EXHIBIT 5
NORTHROP GRUMMAN CORPORATION
AND
JPMORGAN CHASE BANK,
AS PURCHASE CONTRACT AGENT
PURCHASE CONTRACT AGREEMENT
Dated of November ___, 2001
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION................................................................1
SECTION 1.1 DEFINITIONS........................................1
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS..............17
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO AGENT..............18
SECTION 1.4 ACTS OF HOLDERS; RECORD DATES.....................19
SECTION 1.5 NOTICES...........................................21
SECTION 1.6 NOTICE TO HOLDERS; WAIVER.........................22
SECTION 1.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS..........23
SECTION 1.8 SUCCESSORS AND ASSIGNS............................23
SECTION 1.9 SEPARABILITY CLAUSE...............................23
SECTION 1.10 BENEFITS OF AGREEMENT.............................23
SECTION 1.11 GOVERNING LAW.....................................23
SECTION 1.12 LEGAL HOLIDAYS....................................23
SECTION 1.13 COUNTERPARTS......................................24
SECTION 1.14 INSPECTION OF AGREEMENT...........................24
ARTICLE II. CERTIFICATE FORMS.............................................25
SECTION 2.1 FORMS OF CERTIFICATES GENERALLY...................25
SECTION 2.2 FORM OF AGENT'S CERTIFICATE OF
AUTHENTICATION....................................26
ARTICLE III. THE UNITS....................................................26
SECTION 3.1 TITLE AND TERMS; DENOMINATIONS....................26
SECTION 3.2 RIGHTS AND OBLIGATIONS EVIDENCED BY THE
CERTIFICATES......................................27
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND
DATING............................................28
SECTION 3.4 TEMPORARY CERTIFICATES............................29
SECTION 3.5 REGISTRATION; REGISTRATION OF TRANSFER AND
EXCHANGE..........................................30
SECTION 3.6 BOOK-ENTRY INTERESTS..............................32
SECTION 3.7 NOTICES TO HOLDERS................................33
SECTION 3.8 APPOINTMENT OF SUCCESSOR CLEARING AGENCY..........33
SECTION 3.9 DEFINITIVE CERTIFICATES...........................33
SECTION 3.10 MUTILATED, DESTROYED, LOST AND STOLEN
CERTIFICATES......................................34
SECTION 3.11 PERSONS DEEMED OWNERS.............................35
SECTION 3.12 CANCELLATION......................................36
SECTION 3.13 ESTABLISHMENT OF STRIPPED UNITS...................37
SECTION 3.14 REESTABLISHMENT OF NORMAL UNITS...................39
SECTION 3.15 TRANSFER OF COLLATERAL UPON OCCURRENCE OF
-i-
TERMINATION EVENT.................................41
SECTION 3.16 NO CONSENT TO ASSUMPTION..........................42
ARTICLE IV. THE NOTES.....................................................42
SECTION 4.1 PAYMENT OF INTEREST; RIGHTS TO INTEREST
PAYMENTS PRESERVED; NOTICE........................42
SECTION 4.2 NOTICE AND VOTING.................................44
SECTION 4.3 TAX EVENT REDEMPTION..............................44
ARTICLE V. THE PURCHASE CONTRACTS; THE REMARKETING........................45
SECTION 5.1 PURCHASE OF SHARES OF COMMON STOCK................45
SECTION 5.2 CONTRACT ADJUSTMENT PAYMENTS......................48
SECTION 5.3 DEFERRAL OF CONTRACT ADJUSTMENT PAYMENTS..........50
SECTION 5.4 PAYMENT OF PURCHASE PRICE: REMARKETING............52
SECTION 5.5 ISSUANCE OF SHARES OF COMMON STOCK................59
SECTION 5.6 ADJUSTMENT OF SETTLEMENT RATE.....................60
SECTION 5.7 NOTICE OF ADJUSTMENTS AND CERTAIN OTHER
EVENTS............................................69
SECTION 5.8 TERMINATION EVENT; NOTICE.........................70
SECTION 5.9 EARLY SETTLEMENT..................................71
SECTION 5.10 EARLY SETTLEMENT UPON MERGER......................73
SECTION 5.11 CHARGES AND TAXES.................................75
SECTION 5.12 NO FRACTIONAL SHARES..............................76
ARTICLE VI. REMEDIES......................................................76
SECTION 6.1 UNCONDITIONAL RIGHT OF HOLDERS TO PURCHASE
COMMON STOCK......................................76
SECTION 6.2 RESTORATION OF RIGHTS AND REMEDIES................77
SECTION 6.3 RIGHTS AND REMEDIES CUMULATIVE....................77
SECTION 6.4 DELAY OR OMISSION NOT WAIVER......................77
SECTION 6.5 UNDERTAKING FOR COSTS.............................77
SECTION 6.6 WAIVER OF STAY OR EXTENSION LAWS..................78
ARTICLE VII. THE AGENT....................................................78
SECTION 7.1 CERTAIN DUTIES, RIGHTS AND IMMUNITIES.............78
SECTION 7.2 NOTICE OF DEFAULT.................................81
SECTION 7.3 CERTAIN RIGHTS OF AGENT...........................81
SECTION 7.4 NOT RESPONSIBLE FOR RECITALS, ETC.................82
SECTION 7.5 MAY HOLD UNITS AND OTHER DEALINGS.................83
SECTION 7.6 MONEY HELD IN CUSTODY.............................83
SECTION 7.7 COMPENSATION AND REIMBURSEMENT....................83
SECTION 7.8 CORPORATE AGENT REQUIRED; ELIGIBILITY.............84
SECTION 7.9 RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR.........................................85
SECTION 7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR............86
SECTION 7.11 MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS............................87
-ii-
SECTION 7.12 PRESERVATION OF INFORMATION; COMMUNICATIONS
TO HOLDERS........................................87
SECTION 7.13 FAILURE TO ACT....................................88
SECTION 7.14 NO OBLIGATIONS OF AGENT...........................88
SECTION 7.15 TAX COMPLIANCE....................................89
ARTICLE VIII. SUPPLEMENTAL AGREEMENTS.....................................89
SECTION 8.1 SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF
HOLDERS...........................................89
SECTION 8.2 SUPPLEMENTAL AGREEMENTS WITH CONSENT OF
HOLDERS...........................................90
SECTION 8.3 EXECUTION OF SUPPLEMENTAL AGREEMENTS..............92
SECTION 8.4 EFFECT OF SUPPLEMENTAL AGREEMENTS.................92
SECTION 8.5 REFERENCE TO SUPPLEMENTAL AGREEMENTS..............92
ARTICLE IX. CONSOLIDATION, MERGER, SALE OR CONVEYANCE.....................93
SECTION 9.1 COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR
CONVEY PROPERTY EXCEPT UNDER CERTAIN
CONDITIONS........................................93
SECTION 9.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION.
.................................................93
SECTION 9.3 OPINION OF COUNSEL GIVEN TO AGENT.................94
ARTICLE X. COVENANTS......................................................95
SECTION 10.1 PERFORMANCE UNDER PURCHASE CONTRACTS..............95
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY...................95
SECTION 10.3 COMPANY TO RESERVE COMMON STOCK...................96
SECTION 10.4 COVENANTS AS TO COMMON STOCK......................96
SECTION 10.5 STATEMENTS OF OFFICER OF THE COMPANY AS TO
DEFAULT...........................................96
-iii-
PURCHASE CONTRACT AGREEMENT, dated as of November
___, 2001, between Northrop Grumman Corporation, a Delaware
corporation (the "Company"), and JPMorgan Chase Bank, a New
York banking corporation, acting as purchase contract agent for
the Holders of Units from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and
delivery of this Agreement and the Certificates evidencing the
Units.
All things necessary to make the Purchase Contracts,
when the Certificates are executed by the Company and
authenticated, executed on behalf of the Holders and delivered
by the Agent, as provided in this Agreement, the valid
obligations of the Company, and to constitute this Agreement a
valid agreement of the Company, in accordance with its terms,
have been done.
WITNESSETH:
For and in consideration of the premises and the
purchase of the Units by the Holders thereof, it is mutually
agreed as follows:
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS.
For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the
meanings assigned to them in this Article and include the
plural as well as the singular, and nouns and pronouns of
the masculine gender include the feminine and neuter
genders;
(b) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance
with generally accepted accounting principles in the
United States;
-1-
(c) the words "herein," "hereof" and
"hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(d) the following terms have the meanings given
to them in this Section 1.1(d):
"Act" when used with respect to any Holder, has the
meaning specified in Section 1.4.
"Affiliate" has the same meaning as given to that
term in Rule 405 of the Securities Act or any successor rule
thereunder.
"Agent" means the Person named as the "Agent" in the
first paragraph of this instrument until a successor Agent
shall have become such pursuant to the applicable provisions of
this Agreement, and thereafter "Agent" shall mean such Person.
"Agent-purchased Treasury Consideration" has the
meaning specified in Section 5.4(b)(i).
"Agreement" means this instrument as originally
executed or as it may from time to time be supplemented or
amended by one or more agreements supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified
in Section 5.1.
"Applicable Ownership Interest" means, with respect
to a Normal Unit and the Treasury Securities in the Treasury
Portfolio, (A) a 1/10, or 10.0%, undivided beneficial ownership
interest in a $1,000 principal or interest amount of a
principal or interest strip in a U.S. Treasury security
included in such Treasury Portfolio which matures on or prior
to ____________, 2004 and (B) for the scheduled interest
Payment Date on the Notes that occurs on the Stock Purchase
Date, in the case of a successful remarketing, or for each
scheduled interest Payment Date on the Notes that occurs after
the Tax Event Redemption Date and on or before the Stock
Purchase Date, in the case of a Tax Event Redemption, a 10.0%
undivided beneficial ownership interest in a $1,000 principal
or interest amount of a principal or interest strip in a U.S.
Treasury security included in the Treasury Portfolio that
matures on or prior to that interest Payment Date or Dates.
"Applicants" has the meaning specified in
Section 7.12(b).
-2-
"Bankruptcy Code" means Title 11 of the United States
Code, or any other law of the United States that from time to
time provides a uniform system of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-
Entry Interest, a Person who is the beneficial owner of such
Book-Entry Interest as reflected on the books of the Clearing
Agency or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant
or as an indirect participant, in each case in accordance with
the rules of such Clearing Agency).
"Board of Directors" means either the Board of
Directors of the Company or the Executive Committee of such
Board or any other committee of such Board duly authorized to
act generally or in any particular respect for such Board
hereunder [or any officer of the Company to whom such authority
has been duly delegated by such Board or such committee, it
being understood that any action taken by such officer pursuant
to the authority so delegated shall, for all purposes
hereunder, be deemed to have the same validity and effect as if
it had been taken by such Board or such committee, as the case
may be].
"Board Resolution" means (i) a copy of a resolution
certified by the Secretary or the Assistant Secretary of the
Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such
certification, (ii) a copy of a unanimous written consent of
the Board of Directors or (iii) a certificate signed by the
authorized officer or officers to whom the Board of Directors
has delegated its authority, and in each case, delivered to the
Agent.
"Book-Entry Interest" means a beneficial interest in
a Global Certificate, ownership and transfers of which shall be
maintained and made through book entries by a Clearing Agency
as described in Section 3.6.
"Business Day" means any day other than a Saturday,
Sunday or any other day on which banking institutions and trust
companies in The State of New York or at a place of payment are
authorized or required by law, regulation or executive order to
be closed.
"Capital Stock" means any and all shares, interests,
rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated, whether
voting or non-voting) corporate stock or similar interests in
other types of entities.
-3-
"Cash Merger" has the meaning set forth in
Section 5.10.
"Cash Settlement" has the meaning set forth in
Section 5.4(a).
"Certificate" means a Normal Units Certificate or a
Stripped Units Certificate.
"Clearing Agency" means an organization registered as
a "Clearing Agency" pursuant to Section 17A of the Exchange Act
that is acting as a depositary for the Units and in whose name,
or in the name of a nominee of that organization, shall be
registered a Global Certificate and which shall undertake to
effect book-entry transfers and pledges of the Units.
"Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other Person for whom from
time to time the Clearing Agency effects book-entry transfers
and pledges of securities deposited with the Clearing Agency.
"Closing Price" has the meaning specified in
Section 5.1.
"Collateral" has the meaning specified in Section 2.1
of the Pledge Agreement.
"Collateral Agent" means The Bank of New York, a New
York banking corporation, as Collateral Agent under the Pledge
Agreement until a successor Collateral Agent shall have become
such pursuant to the applicable provisions of the Pledge
Agreement, and thereafter "Collateral Agent" shall mean the
Person who is then the Collateral Agent thereunder.
"Collateral Substitution" has the meaning specified
in Section 3.13.
"Common Stock" means the Common Stock, par value
$1.00 per share, of the Company.
"Company" means the Person named as the "Company" in
the first paragraph of this instrument until a successor shall
have become such pursuant to the applicable provision of this
Agreement, and thereafter "Company" shall mean such successor.
"Constituent Person" has the meaning specified in
Section 5.6(b).
"Contract Adjustment Payments" means, in the case of
Normal Units and Stripped Units, the amount payable by the
Company in respect of each Purchase Contract constituting a
-4-
part of such Unit, equal to __% per year of the Stated Amount,
in each case computed on the basis of a 360-day year of twelve
30-day months, plus any Deferred Contract Adjustment Payments
accrued pursuant to Section 5.3.
"Corporate Trust Office" means the office of the
Agent at which, at any particular time, its corporate trust
business shall be principally administered, which office at the
date hereof is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇.
