest
will accrue from and including the date on which any such Non-Registration Event
shall occur to but excluding the date on which all such Non-Registration Events
have been cured. The Company will pay such additional interest on each Interest
Payment Date. Such additional interest will be in addition to any other interest
payable from time to time with respect to the Securities of this series.
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 February 1 or August 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and any such
interest on this Security will be made in immediately available funds at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, the City of New York in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payment of
interest may be made by wire transfer in immediately available funds 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.
D-3
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
[SIGNATURE PAGE FOLLOWS]
D-4
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: _________, 2001
NORTHROP GRUMMAN CORPORATION
By ___________________________________
Albert F. Myers
Corporate Vice President and Treasurer
Attest:
[SEAL] By ___________________________________
John H. Mullan
Corporate Vice President and Secretary
This is one of the Securities of the series designated on the face
hereof referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, As Trustee
By _________________________________
Authorized Officer
D-5
[REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of October 15, 1994 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank, 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. The Securities are
unsecured general obligations of the Company.
The Securities of this series are subject to redemption upon not less
than 30 days notice by mail, as a whole or in part, at the election of the
Company at a Redemption Price equal to the greater of (a) the principal amount
of the Securities being redeemed plus accrued and unpaid interest to the
Redemption Date or (2) the Make-Whole Amount for the Securities being redeemed.
As used in this Security:
"Adjusted Treasury Rate" means, with respect to any Redemption
Date, (i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15 (519)" or any successor publication
which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months before or
after the remaining term of the Securities being redeemed, yields for the
two published maturities most closely corresponding to the Comparable
Treasury Issue shall be determined and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or
does not contain such yields, the rate per year equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury
Price for such Redemption Date, in each case calculated on the third
Business Day preceding the Redemption Date, plus .30%.
D-6
"Comparable Treasury Issue" means the United States Treasury
security selected by the Quotation Agent as having a maturity comparable to
the remaining term from the Redemption Date to the Stated Maturity of the
principal amount of the Securities being redeemed that would be utilized,
at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of this Security.
"Comparable Treasury Price" means, with respect to any Redemption
Date, if clause (ii) of the Adjusted Treasury Rate is applicable, the
average of three, or such lesser number as is obtained by the Trustee,
Reference Treasury Dealer Quotations for such Redemption Date.
"Make Whole Amount" means the sum, as determined by a Quotation
Agent, of the present values of the principal amount of the Securities to
be redeemed, together with scheduled payments of interest (exclusive of
interest to the Redemption Rate) from the Redemption Date to the Stated
Maturity of the principal amount of the Securities being redeemed, in each
case discounted to the Redemption Date on a semi-annual basis, assuming a
360-day year consisting of twelve 30-day months, at the Adjusted Treasury
Rate, plus accrued interest on the principal amount of the Securities being
redeemed to the Redemption Date.
"Quotation Agent" means the Reference Treasury Dealer selected by
the Trustee after consultation with the Company.
"Reference Treasury Dealer" means any of Chase Securities Inc.
and Credit Suisse First Boston Corporation, and their respective successors
and assigns, and one other nationally recognized investment banking firm
selected by the Company that is a primary U.S. Government securities
dealer.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue, expressed in each case as a percentage of its principal
amount, quoted in writing to the Trustee by such Reference Treasury Dealer
at 5:00 p.m., New York City time, on the third Business Day preceding such
Redemption Date.
In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and Events
of Default with
D-7
respect to this Security, in each case upon compliance with certain conditions
set forth in the Indenture.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any premium or
interest hereon on or after the respective due dates expressed herein.
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.
D-8
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.
D-9