"Coupon Rate" means the percentage rate per annum at
which each Note will bear interest initially.
"Current Market Price" has the meaning specified in
Section 5.6(a)(8).
"Custodial Agent" means The Bank of New York, a New
York banking corporation, as Custodial Agent under the Pledge
Agreement until a successor Custodial Agent shall have become
such pursuant to the applicable provisions of the Pledge
Agreement, and thereafter "Custodial Agent" shall mean the
Person who is then the Custodial Agent thereunder.
"Deferred Contract Adjustment Payments" has the
meaning specified in Section 5.3.
"Depositary" means, initially, DTC, until another
Clearing Agency becomes its successor.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Early Settlement" has the meaning specified in
Section 5.9(a).
"Early Settlement Amount" has the meaning specified
in Section 5.9(a).
"Early Settlement Date" has the meaning specified in
Section 5.9(a).
"Early Settlement Rate" has the meaning specified in
Section 5.9(b).
"Exchange Act" means the Securities Exchange Act of
1934 and any statute successor thereto, in each case as amended
from time to time, and the rules and regulations promulgated
thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
-5-
"Expiration Time" has the meaning specified in
Section 5.6(a)(6).
"Failed Remarketing" has the meaning specified in
Section 5.4(b)(ii).
"Fair Market Value" with respect to securities
distributed in a Spin-Off means (a) in the case of any Spin-Off
that is effected simultaneously with an initial public offering
of such securities, the initial public offering price of those
securities, and (b) in the case of any other Spin-Off, the
average of the Sale Prices of those securities over the first
10 Trading Days after the effective date of such Spin-Off.
"Global Certificate" means a Certificate that
evidences all or part of the Units and is registered in the
name of a Depositary or a nominee thereof.
"Holder" means the Person in whose name the Unit
evidenced by a Normal Units Certificate and/or a Stripped Units
Certificate is registered in the related Normal Units Register
and/or the Stripped Units Register, as the case may be.
"Indenture" means the Indenture, dated as of ___,
2001, between the Company and the Trustee as supplemented by
any officers' certificate or supplemental indenture.
"Issuer Order" or "Issuer Request" means a written
order or request signed in the name of the Company by the Chief
Executive Officer, the Chief Financial Officer, the President,
any Vice-President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary (or other officer
performing similar functions) of the Company and delivered to
the Agent.
"Last Failed Remarketing" has the meaning specified
in Section 5.4(b)(ii).
"Merger Early Settlement" has the meaning specified
in Section 5.10.
"Merger Early Settlement Amount" has the meaning
specified in Section 5.10.
"Merger Early Settlement Date" has the meaning
specified in Section 5.10.
"Non-electing Share" has the meaning specified in
Section 5.6(b).
-6-
"Normal Unit" means the collective rights and
obligations of a Holder of a Normal Units Certificate in
respect of a Note or the appropriate Treasury Consideration or
Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, subject in each case to the Pledge thereof, and
the related Purchase Contract.
"Normal Units Certificate" means a certificate
evidencing the rights and obligations of a Holder in respect of
the number of Normal Units specified on such certificate,
substantially in the form of Exhibit A hereto.
"Normal Units Register" and "Normal Units Registrar"
have the respective meanings specified in Section 3.5.
"Notes" means the series of senior debt securities of
the Company designated the ___ % Senior Notes due 2006, to be
issued under the Indenture, dated as of November __, 2001,
between the Company and JPMorgan Chase Bank, as trustee.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by
the Chief Executive Officer, the Chief Financial Officer, the
President, any Vice- President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary (or other
officer performing similar functions) of the Company and
delivered to the Agent.
"Opinion of Counsel" means an opinion in writing
signed by legal counsel, who may be an employee of or counsel
to the Company or an Affiliate and who shall be reasonably
acceptable to the Agent.
"Opt-out Treasury Consideration" has the meaning
specified in Section 5.4(b)(iv).
"Outstanding Units" means, as of the date of
determination, all Normal Units or Stripped Units evidenced by
Certificates theretofore authenticated, executed and delivered
under this Agreement, except:
(i) If a Termination Event has
occurred, (A) Stripped Units and (B) Normal Units for
which the related Note or the appropriate Treasury
Consideration or Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, has been
theretofore deposited with the Agent in trust for the
Holders of such Normal Units;
(ii) Normal Units and Stripped Units
evidenced by Certificates theretofore cancelled by
-7-
the Agent or delivered to the Agent for cancellation
or deemed cancelled pursuant to the provisions of
this Agreement; and
(iii) Normal Units and Stripped Units
evidenced by Certificates in exchange for or in lieu
of which other Certificates have been authenticated,
executed on behalf of the Holder and delivered
pursuant to this Agreement, other than any such
Certificate in respect of which there shall have been
presented to the Agent proof satisfactory to it that
such Certificate is held by a bona fide purchaser in
whose hands the Normal Units or Stripped Units
evidenced by such Certificate are valid obligations
of the Company;
provided, that in determining whether the Holders of the
requisite number of the Normal Units or Stripped Units have
given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Normal Units or Stripped Units
owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be outstanding, except that, in
determining whether the Agent shall be protected in relying
upon any such request, demand, authorization, direction,
notice, consent or waiver, only Normal Units or Stripped Units
which a Responsible Officer of the Agent knows to be so owned
shall be so disregarded. Normal Units or Stripped Units so
owned which have been pledged in good faith may be regarded as
Outstanding Units if the pledgee establishes to the
satisfaction of the Agent the pledgee's right so to act with
respect to such Normal Units or Stripped Units and that the
pledgee is not the Company or any Affiliate of the Company.
"Payment Date" means each ___, ___, ___ and ___,
commencing ___, 2002.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pledge" means the pledge under the Pledge Agreement
of the Notes, the Treasury Securities or the appropriate
Treasury Consideration or Applicable Ownership Interest in the
Treasury Portfolio, in each case constituting a part of the
Units, property, cash, securities, financial assets and
security entitlements of the Collateral Account (as defined in
the Pledge Agreement) and any proceeds of any of the foregoing.
"Pledge Agreement" means the Pledge Agreement, dated
as of the date hereof, by and among the Company, the Collateral
-8-
Agent, the Custodial Agent, the Securities Intermediary and the
Agent, on its own behalf and as attorney-in-fact for the
Holders from time to time of the Units.
"Pledged Applicable Ownership Interest in the
Treasury Portfolio" has the meaning set forth in Section 2.1(c)
of the Pledge Agreement.
"Pledged Notes" has the meaning set forth in Section
2.1(c) of the Pledge Agreement.
"Pledged Treasury Consideration" has the meaning set
forth in Section 2.1(c) of the Pledge Agreement.
"Pledged Treasury Securities" has the meaning set
forth in Section 2.1(c) of the Pledge Agreement.
"Predecessor Certificate" means a Predecessor Normal
Units Certificate or a Predecessor Stripped Units Certificate.
"Predecessor Normal Units Certificate" of any
particular Normal Units Certificate means every previous Normal
Units Certificate evidencing all or a portion of the rights and
obligations of the Company and the Holder under the Normal
Units evidenced thereby; and, for the purposes of this
definition, any Normal Units Certificate authenticated and
delivered under Section 3.10 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Normal Units Certificate
shall be deemed to evidence the same rights and obligations of
the Company and the Holder as the mutilated, destroyed, lost or
stolen Normal Units Certificate.
"Predecessor Stripped Units Certificate" of any
particular Stripped Units Certificate means every previous
Stripped Units Certificate evidencing all or a portion of the
rights and obligations of the Company and the Holder under the
Stripped Units evidenced thereby; and, for the purposes of this
definition, any Stripped Units Certificate authenticated and
delivered under Section 3.10 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Stripped Units Certificate
shall be deemed to evidence the same rights and obligations of
the Company and the Holder as the mutilated, destroyed, lost or
stolen Stripped Units Certificate.
"Purchase Contract," when used with respect to any
Unit, means the contract forming a part of such Unit and
obligating the Company to sell and the Holder of such Unit to
purchase Common Stock on the terms and subject to the
conditions set forth in Article Five.
-9-
"Purchase Contract Settlement Fund" has the meaning
specified in Section 5.5.
"Purchase Price" has the meaning specified in
Section 5.1.
"Purchased Shares" has the meaning specified in
Section 5.6(a)(6).
"Quotation Agent" means ▇.▇. ▇▇▇▇▇▇ Securities Inc.
or ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., or any of their successors or any
other primary U.S. government securities dealer in New York
City selected by the Company.
"Record Date" for the distribution payable on any
Payment Date means, as to any Global Certificate, the Business
Day next preceding such Payment Date, and as to any other
Certificate, the 15th day preceding such Payment Date.
["Redemption Amount" means, for each Note, the
product of (i) the principal amount of such Note and (ii) a
fraction whose numerator is the applicable Treasury Portfolio
Purchase Price and whose denominator is the applicable Tax
Event Redemption Principal Amount.]
"Redemption Price" means the redemption price per
Note equal to the Redemption Amount plus any accrued and unpaid
interest on such Note to the date of redemption.
"Register" means the Normal Units Register and the
Stripped Units Register, as applicable.
"Registrar" means the Normal Units Registrar and the
Stripped Units Registrar, as applicable.
"Remarketing Agent" has the meaning specified in
Section 5.4(b)(i).
"Remarketing Agreement" means the Remarketing
Agreement to be entered into by and among the Company, the
Remarketing Agent and the Agent.
"Remarketing Date" means the third business day
preceding ___, 2004.
"Remarketing Fee" has the meaning specified in
Section 5.4(b)(i).
"Remarketing Period" means the three Business Day
period either (i) beginning on the Remarketing Date and ending
after the two immediately following Business Days; (ii)
-10-
immediately preceding _______________, 2004; or (iii)
immediately preceding ____________, 2004.
"Remarketing Value" means the sum of
(i) the value at the Remarketing Date
or any Subsequent Remarketing Date, as the case may
be, of U.S. Treasury securities that will pay, on or
prior to the Payment Date falling on the Stock
Purchase Date, an amount of cash equal to the
aggregate interest payments that are scheduled to be
payable on that Payment Date, on (a) the Notes which
are included in Normal Units and are participating in
the remarketing and (b) the Separate Notes which are
to be remarketed pursuant to Section 4.5(d) of the
Pledge Agreement, assuming for that purpose that the
interest rate on the Notes is equal to the Coupon
Rate, and
(ii) the value at the Remarketing Date
or the Subsequent Remarketing Date, as the case may
be, of U.S. Treasury securities that will pay, on or
prior to the Stock Purchase Date, an amount of cash
equal to the Stated Amount (a) of such Notes that are
included in Normal Units and which are participating
in the remarketing and (b) the Separate Notes which
are to be remarketed pursuant to Section 4.5(d) of
the Pledge Agreement,
provided that for purposes of clauses (i) and (ii) above,
the Remarketing Value shall be calculated on the assumptions
that (x) the U.S. Treasury securities are highly liquid and
mature on or within 35 days prior to the Stock Purchase
Date, as determined in good faith by the Remarketing Agent
in a manner intended to minimize the cash value of the U.S.
Treasury securities, and (y) the U.S. Treasury securities
are valued based on the ask-side price of the U.S. Treasury
securities at a time between 9:00 a.m. and 11:00 a.m., New
York City time, selected by the Remarketing Agent, on the
Remarketing Date or any Subsequent Remarketing Date, as the
case may be, as determined on a third-day settlement basis
by a reasonable and customary means selected in good faith
by the Remarketing Agent, plus accrued interest to that
date.
"Reorganization Event" has the meaning specified in
Section 5.6(b).
"Responsible Officer" means, when used with respect
to the Agent, any officer within the corporate trust department
of the Agent (or any successor of the Agent), including any
-11-
Vice President, any assistant Vice President, any assistant
secretary, the treasurer, any assistant treasurer, any trust
officer, any senior trust officer or any other officer of the
Agent who customarily performs functions similar to those
performed by the Persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter
is referred because of such Person's knowledge of and
familiarity with the particular subject and who, in each of the
above cases, shall have direct responsibility for the
administration of this Agreement.
"Sale Price" of the Common Stock or any securities
distributed in a Spin-Off, as the case may be, on any Trading
Day means the closing sale price per share (or if no closing
sale price is reported, the average of the bid and ask prices
or, if more than one in either case, the average of the average
bid and the average asked prices) on such Trading Day as
reported in composite transactions for the principal U.S.
securities exchange on which the Common Stock or such
securities are traded or, if the Common Stock or such
securities are not listed on a U.S. national or regional
securities exchange, as reported by Nasdaq.
"Securities Act" means the Securities Act of 1933, as
amended.
"Securities Intermediary" means The Bank of New York,
a New York banking corporation, in its capacity as Securities
Intermediary under the Pledge Agreement, together with its
successors in such capacity.
"Separate Notes" has the meaning set forth in the
Pledge Agreement.
"Settlement Date" means any Early Settlement Date or
Merger Early Settlement Date or the Stock Purchase Date.
"Settlement Rate" has the meaning specified in
Section 5.1.
"Spin-Off" means a dividend or other distribution of
shares of Capital Stock of any class or series, or similar
equity interests, of or relating to a subsidiary or other
business unit of the Company.
"Stated Amount" means, with respect to any one Note,
Normal Unit or Stripped Unit, $100.
"Stock Purchase Date" means ___, 2004.
"Stripped Unit" means the collective rights and
-12-
obligations of a holder of a Stripped Units Certificate in
respect of a 1/10 undivided beneficial interest in a Treasury
Security, subject in each case to the Pledge thereof, and the
related Purchase Contract.
"Stripped Units Certificate" means a certificate
evidencing the rights and obligations of a Holder in respect of
the number of Stripped Units specified on such certificate,
substantially in the form of Exhibit B hereto.
"Stripped Units Register" and "Stripped Units
Registrar" have the respective meanings specified in
Section 3.5.
"Subsequent Remarketing Date" means, provided there
has been one or more Failed Remarketings, the date on which the
Remarketing Agent has consummated a successful remarketing in
accordance with Section 5.4 hereof, such date to be no later
than the Business Day immediately preceding the Stock Purchase
Date.
"Tax Event" means the receipt by the Company of an
opinion of a nationally recognized tax counsel experienced in
such matters, which may be Sheppard, Mullin, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, to the effect that there is more than an insubstantial
risk that interest payable by the Company on the Notes on the
next Payment Date would not be deductible, in whole or in part,
by the Company for United States federal income tax purposes,
as a result of (a) any amendment to, or change (including any
announced proposed change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision
or taxing authority thereof or therein affecting taxation, (b)
any amendment to or change in an official interpretation or
application of such laws or regulations by any legislative
body, court, governmental agency or regulatory authority or (c)
any official interpretation or pronouncement that provides for
a position with respect to such laws or regulations that
differs from the generally accepted position on ____________,
2001, which amendment, change or proposed change is effective
or which interpretation or pronouncement is announced on or
after ____________, 2001.
"Tax Event Redemption" means, if a Tax Event shall
occur and be continuing, the redemption of the Notes, at the
option of the Company, in whole but not in part, on not less
than 30 days nor more than 60 days' written notice.
"Tax Event Redemption Date" means the date upon which
a Tax Event Redemption is to occur.
["Tax Event Redemption Principal Amount" means in the
case of a Tax Event Redemption occurring prior to a successful
-13-
remarketing of the Notes, for each Note the product of the
principal amount of the Note and a fraction whose numerator is
the Treasury Portfolio Purchase Price and whose denominator is
the aggregate principal amount of Notes outstanding on the Tax
Event Redemption Date, and in the case of a Tax Event
Redemption Date occurring after a successful remarketing of the
Notes, the Stated Amount of the Notes.]
"Termination Date" means the date, if any, on which a
Termination Event occurs.
"Termination Event" means the occurrence of any of
the following events:
(i) at any time on or prior to the
Stock Purchase Date, a judgment, decree or court
order shall have been entered granting relief under
the Bankruptcy Code or any other similar Federal or
state law, adjudicating the Company to be insolvent,
or approving as properly filed a petition seeking
reorganization or liquidation of the Company, and,
unless such judgment, decree or order shall have been
entered within 60 days prior to the Stock Purchase
Date, such decree or order shall have continued
undischarged and unstayed for a period of 60 days;
(ii) at any time on or prior to the
Stock Purchase Date, a judgment, decree or court
order for the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of
the Company or of its property, or for the winding up
or liquidation of its affairs, shall have been
entered, and, unless such judgment, decree or order
shall have been entered within 60 days prior to the
Stock Purchase Date, such judgment, decree or order
shall have continued undischarged and unstayed for a
period of 60 days; or
(iii) at any time on or prior to the
Stock Purchase Date the Company shall file a petition
for relief under the Bankruptcy Code or any other
similar federal or state law, or shall consent to the
filing of a bankruptcy proceeding against it, or
shall file a petition or answer or consent seeking
reorganization or liquidation under the Bankruptcy
Code or any other similar federal or state law, or
shall consent to the filing of any such petition, or
shall consent to the appointment of a receiver or
liquidator or trustee or assignee in bankruptcy or
insolvency of it or of its property, or shall make an
-14-
assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts
generally as they become due.
"Threshold Appreciation Price" has the meaning
specified in Section 5.1.
"TIA" means the Trust Indenture Act of 1939, as
amended.
"Trading Day" has the meaning specified in
Section 5.1.
"Transaction Documents" has the meaning specified in
Section 7.1(a).
"Treasury Consideration" means the Agent-purchased
Treasury Consideration or the Opt-out Treasury Consideration.
"Treasury Portfolio" means: (i) if a Tax Event
Redemption occurs prior to a successful remarketing of the
Notes, a portfolio of principal or interest strips of U.S.
Treasury Securities that mature on or prior to the Stock
Purchase Date in an aggregate amount equal to the aggregate
principal amount of the Notes included in the Normal Units on
the Tax Event Redemption Date and with respect to each
scheduled interest Payment Date on the Notes that occurs after
the Tax Event Redemption Date and on or before the Stock
Purchase Date, interest or principal strips of U.S. Treasury
Securities that mature on or prior to such interest Payment
Date in an aggregate amount equal to the aggregate interest
payment that would be due on the aggregate principal amount of
the Notes on such date if the interest rate of the Notes were
not reset on the applicable Remarketing Date, and (ii) solely
for purposes of determining the Treasury Portfolio Purchase
Price in the case of a Tax Event Redemption Date occurring
prior to a successful remarketing of the Notes, a portfolio of
U.S. Treasury Securities consisting of principal or interest
strips of U.S. Treasury Securities that mature on or prior to
the Stock Purchase Date in an aggregate amount equal to the
aggregate principal amount of the Notes outstanding on the Tax
Event Redemption Date and with respect to each scheduled
interest Payment Date on the Notes that occurs after the Tax
Event Redemption Date and on or before the Stock Purchase Date,
interest or principal strips of U.S. Treasury Securities that
mature on or prior to such interest Payment Date in an
aggregate amount equal to the aggregate interest payment that
would be due on the aggregate principal amount of the Notes
outstanding on the Tax Event Redemption Date.
"Treasury Portfolio Purchase Price" means the lowest
aggregate price quoted by a primary U.S. government securities
-15-
dealer in New York City to the Quotation Agent on the third
Business Day immediately preceding the Tax Event Redemption
Date for the purchase of the Treasury Portfolio for settlement
on the Tax Event Redemption Date.
"Treasury Security" means a zero-coupon U.S. Treasury
security (CUSIP Number ___) maturing on the Stock Purchase Date
that will pay $1,000 on such maturity date.
"Trustee" means JPMorgan Chase Bank, a New York
banking corporation, as trustee under the Indenture, or any
successor thereto.
"Underwriting Agreement" means the Underwriting
Agreement relating to the Units dated November ___, 2001 among
the Company and the underwriters named therein.
"Unit" means a Normal Unit or a Stripped Unit.
"Vice-President" means any vice-president, whether or
not designated by a number or a word or words added before or
after the title "vice- president."
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided by this
Agreement, upon any application or request by the Company to
the Agent to take any action under any provision of this
Agreement, the Company shall furnish to the Agent an Officer's
Certificate stating that all conditions precedent, if any,
provided for in this Agreement relating to the proposed action
have been complied with and, if requested by the Agent, an
Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application
or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement
relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Agreement (other than the Officer's Certificate provided for in
Section 10.5) shall include:
(a) a statement that the individual signing
such certificate or opinion has read such covenant or
condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and
scope of the examination or investigation upon which the
-16-
statements or opinions contained in such certificate or
opinion are based;
(c) a statement that, in the opinion of such
individual, he or she has made such examination or
investigation as is necessary to enable such individual to
express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion
of such individual, such condition or covenant has been
complied with.
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO AGENT.
(a) In any case where several matters are
required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or
covered by only one document, but one such Person may
certify or give an opinion with respect to some matters
and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to
such matters in one or several documents.
(b) Any certificate or opinion of an officer of
the Company may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based
are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by,
an officer or officers of the Company stating that the
information with respect to such factual matters is in the
possession of the Company unless such counsel knows, or in
the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Agreement,
they may, but need not, be consolidated and form one
instrument.
-17-
SECTION 1.4 ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization,
direction, notice, consent, waiver or other action
provided by this Agreement to be given or taken by Holders
may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such
Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or
instruments are delivered to the Agent and, where it is
hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient
for any purpose of this Agreement and (subject to
Section 7.1) conclusive in favor of the Agent and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any
Person of any such instrument or writing may be proved in
any manner which the Agent deems sufficient.
(c) The ownership of Units shall be proved by
the Normal Units Register or the Stripped Units Register,
as the case may be.
(d) Any request, demand, authorization,
direction, notice, consent, waiver or other Act of the
Holder of any Certificate shall bind every future Holder
of the same Certificate and the Holder of every
Certificate issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done
by the Agent or the Company in reliance thereon, whether
or not notation of such action is made upon such
Certificate.
(e) The Company may set any day as a record
date for the purpose of determining the Holders of
Outstanding Units entitled to give, make or take any
request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by
this Agreement to be given, made or taken by Holders of
Units. If any record date is set pursuant to this
paragraph, the Holders of the Outstanding Normal Units and
the Outstanding Stripped Units, as the case may be, on
such record date, and no other Holders, shall be entitled
to take the relevant action with respect to the Normal
-18-
Units or the Stripped Units, as the case may be, whether
or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder
unless taken on or prior to the applicable Expiration Date
by Holders of the requisite number of Outstanding Units on
such record date. Nothing in this paragraph shall be
construed to prevent the Company from setting a new record
date for any action for which a record date has previously
been set pursuant to this paragraph (whereupon the record
date previously set shall automatically and with no action
by any Person be cancelled and of no effect), and nothing
in this paragraph shall be construed to render ineffective
any action taken by Holders of the requisite number of
Outstanding Units on the date such action is taken.
Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause
notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the
Agent in writing and to each Holder of Units in the manner
set forth in Section 1.6.
(f) With respect to any record date set
pursuant to this Section, the Company may designate any
date as the "Expiration Date" and from time to time may
change the Expiration Date to any earlier or later day;
provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the
Agent in writing, and to each Holder of Units in the
manner set forth in Section 1.6, on or prior to the
existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to
this Section, the Company shall be deemed to have
initially designated the 180th day after such record date
as the Expiration Date with respect thereto, subject to
its right to change the Expiration Date as provided in
this paragraph. Notwithstanding the foregoing, no
Expiration Date shall be later than the 180th day after
the applicable record date.
SECTION 1.5 NOTICES.
Any request, demand, authorization, direction,
notice, consent, waiver or Act of Holders or other document
provided or permitted by this Agreement to be made upon, given
or furnished to, or filed with:
(a) the Agent by any Holder or by the Company
shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given,
furnished or filed in writing and personally delivered,
mailed, first-class postage prepaid, telecopied or
-19-
delivered by overnight air courier guaranteeing next day
delivery, to the Agent at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Institutional Trust Services,
telecopy: ▇▇▇-▇▇▇-▇▇▇▇, or at any other address furnished
in writing by the Agent to the Holders and the Company; or
(b) the Company by the Agent or by any Holder
shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given,
furnished or filed in writing and personally delivered,
mailed, first-class postage prepaid, telecopied or
delivered by overnight air courier guaranteeing next day
delivery, to the Company at Northrop Grumman Corporation,
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Secretary, or at any other address furnished in writing to
the Agent by the Company; or
(c) the Collateral Agent by the Agent, the
Company or any Holder shall be sufficient for every
purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing
and personally delivered, mailed, first-class postage
prepaid, telecopied or delivered by overnight air courier
guaranteeing next day delivery, addressed to the
Collateral Agent at ______________________, Attention:
___, telecopy: ___, or at any other address furnished in
writing by the Collateral Agent to the Agent, the Company
and the Holders; or
(d) the Trustee by the Company shall be
sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or
filed in writing and personally delivered, mailed, first-
class postage prepaid, telecopied or delivered by
overnight air courier guaranteeing next day delivery,
addressed to the Trustee at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Institutional Trust
Services, telecopy: ▇▇▇-▇▇▇-▇▇▇▇ or at any other address
furnished in writing by the Trustee to the Company.
SECTION 1.6 NOTICE TO HOLDERS; WAIVER.
(a) Where this Agreement provides for notice to
Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at its address as it
appears in the applicable Register, not later than the
latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the
-20-
failure to mail such notice, nor any defect in any notice
so mailed to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders.
Where this Agreement provides for notice in any manner,
such notice may be waived in writing by the Person
entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with
the Agent, but such filing shall not be a condition
precedent to the validity of any action taken in reliance
upon such waiver.
(b) In case by reason of the suspension of
regular mail service or by reason of any other cause it
shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of
the Agent shall constitute a sufficient notification for
every purpose hereunder.
SECTION 1.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table
of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 1.8 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Agreement by the
Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.9 SEPARABILITY CLAUSE.
In case any provision in this Agreement or in the
Units shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions hereof
and thereof shall not in any way be affected or impaired
thereby.
SECTION 1.10 BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Units, express or
implied, shall give to any Person, other than the parties
hereto and their successors hereunder and, to the extent
provided hereby, the Holders, any benefits or any legal or
equitable right, remedy or claim under this Agreement. The
Holders from time to time shall be beneficiaries of this
Agreement and shall be bound by all of the terms and conditions
hereof and of the Units evidenced by their Certificates by
their acceptance of delivery of such Certificates.
-21-
SECTION 1.11 GOVERNING LAW.
This Agreement and the Units shall be governed by and
construed in accordance with the laws of the State of New York,
without regard to its principles of conflicts of laws.
SECTION 1.12 LEGAL HOLIDAYS.
(a) In any case where any Payment Date shall
not be a Business Day, then (notwithstanding any other
provision of this Agreement or the Normal Units
Certificates) payments on the Notes shall not be made on
such date, but such payments shall be made on the next
succeeding Business Day with the same force and effect as
if made on such Payment Date, provided that no interest
shall accrue or be payable by the Company for the period
from and after any such Payment Date, except that if such
next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made on the
immediately preceding Business Day with the same force and
effect as if made on such Payment Date.
(b) If any date on which Contract Adjustment
Payments are to be made on the Purchase Contracts is not a
Business Day, then payment of the Contract Adjustment
Payments payable on that date will be made on the next
succeeding day which is a Business Day, and no interest or
additional payment will be paid in respect of the delay.
However, if that Business Day is in the next succeeding
calendar year, the payment will be made on the immediately
preceding Business Day with the same force and effect as
if made on that Payment Date.
(c) In any case where the Stock Purchase Date
shall not be a Business Day, then (notwithstanding any
other provision of this Agreement or the Certificates),
the Purchase Contracts shall not be performed on such
date, but the Purchase Contracts shall be performed on the
immediately following Business Day with the same force and
effect as if performed on the Stock Purchase Date.
SECTION 1.13 COUNTERPARTS.
This Agreement may be executed in any number of
counterparts by the parties hereto, each of which, when so
executed and delivered, shall be deemed an original, but all
such counterparts shall together constitute one and the same
instrument.
-22-
SECTION 1.14 INSPECTION OF AGREEMENT.
A copy of this Agreement shall be available at all
reasonable times during normal business hours at the Corporate
Trust Office for inspection by any Holder.
ARTICLE II.
CERTIFICATE FORMS
SECTION 2.1 FORMS OF CERTIFICATES GENERALLY.
(a) The Normal Units Certificates (including
the form of Purchase Contract forming part of the Normal
Units evidenced thereby) shall be in substantially the
form set forth in Exhibit A hereto, with such letters,
numbers or other marks of identification or designation
and such legends or endorsements printed, lithographed or
engraved thereon as may be required by the rules of any
securities exchange or quotation system on which the
Normal Units are listed or quoted for trading or any
depositary therefor, or as may, consistently herewith, be
determined by the officers of the Company executing such
Normal Units Certificates, as evidenced by their execution
of the Normal Units Certificates.
(b) The definitive Normal Units Certificates
shall be printed, lithographed or engraved on steel
engraved borders or may be produced in any other manner,
all as determined by the officers of the Company executing
such Normal Units Certificates, consistent with the
provisions of this Agreement, as evidenced by their
execution thereof.
(c) The Stripped Units Certificates (including
the form of Purchase Contracts forming part of the
Stripped Units evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with
such letters, numbers or other marks of identification or
designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the
rules of any securities exchange or the quotation system
on which the Stripped Units may be listed or quoted for
trading or any depositary therefor, or as may,
consistently herewith, be determined by the officers of
the Company executing such Stripped Units Certificates, as
evidenced by their execution of the Stripped Units
Certificates.
(d) The definitive Stripped Units Certificates
shall be printed, lithographed or engraved on steel
engraved borders or may be produced in any other manner,
-23-
all as determined by the officers of the Company executing
such Stripped Units Certificates, consistent with the
provisions of this Agreement, as evidenced by their
execution thereof.
(e) Every Global Certificate authenticated,
executed on behalf of the Holders and delivered hereunder
shall bear a legend in substantially the following form:
"THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED)
AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO
TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT."
SECTION 2.2 FORM OF AGENT'S CERTIFICATE OF
AUTHENTICATION.
(a) The form of the Agent's certificate of
authentication of the Normal Units shall be in
substantially the form set forth on the form of the Normal
Units Certificates.
(b) The form of the Agent's certificate of
authentication of the Stripped Units shall be in
substantially the form set forth on the form of the
Stripped Units Certificates.
ARTICLE III.
THE UNITS
SECTION 3.1 TITLE AND TERMS; DENOMINATIONS.
(a) The aggregate number of Normal Units and
Stripped Units, if any, evidenced by Certificates
authenticated, executed on behalf of the Holders and
delivered hereunder is limited to _________ (_________ if
the Underwriters' (as defined in the Underwriting
Agreement) over-allotment option pursuant to the
Underwriting Agreement is exercised in full), except for
Certificates authenticated, executed and delivered upon
registration of transfer of, in exchange for, or in lieu
of, other Certificates pursuant to Section 3.4, 3.5, 3.10,
3.13, 3.14, 5.9, 5.10 or 8.5.
(b) The Certificates shall be issuable only in
registered form and only in denominations of a single Unit
and any integral multiple thereof.
-24-
SECTION 3.2 RIGHTS AND OBLIGATIONS EVIDENCED BY THE
CERTIFICATES.
(a) Each Normal Units Certificate shall
evidence the number of Normal Units specified therein,
with each such Normal Unit representing the ownership by
the Holder thereof of a beneficial interest in a Note or
the appropriate Treasury Consideration or Applicable
Ownership Interest in the Treasury Portfolio, as the case
may be, subject to the Pledge of such Note or such
Treasury Consideration or Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, by such Holder
pursuant to the Pledge Agreement, and the rights and
obligations of the Holder thereof and the Company under
one Purchase Contract. The Agent as attorney- in-fact
for, and on behalf of, the Holder of each Normal Unit
shall pledge, pursuant to the Pledge Agreement, the Note
or the appropriate Treasury Consideration or Applicable
Ownership Interest in the Treasury Portfolio, as the case
may be, forming a part of such Normal Unit, to the
Collateral Agent and grant to the Collateral Agent a
security interest in the right, title, and interest of
such Holder in such Note or such Treasury Consideration or
Applicable Ownership Interest in the Treasury Portfolio,
as the case may be, for the benefit of the Company, to
secure the obligation of the Holder under each Purchase
Contract to purchase the Common Stock of the Company.
Prior to the purchase of shares of Common Stock under each
Purchase Contract, such Purchase Contracts shall not
entitle the Holders of Normal Units Certificates to any of
the rights of a holder of shares of Common Stock,
including, without limitation, the right to vote or
receive any dividends or other payments or to consent or
to receive notice as stockholders in respect of the
meetings of stockholders or for the election of directors
of the Company or for any other matter, or any other
rights whatsoever as stockholders of the Company.
(b) Each Stripped Units Certificate shall
evidence the number of Stripped Units specified therein,
with each such Stripped Unit representing the ownership by
the Holder thereof of a 1/10 undivided beneficial interest
in a Treasury Security, subject to the Pledge of such
interest in such Treasury Security by such Holder pursuant
to the Pledge Agreement, and the rights and obligations of
the Holder thereof and the Company under one Purchase
Contract. Prior to the purchase of shares of Common Stock
under each Purchase Contract, such Purchase Contracts
shall not entitle the Holders of Stripped Units
-25-
Certificates to any of the rights of a holder of shares of
Common Stock, including, without limitation, the right to
vote or receive any dividends or other payments or to
consent or to receive notice as stockholders in respect of
the meetings of stockholders or for the election of
directors of the Company or for any other matter, or any
other rights whatsoever as stockholders of the Company.
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND
DATING.
(a) Subject to the provisions of Sections 3.13
and 3.14, upon the execution and delivery of this
Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed
by the Company to the Agent for authentication, execution
on behalf of the Holders and delivery, together with its
Issuer Order for authentication of such Certificates, and
the Agent in accordance with such Issuer Order shall
authenticate, execute on behalf of the Holders and deliver
such Certificates.
(b) The Certificates shall be executed on
behalf of the Company by the Chief Executive Officer, the
Chief Financial Officer, the President, any Vice-
President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary (or other officer
performing similar functions) of the Company and delivered
to the Agent. The signature of any of these officers on
the Certificates may be manual or facsimile.
(c) Certificates bearing the manual or
facsimile signatures of individuals who were at any time
the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication
and delivery of such Certificates or did not hold such
offices at the date of such Certificates.
(d) No Purchase Contract evidenced by a
Certificate shall be valid until such Certificate has been
executed on behalf of the Holder by the manual signature
of an authorized officer of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized officer
of the Agent shall be conclusive evidence that the Holder
of such Certificate has entered into the Purchase
Contracts evidenced by such Certificate.
(e) Each Certificate shall be dated the date of
its authentication.
-26-
(f) No Certificate shall be entitled to any
benefit under this Agreement or be valid or obligatory for
any purpose unless there appears on such Certificate a
certificate of authentication substantially in the form
provided for herein executed by an authorized officer of
the Agent by manual signature, and such certificate upon
any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly
authenticated and delivered hereunder.
SECTION 3.4 TEMPORARY CERTIFICATES.
(a) Pending the preparation of definitive
Certificates, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf
of the Holders, and deliver, in lieu of such definitive
Certificates, temporary Certificates which are in
substantially the form set forth in Exhibit A or Exhibit B
hereto, as the case may be, with such letters, numbers or
other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities
exchange on which the Normal Units or Stripped Units, as
the case may be, are listed, or as may, consistent
herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their
execution of the Certificates.
(b) If temporary Certificates are issued, the
Company will cause definitive Certificates to be prepared
without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall
be exchangeable for definitive Certificates upon surrender
of the temporary Certificates at the Corporate Trust
Office, at the expense of the Company and without charge
to the Holder. Upon surrender for cancellation of any one
or more temporary Certificates, the Company shall execute
and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver
in exchange therefor, one or more definitive Certificates
of like tenor and denominations and evidencing a like
number of Normal Units or Stripped Units, as the case may
be, as the temporary Certificate or Certificates so
surrendered. Until so exchanged, the temporary
Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the
Normal Units or Stripped Units, as the case may be,
evidenced thereby as definitive Certificates.
-27-
SECTION 3.5 REGISTRATION; REGISTRATION OF TRANSFER AND
EXCHANGE.
(a) The Agent shall keep at the Corporate Trust
Office a register (the "Normal Units Register") in which,
subject to such reasonable regulations as it may
prescribe, the Agent shall provide for the registration of
Normal Units Certificates and of transfers of Normal Units
Certificates (the Agent, in such capacity, the "Normal
Units Registrar") and a register (the "Stripped Units
Register") in which, subject to such reasonable
regulations as it may prescribe, the Agent shall provide
for the registration of the Stripped Units Certificates
and transfers of Stripped Units Certificates (the Agent,
in such capacity, the "Stripped Units Registrar").
(b) Upon surrender for registration of transfer
of any Certificate at the Corporate Trust Office, the
Company shall execute and deliver to the Agent, and the
Agent shall authenticate, execute on behalf of the
designated transferee or transferees, and deliver, in the
name of the designated transferee or transferees, one or
more new Certificates of like tenor and denominations, and
evidencing a like number of Normal Units or Stripped
Units, as the case may be.
(c) At the option of the Holder, Certificates
may be exchanged for other Certificates, of like tenor and
denominations and evidencing a like number of Normal Units
or Stripped Units, as the case may be, upon surrender of
the Certificates to be exchanged at the Corporate Trust
Office. Whenever any Certificates are so surrendered for
exchange, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf
of the Holder, and deliver the Certificates which the
Holder making the exchange is entitled to receive.
(d) All Certificates issued upon any
registration of transfer or exchange of a Certificate
shall evidence the ownership of the same number of Normal
Units or Stripped Units, as the case may be, and be
entitled to the same benefits and subject to the same
obligations, under this Agreement as the Normal Units or
Stripped Units, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer
or exchange.
(e) Every Certificate presented or surrendered
for registration of transfer or for exchange shall (if so
required by the Agent) be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory
-28-
to the Company and the Agent duly executed, by the Holder
thereof or its attorney duly authorized in writing.
(f) No service charge shall be made for any
registration of transfer or exchange of a Certificate, but
the Company and the Agent may require payment from the
Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with
any registration of transfer or exchange of Certificates,
other than any exchanges pursuant to Sections 3.4, 3.6,
3.9 and 8.5 not involving any transfer.
(g) Notwithstanding the foregoing, the Company
shall not be obligated to execute and deliver to the
Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder and deliver
any Certificate presented or surrendered for registration
of transfer or for exchange on or after the Business Day
immediately preceding the earlier of the Stock Purchase
Date or the Termination Date. In lieu of delivery of a
new Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from
such Holder, the Agent shall,
(i) if the Stock Purchase Date has
occurred, deliver the shares of Common Stock issuable
in respect of the Purchase Contracts forming a part
of the Units evidenced by such Certificate,
(ii) in the case of Normal Units, if a
Termination Event shall have occurred prior to the
Stock Purchase Date, transfer the Notes or the
appropriate Treasury Consideration or Applicable
Ownership Interest in the Treasury Portfolio, as
applicable, relating to such Normal Units, or
(iii) in the case of Stripped Units, if
a Termination Event shall have occurred prior to the
Stock Purchase Date, transfer the Treasury Securities
relating to such Stripped Units, in each case subject
to the applicable conditions and in accordance with
the applicable provisions of Article V.
SECTION 3.6 BOOK-ENTRY INTERESTS.
The Certificates, on original issuance, will be
issued in the form of one or more, fully registered Global
Certificates, to be delivered to the Depositary or its
custodian by, or on behalf of, the Company. Such Global
Certificate shall initially be registered in the applicable
-29-
Register in the name of Cede & Co., the nominee of the
Depositary, and no Beneficial Owner will receive a definitive
Certificate representing such Beneficial Owner's interest in
such Global Certificate, except as provided in Section 3.9.
The Agent shall enter into an agreement with the Depositary if
so requested by the Company. Unless and until definitive,
fully registered Certificates have been issued to Beneficial
Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be
in full force and effect;
(b) the Company shall be entitled to deal with
the Clearing Agency for all purposes of this Agreement
(including receiving approvals, votes or consents
hereunder) as the Holder of the Units and the sole holder
of the Global Certificate(s) and shall have no obligation
to the Beneficial Owners;
(c) to the extent that the provisions of this
Section 3.6 conflict with any other provisions of this
Agreement, the provisions of this Section 3.6 shall
control; and
(d) the rights of the Beneficial Owners shall
be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between
such Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants. The Clearing Agency will
make book-entry transfers among Clearing Agency
Participants.
SECTION 3.7 NOTICES TO HOLDERS.
Whenever a notice or other communication to the
Holders is required to be given under this Agreement, the
Company or the Company's agent shall give such notices and
communications to the Holders and, with respect to any Units
registered in the name of a Clearing Agency or the nominee of a
Clearing Agency, the Company or the Company's agent shall,
except as set forth herein, have no obligations to the
Beneficial Owners.
SECTION 3.8 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its
services as securities depositary with respect to the Units,
the Company may, in its sole discretion, appoint a successor
Clearing Agency with respect to the Units.
-30-
SECTION 3.9 DEFINITIVE CERTIFICATES.
If
(i) a Clearing Agency elects to
discontinue its services as securities depositary
with respect to the Units and a successor Clearing
Agency is not appointed within 90 days after such
discontinuance pursuant to Section 3.8,
(ii) the Company elects to terminate
the book-entry system through the Clearing Agency
with respect to the Units, or
(iii) there shall have occurred and be
continuing a default by the Company in respect of its
obligations under one or more Purchase Contracts,
then upon surrender of the Global Certificates representing
the Book- Entry Interests with respect to the Units by the
Clearing Agency, accompanied by registration instructions,
the Company shall cause definitive Certificates to be
delivered to Beneficial Owners in accordance with the
instructions of the Clearing Agency. The Company and the
Agent shall not be liable for any delay in delivery of such
instructions and may conclusively rely on and shall be
protected in relying on, such instructions.
SECTION 3.10 MUTILATED, DESTROYED, LOST AND STOLEN
CERTIFICATES.
(a) If any mutilated Certificate is surrendered
to the Agent, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf
of the Holder, and deliver in exchange therefor, a new
Certificate at the cost of the Holder, evidencing the same
number of Normal Units or Stripped Units, as the case may
be, and bearing a Certificate number not contemporaneously
outstanding.
(b) If there shall be delivered to the Company
and the Agent (i) evidence to their satisfaction of the
destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder
as may be required by them to hold each of them and any
agent of any of them harmless, then, in the absence of
notice to the Company or the Agent that such Certificate
has been acquired by a bona fide purchaser, the Company
shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost
-31-
or stolen Certificate, a new Certificate, evidencing the
same number of Normal Units or Stripped Units, as the case
may be, and bearing a Certificate number not
contemporaneously outstanding.
(c) Notwithstanding the foregoing, the Company
shall not be obligated to execute and deliver to the
Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver
to the Holder, a Certificate on or after the Business Day
immediately preceding the earlier of the Stock Purchase
Date or the Termination Date. In lieu of delivery of a
new Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from
such Holder, the Agent shall (i) if the Stock Purchase
Date has occurred, deliver the shares of Common Stock
issuable in respect of the Purchase Contracts forming a
part of the Units evidenced by such Certificate, or
(ii) if a Termination Event shall have occurred prior to
the Stock Purchase Date, transfer the Notes, the
appropriate Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio, or the Treasury
Securities, as the case may be, evidenced thereby, in each
case subject to the applicable conditions and in
accordance with the applicable provisions of Article V.
(d) Upon the issuance of any new Certificate
under this Section, the Company and the Agent may require
the payment by the Holder of a sum sufficient to cover any
tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the
fees and expenses of the Agent) connected therewith.
(e) Every new Certificate issued pursuant to
this Section in lieu of any destroyed, lost or stolen
Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in
respect of the Unit evidenced thereby, whether or not the
destroyed, lost or stolen Certificate (and the Units
evidenced thereby) shall be at any time enforceable by
anyone, and shall be entitled to all the benefits and be
subject to all the obligations of this Agreement equally
and proportionately with any and all other Certificates
delivered hereunder.
(f) The provisions of this Section are
exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen
Certificates.
-32-
SECTION 3.11 PERSONS DEEMED OWNERS.
(a) Prior to due presentment of a Certificate
for registration of transfer, the Company and the Agent,
and any agent of the Company or the Agent, may treat the
Person in whose name such Certificate is registered as the
owner of the Units evidenced thereby, for the purpose of
receiving interest payments on the Notes, receiving
payment of Contract Adjustment Payments, performance of
the Purchase Contracts and for all other purposes
whatsoever [(subject to Sections 4.1(a) and 5.2(a))],
whether or not any such payments shall be overdue and
notwithstanding any notice to the contrary, and neither
the Company nor the Agent, nor any agent of the Company or
the Agent, shall be affected by notice to the contrary.
(b) Notwithstanding the foregoing, with respect
to any Global Certificate, nothing herein shall prevent
the Company, the Agent or any agent of the Company or the
Agent, from giving effect to any written certification,
proxy or other authorization furnished by any Clearing
Agency (or its nominee), as a Holder, with respect to such
Global Certificate or impair, as between such Clearing
Agency and owners of beneficial interests in such Global
Certificate, the operation of customary practices
governing the exercise of rights of such Clearing Agency
(or its nominee) as Holder of such Global Certificate.
None of the Company, the Agent, or any agent of the
Company or the Agent, will have any responsibility or
liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests
of a Global Certificate or maintaining, supervising or
reviewing any records relating to such beneficial
ownership interests.
SECTION 3.12 CANCELLATION.
(a) All Certificates surrendered (i) for
delivery of shares of Common Stock on or after any
Settlement Date; (ii) upon the transfer of Notes, the
appropriate Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio, or Treasury
Securities, as the case may be, after the occurrence of a
Termination Event; or (iii) upon the registration of a
transfer or exchange of a Unit shall, if surrendered to
any Person other than the Agent, be delivered to the Agent
and, if not already cancelled, shall be promptly cancelled
by it. The Company may at any time deliver to the Agent
for cancellation any Certificates previously
authenticated, executed and delivered hereunder which the
Company may have acquired in any manner whatsoever, and
-33-
all Certificates so delivered shall, upon Issuer Order, be
promptly cancelled by the Agent. No Certificates shall be
authenticated, executed on behalf of the Holder and
delivered in lieu of or in exchange for any Certificates
cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates
held by the Agent shall be disposed of by the Agent in
accordance with its customary procedures unless otherwise
directed by Issuer Order.
(b) If the Company or any Affiliate of the
Company shall acquire any Certificate, such acquisition
shall not operate as a cancellation of such Certificate
unless and until such Certificate is delivered to the
Agent cancelled or for cancellation.
SECTION 3.13 ESTABLISHMENT OF STRIPPED UNITS.
(a) A Holder may separate the Pledged Notes,
Pledged Treasury Consideration or Pledged Applicable
Ownership Interest in the Treasury Portfolio, as
applicable, from the related Purchase Contracts in respect
of the Normal Units held by such Holder by substituting
for such Pledged Notes, Pledged Treasury Consideration or
Pledged Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, Treasury Securities that
will pay, on the Stock Purchase Date, an amount equal to
the aggregate principal amount of such Notes or the
appropriate Treasury Consideration or Applicable Ownership
Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio (a "Collateral
Substitution"), at any time from and after the date of
this Agreement and on or prior to the second Business Day
immediately preceding the Stock Purchase Date, by
(i) depositing with the Collateral Agent Treasury
Securities having an aggregate principal amount equal to
the aggregate Stated Amount of such Normal Units, and
(ii) transferring the related Normal Units to the Agent
accompanied by a notice to the Agent, substantially in the
form of Exhibit D hereto, stating that the Holder has
transferred the relevant amount of Treasury Securities to
the Collateral Agent and requesting that the Agent
instruct the Collateral Agent to release the Pledged
Notes, Pledged Treasury Consideration or Pledged
Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, underlying such Normal Units,
whereupon the Agent shall promptly give such instruction
to the Collateral Agent, substantially in the form of
Exhibit C hereto. Notwithstanding the foregoing, a Holder
may not separate the Pledged Notes, Pledged Treasury
Consideration or Pledged Applicable Ownership Interest of
-34-
the Treasury Portfolio, as the case may be, from the
related Purchase Contracts in respect of the Normal Units
held by such Holder during the periods beginning on the
fourth Business Day prior to any Remarketing Period and
ending on the third Business Day after the end of such
Remarketing Period. Upon receipt of the Treasury
Securities described in clause (i) above and the
instruction described in clause (ii) above, in accordance
with the terms of the Pledge Agreement, the Collateral
Agent will release to the Agent, on behalf of the Holder,
such Pledged Notes, Pledged Treasury Consideration or
Pledged Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, from the Pledge, free and
clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(i) cancel the related Normal Units;
(ii) transfer the Pledged Notes,
Pledged Treasury Consideration or Pledged Applicable
Ownership Interest of the Treasury Portfolio, as the
case may be, to the Holder; and
(iii) authenticate, execute on behalf
of such Holder and deliver a Stripped Units
Certificate executed by the Company in accordance
with Section 3.3 evidencing the same number of
Purchase Contracts as were evidenced by the cancelled
Normal Units.
(b) Holders who elect to separate the Pledged
Notes, Pledged Treasury Consideration or Pledged
Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, from the related Purchase Contract and
to substitute Treasury Securities for such Pledged Notes,
Pledged Treasury Consideration or Pledged Applicable
Ownership Interest of the Treasury Portfolio, as the case
may be, shall be responsible for any fees or expenses
payable to the Collateral Agent for its services as
Collateral Agent in respect of the substitution, and the
Company shall not be responsible for any such fees or
expenses.
(c) Holders may make Collateral Substitutions
(i) if Treasury Securities are being substituted for
Pledged Notes, only in integral multiples of 10 Normal
Units, or (ii) if the Collateral Substitutions occur after
the Remarketing Date or any Subsequent Remarketing Date,
as the case may be, only in integral multiples of Normal
Units such that the Treasury Securities to be deposited
and the Treasury Consideration to be released are in
integral multiples of $1,000.
-35-
(d) In the event a Holder making a Collateral
Substitution pursuant to this Section 3.13 fails to effect
a book-entry transfer of the Normal Units or fails to
deliver a Normal Units Certificate to the Agent after
depositing Treasury Securities with the Collateral Agent,
the Pledged Notes or Pledged Treasury Consideration or
Pledged Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, constituting a part of such
Normal Units, and any distributions on such Pledged Notes
or Pledged Treasury Consideration or Pledged Applicable
Ownership Interest of the Treasury Portfolio, as the case
may be, shall be held in the name of the Agent or its
nominee in trust for the benefit of such Holder, until
such Normal Units are so transferred or the Normal Units
Certificate is so delivered, as the case may be, or, with
respect to a Normal Units Certificate, such Holder
provides evidence satisfactory to the Company and the
Agent that such Normal Units Certificate has been
destroyed, lost or stolen, together with any indemnity
that may be required by the Agent and the Company.
(e) Except as described in this Section 3.13,
for so long as the Purchase Contract underlying a Normal
Unit remains in effect, such Normal Unit shall not be
separable into its constituent parts, and the rights and
obligations of the Holder of such Normal Unit in respect
of the Note or the appropriate Treasury Consideration or
Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, and the Purchase Contract comprising
such Normal Unit may be acquired, and may be transferred
and exchanged, only as a Normal Unit.
SECTION 3.14 REESTABLISHMENT OF NORMAL UNITS.
(a) A Holder of Stripped Units may reestablish
Normal Units at any time from and after the date of this
Agreement and on or prior to the second Business Day
immediately preceding the Stock Purchase Date, by (i)
depositing with the Collateral Agent the Notes or the
appropriate Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio (identified and
calculated by reference to the Treasury Consideration then
comprising Normal Units), as the case may be, then
comprising such number of Normal Units as is equal to such
Stripped Units and (ii) transferring such Stripped Units
to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit D hereto, stating
that the Holder has transferred the relevant amount of
Notes or the appropriate Treasury Consideration or
-36-
Applicable Ownership Interest in the Treasury Portfolio,
as the case may be, to the Collateral Agent and requesting
that the Agent instruct the Collateral Agent to release
the Pledged Treasury Securities underlying such Stripped
Unit, whereupon the Agent shall promptly give such
instruction to the Collateral Agent, substantially in the
form of Exhibit C hereto. Notwithstanding the foregoing, a
Holder may not reestablish Normal Units during the periods
beginning on the fourth Business Day prior to any
Remarketing Period and ending on the third business day
after the end of such Remarketing Period. Upon receipt of
the Notes or the appropriate Treasury Consideration or
Applicable Ownership Interest in the Treasury Portfolio,
as the case may be, described in clause (i) above and the
instruction described in clause (ii) above, in accordance
with the terms of the Pledge Agreement, the Collateral
Agent will release to the Agent, on behalf of the Holder,
such Pledged Treasury Securities from the Pledge, free and
clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(i) cancel the related Stripped
Units;
(ii) transfer the Pledged Treasury
Securities to the Holder; and
(iii) authenticate, execute on behalf
of such Holder and deliver a Normal Units Certificate
executed by the Company in accordance with
Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Stripped
Units.
(b) Holders of Stripped Units may reestablish
Normal Units (i) only in integral multiples of 10 Stripped
Units for 10 Normal Units or (ii) if the reestablishment
occurs after the Remarketing Date (if such remarketing is
successful) or any Subsequent Remarketing Date, or after a
Tax Event Redemption, only in integral multiples of
Stripped Units such that the Treasury Consideration to be
deposited and the Treasury Securities to be released are
in integral multiples of $1,000.
(c) Except as provided in this Section 3.14,
for so long as the Purchase Contract underlying a Stripped
Unit remains in effect, such Stripped Unit shall not be
separable into its constituent parts, and the rights and
obligations of the Holder of such Stripped Unit in respect
of the Treasury Security and Purchase Contract comprising
such Stripped Unit may be acquired, and may be transferred
and exchanged, only as a Stripped Unit.
-37-
(d) Holders of Stripped Units who reestablish
Normal Units shall be responsible for any fees or expenses
payable to the Collateral Agent for its services as
Collateral Agent in respect of the substitution, and the
Company shall not be responsible for any such fees or
expenses.
(e) In the event a Holder who reestablishes
Normal Units pursuant to this Section 3.14 fails to effect
a book-entry transfer of the Stripped Units or fails to
deliver a Stripped Units Certificate to the Agent after
depositing Notes with the Collateral Agent, the Pledged
Treasury Consideration or Pledged Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,
constituting a part of such Stripped Units, and any
distributions on such Treasury Securities shall be held in
the name of the Agent or its nominee in trust for the
benefit of such Holder, until such Stripped Units are so
transferred or the Stripped Units Certificate is so
delivered, as the case may be, or, with respect to a
Stripped Units Certificate, such Holder provides evidence
satisfactory to the Company and the Agent that such
Stripped Units Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required
by the Agent and the Company.
SECTION 3.15 TRANSFER OF COLLATERAL UPON OCCURRENCE OF
TERMINATION EVENT.
Upon the occurrence of a Termination Event and the
transfer to the Agent of the Notes, the appropriate Treasury
Consideration or Applicable Ownership Interest in the Treasury
Portfolio, or the Treasury Securities, as the case may be,
underlying the Normal Units and the Stripped Units pursuant to
the terms of the Pledge Agreement, the Agent shall request
transfer instructions with respect to such Notes or the
appropriate Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio, or Treasury Securities, as
the case may be, from each Holder by written request mailed to
such Holder at its address as it appears in the Normal Units
Register or the Stripped Units Register, as the case may be.
Upon book- entry transfer of the Normal Units or Stripped Units
or delivery of a Normal Units Certificate or Stripped Units
Certificate to the Agent with such transfer instructions, the
Agent shall transfer the Notes, the appropriate Treasury
Consideration or Applicable Ownership Interest in the Treasury
Portfolio, or Treasury Securities or Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,
underlying such Normal Units or Stripped Units, as the case may
-38-
be, to such Holder by book-entry transfer, or other appropriate
procedures, in accordance with such instructions. In the event
a Holder of Normal Units or Stripped Units fails to effect such
transfer or delivery, the Notes, the appropriate Treasury
Consideration or Treasury Securities, as the case may be,
underlying such Normal Units or Stripped Units, as the case may
be, and any distributions thereon, shall be held in the name of
the Agent or its nominee in trust for the benefit of such
Holder, until such Normal Units or Stripped Units are
transferred or the Normal Units Certificate or Stripped Units
Certificate is surrendered or such Holder provides satisfactory
evidence that such Normal Units Certificate or Stripped Units
Certificate has been destroyed, lost or stolen, together with
any indemnity that may be required by the Agent and the
Company.
SECTION 3.16 NO CONSENT TO ASSUMPTION.
Each Holder of a Unit, by acceptance thereof, shall
be deemed expressly to have withheld any consent to the
assumption under Section 365 of the Bankruptcy Code or
otherwise, of the Purchase Contract by the Company, any
receiver, liquidator or person or entity performing similar
functions or its trustee in the event that the Company becomes
the debtor under the Bankruptcy Code or subject to other
similar state or federal law providing for reorganization or
liquidation.
ARTICLE IV.
THE NOTES
SECTION 4.1 PAYMENT OF INTEREST; RIGHTS TO INTEREST
PAYMENTS PRESERVED; NOTICE.
(a) A payment on any Note, Treasury
Consideration or Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, which is paid on
any Payment Date other than a Payment Date with respect to
the Stated Amount due on Treasury Consideration or
Applicable Ownership Interest in the Treasury Portfolio
shall, subject to receipt thereof by the Agent from the
Collateral Agent (if the Collateral Agent is the
registered owner thereof) as provided by the terms of the
Pledge Agreement, be paid to the Person in whose name the
Normal Units Certificate (or one or more Predecessor
Normal Units Certificates) of which such Note or the
appropriate Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, is
a part is registered at the close of business on the
Record Date for such Payment Date.
-39-
(b) Each Normal Units Certificate evidencing
Notes delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of any other
Normal Units Certificate shall carry the rights to
interest accrued and unpaid, which were carried by the
Notes and Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio, as the case may be,
underlying such other Normal Units Certificate.
(c) In the case of any Normal Unit with respect
to which Early Settlement of the underlying Purchase
Contract is effected on an Early Settlement Date, Merger
Early Settlement of the underlying Purchase Contract is
effected on a Merger Early Settlement Date, Cash
Settlement is effected on the Business Day immediately
preceding the Stock Purchase Date, or a Collateral
Substitution is effected, in each case on a date that is
after any Record Date and on or prior to the next
succeeding Payment Date, payments on the Note or the
appropriate Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio, as the case may be,
underlying such Normal Unit otherwise payable on such
Payment Date shall be payable on such Payment Date
notwithstanding such Early Settlement, Merger Early
Settlement, Cash Settlement or Collateral Substitution, as
the case may be, and such payments shall, subject to
receipt thereof by the Agent, be payable to the Person in
whose name the Normal Units Certificate (or one or more
Predecessor Normal Unit Certificates) was registered at
the close of business on the Record Date. Except as
otherwise expressly provided in the immediately preceding
sentence, in the case of any Normal Unit with respect to
which Early Settlement, Merger Early Settlement or Cash
Settlement of the underlying Purchase Contract is
effected, or with respect to which a Collateral
Substitution has been effected, payments on the related
Notes or payments on the appropriate Treasury
Consideration or Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, that would
otherwise be payable after the applicable Settlement Date
or after such Collateral Substitution, as the case may be,
shall not be payable hereunder to the Holder of such
Normal Unit; provided, that to the extent that such Holder
continues to hold the Separate Notes that formerly
comprised a part of such Holder's Normal Units, such
Holder shall be entitled to receive the payments on such
Separate Notes.
SECTION 4.2 NOTICE AND VOTING.
Under the terms of the Pledge Agreement, the Agent
will be entitled to exercise the voting and any other
-40-
consensual rights pertaining to the Pledged Notes but only to
the extent instructed by the Holders as described below. Upon
receipt of notice of any meeting at which holders of Notes are
entitled to vote or upon any solicitation of consents, waivers
or proxies of holders of Notes, the Agent shall, as soon as
practicable thereafter, mail to the Holders of Normal Units a
notice (a) containing such information as is contained in the
notice or solicitation, (b) stating that each Holder on the
record date set by the Agent therefor (which, to the extent
possible, shall be the same date as the record date for
determining the holders of Notes entitled to vote) shall be
entitled to instruct the Agent as to the exercise of the voting
rights pertaining to the Pledged Notes underlying their Normal
Units and (c) stating the manner in which such instructions may
be given. Upon the written request of the Holders of Normal
Units on such record date, the Agent shall endeavor insofar as
practicable to vote or cause to be voted, in accordance with
the instructions set forth in such requests, the maximum number
of Pledged Notes as to which any particular voting instructions
are received. In the absence of specific instructions from the
Holder of a Normal Unit, the Agent shall abstain from voting
the Pledged Note underlying such Normal Unit. The Company
hereby agrees, if applicable, to solicit Holders of Normal
Units to timely instruct the Agent in order to enable the Agent
to vote such Pledged Notes.
SECTION 4.3 TAX EVENT REDEMPTION
Upon the occurrence of a Tax Event Redemption prior
to the successful remarketing of the Notes, the Company may
elect to instruct in writing the Collateral Agent to apply, and
upon such written instruction, the Collateral Agent shall
apply, out of the aggregate Redemption Price for the Notes that
are components of Normal Units, an amount equal to the
aggregate Tax Event Redemption Principal Amount for the Notes
that are components of Normal Units to purchase on behalf of
the Holders of Normal Units the Treasury Portfolio and promptly
remit the remaining portion of such Redemption Price to the
Agent for payment to the Holders of such Normal Units. The
Treasury Portfolio will be substituted for the Pledged Notes,
and will be pledged to the Collateral Agent in accordance with
the terms of the Pledge Agreement to secure the obligation of
each Holder of a Normal Unit to purchase the Common Stock under
the Purchase Contract constituting a part of such Normal Unit.
Following the occurrence of a Tax Event Redemption prior to a
successful remarketing of the Notes, the Holders of Normal
Units and the Collateral Agent shall have such security
interests, rights and obligations with respect to the Treasury
Portfolio as the Holder of Normal Units and the Collateral
Agent had in respect of the Notes, as the case may be, subject
-41-
to the Pledge thereof as provided in Articles II, III, IV, V
and VI of the Pledge Agreement, and any reference herein or in
the Certificates to the Note shall be deemed to be a reference
to such Treasury Portfolio and any reference herein or in the
Certificates to interest on the Notes shall be deemed to be a
reference to corresponding distributions on the Treasury
Portfolio. The Company may cause to be made in any Normal Unit
Certificates thereafter to be issued such change in phraseology
and form (but not in substance) as may be appropriate to
reflect the substitution of the Treasury Portfolio for Notes as
collateral.
The Company shall cause notice of any Tax Event
Redemption to be mailed, at least 30 calendar days but not more
than 60 calendar days before such Tax Event Redemption Date, to
each Holder of Notes to be redeemed at its registered address.
Upon the occurrence of a Tax Event Redemption after
the successful remarketing of the Notes, the Redemption Price
will be payable in cash to the holders of the Notes.
ARTICLE V.
THE PURCHASE CONTRACTS; THE REMARKETING
SECTION 5.1 PURCHASE OF SHARES OF COMMON STOCK.
(a) Each Purchase Contract shall, unless an
Early Settlement has occurred in accordance with
Section 5.9, or a Merger Early Settlement has occurred in
accordance with Section 5.10, obligate the Holder of the
related Unit to purchase, and the Company to sell, on the
Stock Purchase Date at a price equal to $100 (the
"Purchase Price"), a number of newly issued shares of
Common Stock equal to the Settlement Rate unless, on or
prior to the Stock Purchase Date, there shall have
occurred a Termination Event with respect to the Unit of
which such Purchase Contract is a part. The "Settlement
Rate" is equal to,
(i) if the Applicable Market Value
(as defined below) is greater than or equal to $___
(the "Threshold Appreciation Price"), ___ shares of
Common Stock per Purchase Contract,
(ii) if the Applicable Market Value is
less than the Threshold Appreciation Price, but is
greater than $___, the number of shares of Common
Stock per Purchase Contract equal to the Stated
Amount of the related Unit divided by the Applicable
Market Value, and
-42-
(iii) if the Applicable Market Value is
equal to or less than $___, ___shares of Common Stock
per Purchase Contract,
in each case subject to adjustment as provided in
Section 5.6 (and in each case rounded upward or downward to
the nearest 1/10,000th of a share). As provided in
Section 5.12, no fractional shares of Common Stock will be
issued upon settlement of Purchase Contracts.
(b) No fractional shares of Common Stock will
be issued by the Company with respect to the payment of
Contract Adjustment Payments on the Stock Purchase Date.
In lieu of fractional shares otherwise issuable with
respect to such payment of Contract Adjustment Payments,
the Holder will be entitled to receive an amount in cash
as provided in Section 5.12.
(c) The "Applicable Market Value" means the
average of the Closing Price per share of Common Stock on
each of the 20 consecutive Trading Days ending on the
third Trading Day immediately preceding the Stock Purchase
Date. The "Closing Price" of the Common Stock on any date
of determination means the closing sale price (or, if no
closing price is reported, the last reported sale price)
of the Common Stock on the New York Stock Exchange (the
"NYSE") on such date or, if the Common Stock is not listed
for trading on the NYSE on any such date, as reported in
the composite transactions for the principal United States
securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a
United States national or regional securities exchange, as
reported by The Nasdaq Stock Market, or, if the Common
Stock is not so reported, the last quoted bid price for
the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the
market value of the Common Stock on such date as
determined by a nationally recognized independent
investment banking firm retained for this purpose by the
Company. A "Trading Day" means a day on which the Common
Stock (A) is not suspended from trading on any national or
regional securities exchange or association or over-the-
counter market at the close of business and (B) has traded
at least once on the national or regional securities
exchange or association or over-the-counter market that is
the primary market for the trading of the Common Stock.
(d) Each Holder of a Unit, by its acceptance
thereof, irrevocably authorizes the Agent to enter into
and perform the related Purchase Contract on its behalf as
-43-
its attorney-in-fact (including the execution of
Certificates on behalf of such Holder), agrees to be bound
by the terms and provisions thereof, covenants and agrees
to perform its obligations under such Purchase Contracts,
and consents to the provisions hereof, irrevocably
authorizes the Agent as its attorney-in-fact to enter into
and perform the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to and agrees to be bound
by the Pledge of the Notes, the appropriate Treasury
Consideration or Applicable Ownership Interest in the
Treasury Portfolio, or the Treasury Securities, pursuant
to the Pledge Agreement; provided that upon a Termination
Event, the rights of the Holder of such Unit under the
Purchase Contract may be enforced without regard to any
other rights or obligations. Each Holder of a Unit, by its
acceptance thereof, further covenants and agrees, that, to
the extent and in the manner provided in Section 5.4 and
the Pledge Agreement, but subject to the terms thereof,
payments in respect of the Notes, the appropriate Treasury
Consideration or Applicable Ownership Interest in the
Treasury Portfolio, or the Treasury Securities to be paid
upon settlement of such Holder's obligations to purchase
Common Stock under the Purchase Contract, shall be paid on
the Stock Purchase Date by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under
such Purchase Contract.
(e) Upon registration of transfer of a
Certificate, the transferee shall be bound (without the
necessity of any other action on the part of such
transferee) under the terms of this Agreement, the
Purchase Contracts underlying such Certificate and the
Pledge Agreement, and the transferor shall be released
from the obligations under this Agreement, the Purchase
Contracts underlying the Certificates so transferred and
the Pledge Agreement. The Company covenants and agrees,
and each Holder of a Certificate, by its acceptance
thereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
SECTION 5.2 CONTRACT ADJUSTMENT PAYMENTS.
(a) Subject to Section 5.3 herein, the Company
shall pay, on each Payment Date, the Contract Adjustment
Payments, if any, payable in respect of each Purchase
Contract to the Person in whose name a Certificate (or one
or more Predecessor Certificates) is registered at the
close of business on the Record Date next preceding such
Payment Date in such coin or currency of the United States
as at the time of payment shall be legal tender for
payments. The Contract Adjustment Payments, if any, will
-44-
be payable at the office in New York, New York, maintained
for that purpose or, at the option of the Company, by
check mailed to the address of the Person entitled thereto
at such Person's address as it appears on the Register or
by wire transfer to the account designated to the Agent by
a prior written notice by such Person delivered at least
five Business Days prior to the applicable Payment Date.
(b) Upon the occurrence of a Termination Event,
the Company's obligation to pay Contract Adjustment
Payments (including any accrued Deferred Contract
Adjustment Payments), if any, shall cease.
(c) Each Certificate delivered under this
Agreement upon registration of transfer of or in exchange
for or in lieu of (including as a result of a Collateral
Substitution or the re-establishment of a Normal Unit) any
other Certificate shall carry the rights to Contract
Adjustment Payments, if any, accrued and unpaid, and to
accrue Contract Adjustment Payments, if any, which were
carried by the Purchase Contracts underlying such other
Certificates.
(d) Subject to Sections 5.9 and 5.10, in the
case of any Unit with respect to which Early Settlement or
Merger Early Settlement of the underlying Purchase
Contract is effected on an Early Settlement Date, a Merger
Early Settlement Date, respectively, or in respect of
which Cash Settlement of the underlying Purchase Contract
is effected on the Business Day immediately preceding the
Stock Purchase Date, or with respect to which a Collateral
Substitution or an establishment or re-establishment of a
Normal Unit pursuant to Section 3.14 is effected, in each
case on a date that is after any Record Date and on or
prior to the next succeeding Payment Date, Contract
Adjustment Payments on the Purchase Contract underlying
such Unit otherwise payable on such Payment Date shall be
payable on such Payment Date notwithstanding such Cash
Settlement, Early Settlement, Merger Early Settlement,
Collateral Substitution or establishment or re-
establishment of Normal Units, and such Contract
Adjustment Payments shall be paid to the Person in whose
name the Certificate evidencing such Unit (or one or more
Predecessor Certificates) is registered at the close of
business on such Record Date. Except as otherwise
expressly provided in the immediately preceding sentence,
in the case of any Unit with respect to which Cash
Settlement, Early Settlement or Merger Early Settlement of
the underlying Purchase Contract is effected on the
Business Day immediately preceding the Stock Purchase
Date, an Early Settlement Date or Merger Early Settlement
-45-
Date, as the case may be, or with respect to which a
Collateral Substitution or an establishment or re-
establishment of a Normal Unit has been effected, Contract
Adjustment Payments, if any, that would otherwise be
payable after the Early Settlement Date, or Merger Early
Settlement Date, Collateral Substitution or such
establishment or re-establishment with respect to such
Purchase Contract shall not be payable.
SECTION 5.3 DEFERRAL OF CONTRACT ADJUSTMENT PAYMENTS.
(a) The Company shall have the right, at any
time prior to the Stock Purchase Date, to defer the
payment of any or all of the Contract Adjustment Payments
otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written
notice of its election to defer each such deferred
Contract Adjustment Payment (specifying the amount to be
deferred) at least ten Business Days prior to the earlier
of (i) the next succeeding Payment Date or (ii) the date
the Company is required to give notice of the Record Date
or Payment Date with respect to payment of such Contract
Adjustment Payments to the NYSE or other applicable self-
regulatory organization or to Holders of the Units, but in
any event not less than one Business Day prior to such
Record Date. Any Contract Adjustment Payments so deferred
shall, to the extent permitted by law, bear additional
Contract Adjustment Payments thereon at the rate of __%
(Insert sum of Contract Adjustment payment rate and Notes
interest rate.) per year (computed on the basis of a 360-
day year of 12 30-day months), compounding on each
succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any,
together with the additional Contract Adjustment Payments
accrued thereon, being referred to herein as the "Deferred
Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next
succeeding Payment Date except to the extent that payment
is deferred pursuant to this Section 5.3. No Contract
Adjustment Payments may be deferred to a date that is
after the Stock Purchase Date and no such deferral period
may end other than on a Payment Date. If the Purchase
Contracts are terminated upon the occurrence of a
Termination Event, the Holder's right to receive Contract
Adjustment Payments, if any, and Deferred Contract
Adjustment Payments, will terminate.
(b) In the event that the Company elects to
defer the payment of Contract Adjustment Payments on the
Purchase Contracts until a Payment Date prior to the Stock
Purchase Date, then all Deferred Contract Adjustment
-46-
Payments, if any, shall be payable to the registered
Holders as of the close of business on the Record Date
immediately preceding such Payment Date.
(c) In the event that the Company elects to
defer the payment of Contract Adjustment Payments on the
Purchase Contracts until the Stock Purchase Date, each
Holder will receive on the Stock Purchase Date in lieu of
a cash payment a number of shares of Common Stock (in
addition to a number of shares of Common Stock equal to
the Settlement Rate) equal to (A) the aggregate amount of
Deferred Contract Adjustment Payments payable to such
Holder (net of any required tax withholding on such
Deferred Contract Adjustment Payment, which shall be
remitted to the appropriate taxing jurisdiction) divided
by (B) the Applicable Market Value.
(d) No fractional shares of Common Stock will
be issued by the Company with respect to the payment of
Deferred Contract Adjustment Payments on the Stock
Purchase Date. In lieu of fractional shares otherwise
issuable with respect to such payment of Deferred Contract
Adjustment Payments, the Holder will be entitled to
receive an amount in cash as provided in Section 5.12.
(e) In the event the Company exercises its
option to defer the payment of Contract Adjustment
Payments then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or
pay dividends on, make distributions with respect to, or
redeem, purchase or acquire, or make a liquidation payment
with respect to, any of the Company's Common Stock other
than:
(i) purchases, redemptions or
acquisitions of shares of Common Stock of the Company
in connection with any employment contract, benefit
plan or other similar arrangement with or for the
benefit of employees, officers or directors or a
stock purchase or dividend reinvestment plan, or the
satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on
the date the Company exercises its right to defer the
Contract Adjustment Payments;
(ii) as a result of a reclassification
of the Company's Common Stock or the exchange or
conversion of one class or series of the Company's
Capital Stock for another class or series of the
Company's Common Stock;
-47-
(iii) the purchase of fractional
interests of the Company's Common Stock pursuant to
the conversion or exchange provisions of such Common
Stock or the security being converted or exchanged;
(iv) dividends or distributions in any
series of the Company's Common Stock (or rights to
acquire Common Stock) or repurchases, acquisitions or
redemptions of Common Stock in connection with the
issuance or exchange of any series of the Company's
Common Stock (or securities convertible into or
exchangeable for shares of the Company's Common
Stock); or redemptions, exchanges or repurchases of
any rights outstanding under a shareholder rights
plan or the declaration or payment thereunder of a
dividend or distribution of or with respect to rights
in the future.
SECTION 5.4 PAYMENT OF PURCHASE PRICE: REMARKETING.
(a) Unless a Tax Event Redemption, successful
remarketing, Termination Event, Merger Early Settlement or
Early Settlement has occurred, each Holder of a Normal
Unit may pay in cash ("Cash Settlement") the Purchase
Price for the shares of Common Stock to be purchased
pursuant to a Purchase Contract if such Holder notifies
the Agent by use of a notice in substantially the form of
Exhibit E hereto of its intention to make a Cash
Settlement. Such notice shall be made on or prior to 5:00
p.m., New York City time, on the seventh Business Day
immediately preceding the Stock Purchase Date. The Agent
shall promptly notify the Collateral Agent of the receipt
of such a notice from a Holder intending to make a Cash
Settlement.
(i) A Holder of a Normal Unit who has so
notified the Agent of its intention to make a Cash
Settlement is required to pay the Purchase Price to
the Collateral Agent prior to 11:00 a.m., New York
City time, on the Business Day immediately preceding
the Stock Purchase Date in lawful money of the United
States by certified or cashiers' check or wire
transfer, in each case payable to or upon the order
of the Company. Any cash received by the Collateral
Agent will be paid to the Company on the Stock
Purchase Date in settlement of the Purchase Contract
in accordance with the terms of this Agreement and
the Pledge Agreement.
(ii) If a Holder of a Normal Unit
fails to notify the Agent of its intention to make a
-48-
Cash Settlement in accordance with paragraph (a)(i)
above, such failure shall constitute an event of
default and the Holder shall be deemed to have
consented to the disposition of the Pledged Notes
pursuant to the remarketing as described in paragraph
(b) below. If a Holder of a Normal Units does notify
the Agent as provided in paragraph (a)(i) above of
its intention to pay the Purchase Price in cash, but
fails to make such payment as required by paragraph
(a)(i) above, such failure shall also constitute a
default; however, the Notes of such a Holder will not
be remarketed but instead the Collateral Agent, for
the benefit of the Company, will exercise its rights
as a secured party with respect to such Notes,
including but not limited to those rights specified
in subsection (b)(iii) below.
(b) (i) The Company shall engage a nationally
recognized investment bank (the "Remarketing Agent")
pursuant to a Remarketing Agreement to be mutually
agreed on by the Company, the Agent and the
Remarketing Agent, but substantially as set forth in
Exhibit F hereto to sell the Notes of Holders of
Normal Units, other than Holders that have elected
not to participate in the remarketing pursuant to the
procedures set forth in clause (iv) below, and
holders of Separate Notes that have elected to
participate in the remarketing pursuant to the
procedures set forth in Section 4.5(d) of the Pledge
Agreement. On the seventh day prior to the
Remarketing Date the Agent shall give Holders of
Normal Units and holders of Separate Notes notice of
the remarketing (the form of which notice to be
provided by the Company) in a daily newspaper in the
English language of general circulation in The City
of New York, which is expected to be The Wall Street
Journal, including the specific U.S. Treasury
security or securities (including the CUSIP number
and/or the principal terms of such Treasury security
or securities) described in clause (iv) below, that
must be delivered by Holders of Normal Units that
elect not to participate in the remarketing pursuant
to clause (iv) below, no later than 10:00 a.m. on the
fourth Business Day preceding the Remarketing Date.
The Agent shall notify, by 10:00 a.m., New York City
time, on the third Business Day preceding the
Remarketing Date, the Remarketing Agent and the
Collateral Agent of the aggregate number of Notes of
Normal Unit Holders to be remarketed. On the third
Business Day preceding the Remarketing Date, no later
than by 10:00 a.m. New York City time, pursuant to
-49-
the terms of the Pledge Agreement, the Custodial
Agent will notify the Remarketing Agent of the
aggregate number of Separate Notes to be remarketed.
On the third Business Day immediately preceding the
Remarketing Date, the Collateral Agent and the
Custodial Agent, pursuant to the terms of the Pledge
Agreement, will deliver for remarketing to the
Remarketing Agent all Notes to be remarketed. Upon
receipt of such notice from the Agent and the
Custodial Agent and such Notes from the Collateral
Agent and the Custodial Agent, the Remarketing Agent
will, on the third Business Day following the
Remarketing Date, use its reasonable best efforts to
(i) establish a rate of interest that, in the opinion
of the Remarketing Agent, will, when applied to the
Notes (assuming, even if not true, that all of the
Notes are included in the remarketing), enable the
then current aggregate market value of the Notes to
have a value equal to at least 100.5% of the
Remarketing Value as of the Remarketing Date or as of
any Subsequent Remarketing Date, as the case may be
(the "Reset Rate") and (ii) sell such Notes on such
date at a price equal to 100.5% of the Remarketing
Value. The Remarketing Agent will use the proceeds
from a successful remarketing to purchase the
appropriate U.S. Treasury securities (the "Agent-
purchased Treasury Consideration") with the CUSIP
numbers, if any, selected by the Remarketing Agent,
described in clauses (i) and (ii) of the definition
of Remarketing Value related to the Notes of Holders
of Normal Units that were remarketed. On or prior to
the third Business Day following the Remarketing
Date, the Remarketing Agent shall deliver such Agent-
purchased Treasury Consideration to the Agent, which
shall thereupon deliver such Agent-purchased Treasury
Consideration to the Collateral Agent. The
Collateral Agent, for the benefit of the Company,
will thereupon apply such Agent-purchased Treasury
Consideration, in accordance with the Pledge
Agreement, to secure such Holders' obligations under
the Purchase Contracts. The Remarketing Agent will
deduct as a remarketing fee an amount not exceeding
25 basis points (.25%) of the total proceeds from the
remarketing (the "Remarketing Fee"). The Remarketing
Agent will remit (1) the portion of the proceeds from
the remarketing attributable to the Separate Notes to
the holders of Separate Notes that were remarketed
and (2) the remaining portion of the proceeds, less
those proceeds used to purchase the Agent-purchased
Treasury Consideration, to the Holders of the Normal
Units that were remarketed, all determined on a pro
-50-
rata basis, in each case, on or prior to the third
Business Day following the Remarketing Date. Holders
whose Notes are so remarketed will not otherwise be
responsible for the payment of any Remarketing Fee in
connection therewith.
(ii) If, in spite of using its commercially
reasonable best efforts, the Remarketing Agent cannot
remarket the Notes included in the remarketing at a
price equal to at least 100.5% of the Remarketing
Value, the Remarketing Agent will attempt to again
remarket the Notes included in the remarketing at a
price equal to at least 100.5% of the Remarketing
Value on each of the two immediately following
Business Days. If the Remarketing Agent cannot
remarket the Notes included in the remarketing at a
price equal to at least 100.5% of the Remarketing
Value on either of those days, it will attempt to
remarket the Notes included in the remarketing at a
price equal to at least 100.5% of the Remarketing
Value on each of the three Business Days immediately
preceding _________, 2004. If the Remarketing Agent
cannot remarket the Notes included in the remarketing
at a price equal to at least 100.5% of the
Remarketing Value either on any of the two Business
Days immediately following the Remarketing Date or on
any of the three Business Days immediately preceding
____________, 2004, the remarketing in each such
period will be deemed to have failed (each, a "Failed
Remarketing"). If the Remarketing Agent cannot
remarket the Notes included in the remarketing at a
price equal to at least 100.5% of the Remarketing
Value on any of the three Business Days immediately
preceding ____________, 2004, the Remarketing Agent
will further attempt to remarket the Notes included
in the remarketing at a price equal to at least
100.5% of the Remarketing Value on each of the three
Business Days immediately preceding the Stock
Purchase Date. If, in spite of using its
commercially reasonable best efforts, the Remarketing
Agent fails to remarket the Notes underlying the
Normal Units at 100.5% of the Remarketing Value in
accordance with the terms of the Pledge Agreement by
4:00 p.m., New York City time, on the Business Day
immediately preceding the Stock Purchase Date, the
"Last Failed Remarketing" will be deemed to have
occurred. In this case, within three Business Days
following the date of the Last Failed Remarketing,
the Remarketing Agent shall return any Notes
delivered to it to the Collateral Agent. The
Collateral Agent, for the benefit of the Company, may
-51-
exercise its rights as a secured party with respect
to such Notes, including those actions specified in
subsection (b) (iii) below; provided, that if upon
the Last Failed Remarketing, the Collateral Agent
delivers the Note to the Company in full satisfaction
of the Holder's obligation under the Purchase
Contract, any accumulated and unpaid interest on such
Notes will become payable by the Company to the Agent
for payment to the Holder of the Normal Units to
which such Notes relate. Such payment will be made by
the Company on or prior to 11 a.m., New York City
time, on the Stock Purchase Date in lawful money of
the United States by certified or cashier's check or
wire transfer in immediately available funds payable
to or upon the order of the Agent. If any Holder of
Notes exercises it right to put such Holder's Notes
to the Company pursuant to the terms of the
Indenture, the proceeds of the put shall be paid (a)
to the Collateral Agent on behalf of such Holder to
satisfy such Holder's obligation under the Purchase
Contract if such Notes are part of a Normal Unit and
(b) to the Holder of such Notes if the Notes are
Separate Notes. The Company will cause a notice of
any Failed Remarketing and of the Last Failed
Remarketing to be published on the fourth Business
Day following the Remarketing Date, any Subsequent
Remarketing Date and the date of the Last Failed
Remarketing, as the case may be, in a daily newspaper
in the English language of general circulation in The
City of New York, which is expected to be The Wall
Street Journal. The Company will also release this
information by means of Bloomberg and Reuters
newswire.
(iii) With respect to any Notes which
constitute part of Normal Units which are subject to
the Last Failed Remarketing, the Collateral Agent for
the benefit of the Company reserves all of its rights
as a secured party with respect thereto and, subject
to applicable law and Section 5.4 (e) below, may,
among other things, permit the Company to cause the
Notes to be sold or to retain and cancel such Notes,
in either case, in full satisfaction of the Holders'
obligations under the Purchase Contracts.
(iv) A Holder of Normal Units may elect not
to participate in the remarketing and retain the
Notes underlying such Units by notifying the Agent of
such election and delivering the specific U.S.
Treasury security or securities (including the CUSIP
number and/or the principal terms of such security or
-52-
securities) identified by the Agent that constitute
the U.S. Treasury securities described in clauses (i)
and (ii) of the definition of Remarketing Value
relating to the retained Notes (as if only such Notes
were being remarketed) (the "Opt-out Treasury
Consideration") to the Agent not later than
10:00 a.m. on the fourth Business Day prior to the
Remarketing Date (or, in the case of a Failed
Remarketing, not later than 10:00 a.m. on the
Business Day immediately prior to the Subsequent
Remarketing Date). Upon receipt thereof by the
Agent, the Agent shall deliver such Opt-out Treasury
Consideration to the Collateral Agent, which will,
for the benefit of the Company, thereupon apply such
Opt-out Treasury Consideration to secure such
Holder's obligations under the Purchase Contracts.
On the first Business Day immediately preceding the
Remarketing Date, the Collateral Agent, pursuant to
the terms of the Pledge Agreement, will deliver the
Pledged Notes of such Holder to the Agent. Within
three Business Days following the Remarketing Date,
(A) if the remarketing was successful, the Agent
shall distribute such Notes to the Holders thereof,
and (B) if there was a Failed Remarketing on such
date, the Agent will deliver such Notes to the
Collateral Agent, which will, for the benefit of the
Company, thereupon apply such Notes to secure such
Holders' obligations under the Purchase Contract and
return the Opt-out Treasury Consideration delivered
by such Holders to such Holders. A Holder that does
not so deliver the Opt-out Treasury Consideration
pursuant to this clause (iv) shall be deemed to have
elected to participate in the remarketing.
(c) Upon the maturity of the Pledged Treasury
Securities underlying the Stripped Units and the Pledged
Treasury Consideration or Pledged Applicable Ownership
Interest in the Treasury Portfolio, as the case may be,
underlying the Normal Units, on the Stock Purchase Date,
the Collateral Agent shall remit to the Company an amount
equal to the aggregate Purchase Price applicable to such
Units, as payment for the Common Stock issuable upon
settlement thereof without receiving any instructions from
the Holders of such Units. In the event the payments in
respect of the Pledged Treasury Securities, Pledged
Treasury Consideration or Pledged Applicable Ownership
Interest in the Treasury Portfolio underlying a Unit is in
excess of the Purchase Price of the Purchase Contract
being settled thereby, the Collateral Agent will
distribute such excess to the Agent for the benefit of the
Holder of such Unit when received.
-53-
(d) Any distribution to Holders of excess funds
and interest described in Section 5.4(b) and (c) above
shall be payable at the office of the Agent in The City of
New York maintained for that purpose or, at the option of
the Holder or the holder of Separate Notes, as applicable,
by check mailed to the address of the Person entitled
thereto at such address as it appears on the Register or
by wire transfer to an account specified by the Holder or
the holder of Separate Notes, as applicable.
(e) [The obligations of each Holder to pay the
Purchase Price are non- recourse obligations and except to
the extent paid by Early Settlement or Merger Early
Settlement, are payable solely out of the proceeds of any
Collateral pledged to secure the obligations of the
Holders and in no event will Holders be liable for any
deficiency between such payments and the Purchase Price.]
(f) [Notwithstanding anything to the contrary
herein, the Company shall not be obligated to issue any
Common Stock in respect of a Purchase Contract or deliver
any certificates therefor to the Holder of the related
Unit unless the Company shall have received payment in
full of the aggregate Purchase Price for the shares of
Common Stock to be purchased thereunder by such Holder in
the manner herein set forth.]
(g) In the event of a successful remarketing,
the interest rate on all of the outstanding Notes (whether
or not included in the remarketing) shall be adjusted to
the Reset Rate.
SECTION 5.5 ISSUANCE OF SHARES OF COMMON STOCK.
Unless a Termination Event shall have occurred on or
prior to the Stock Purchase Date or an Early Settlement or a
Merger Early Settlement shall have occurred, on the Stock
Purchase Date, upon its receipt of payment for the shares of
Common Stock purchased by the Holders pursuant to the foregoing
provisions of this Article and subject to Section 5.6, the
Company shall issue and deposit with the Agent, for the benefit
of the Holders of the Outstanding Units, one or more
certificates representing the newly issued shares of Common
Stock registered in the name of the Agent (or its nominee) as
custodian for the Holders (such certificates for shares of
Common Stock, together with any dividends or distributions for
which a record date and payment date for such dividend or
distribution has occurred after the Stock Purchase Date, being
hereinafter referred to as the "Purchase Contract Settlement
Fund") to which the Holders are entitled hereunder. Subject to
the foregoing, upon surrender of a Certificate to the Agent on
-54-
or after the Stock Purchase Date, together with settlement
instructions thereon duly completed and executed, the Holder of
such Certificate shall be entitled to receive in exchange
therefor a certificate representing that number of whole shares
of Common Stock which such Holder is entitled to receive
pursuant to the provisions of this Article V (after taking into
account all Units then held by such Holder) together with cash
in lieu of fractional shares as provided in Section 5.12 and
any dividends or distributions with respect to such shares
constituting part of the Purchase Contract Settlement Fund, but
without any interest thereon, and the Certificate so
surrendered shall forthwith be cancelled. Such shares shall be
registered in the name of the Holder or the Holder's designee
as specified in the settlement instructions provided by the
Holder to the Agent. If any shares of Common Stock issued in
respect of a Purchase Contract are to be registered to a Person
other than the Person in whose name the Certificate evidencing
such Purchase Contract is registered, no such registration
shall be made unless the Person requesting such registration
has paid any transfer and other taxes required by reason of
such registration in a name other than that of the registered
Holder of such Certificate or has established to the
satisfaction of the Company that such tax either has been paid
or is not payable.
SECTION 5.6 ADJUSTMENT OF SETTLEMENT RATE.
(a) Adjustments for Dividends, Distributions,
Stock Splits, Etc.
(1) Stock Dividends. In case the Company
shall pay or make a dividend or other distribution on
the Common Stock in Common Stock, the Settlement
Rate, as in effect at the opening of business on the
day following the date fixed for the determination of
stockholders entitled to receive such dividend or
other distribution shall be increased by dividing
such Settlement Rate by a fraction of which the
numerator shall be the number of shares of Common
Stock outstanding at the close of business on the
date fixed for such determination and the denominator
shall be the sum of such number of shares and the
total number of shares constituting such dividend or
other distribution, such increase to become effective
immediately after the opening of business on the day
following the date fixed for such determination. For
the purposes of this paragraph (1), the number of
shares of Common Stock at the time outstanding shall
not include shares held in the treasury of the
Company but shall include any shares issuable in
respect of any scrip certificates issued in lieu of
-55-
fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the
Company.
(2) Stock Purchase Rights. In case the
Company shall issue rights, options or warrants to
all holders of its Common Stock (not being available
on an equivalent basis to Holders of the Units upon
settlement of the Purchase Contracts underlying such
Units) entitling them to subscribe for or purchase
shares of Common Stock at a price per share less than
the Current Market Price per share of the Common
Stock on the date fixed for the determination of
stockholders entitled to receive such rights, options
or warrants (other than pursuant to a dividend
reinvestment, share purchase or similar plan), the
Settlement Rate in effect at the opening of business
on the day following the date fixed for such
determination shall be increased by dividing such
Settlement Rate by a fraction, the numerator of which
shall be the number of shares of Common Stock
outstanding at the close of business on the date
fixed for such determination plus the number of
shares of Common Stock which the aggregate of the
offering price of the total number of shares of
Common Stock so offered for subscription or purchase
would purchase at such Current Market Price and the
denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on
the date fixed for such determination plus the number
of shares of Common Stock so offered for subscription
or purchase, such increase to become effective
immediately after the opening of business on the day
following the date fixed for such determination. For
the purposes of this paragraph (2), the number of
shares of Common Stock at any time outstanding shall
not include shares held in the treasury of the
Company but shall include any shares issuable in
respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company
shall not issue any such rights, options or warrants
in respect of shares of Common Stock held in the
treasury of the Company.
(3) Stock Splits; Reverse Splits. In case
outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares
of Common Stock, the Settlement Rate in effect at the
opening of business on the day following the day upon
which such subdivision or split becomes effective
-56-
shall be proportionately increased, and, conversely,
in case outstanding shares of Common Stock shall each
be combined into a smaller number of shares of Common
Stock, the Settlement Rate in effect at the opening
of business on the day following the day upon which
such combination becomes effective shall be
proportionately reduced, such increase or reduction,
as the case may be, to become effective immediately
after the opening of business on the day following
the day upon which such subdivision, split or
combination becomes effective.
(4) Debt or Asset Distributions. (i) In
case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock
evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants
referred to in paragraph (2) of this Section, any
dividend or distribution paid exclusively in cash and
any dividend, shares of capital stock of any class or
series, or similar equity interests, of or relating
to a subsidiary or other business unit in the case of
a Spin-Off referred to in the next paragraph, or
distribution referred to in paragraph (1) of this
Section), the Settlement Rate shall be adjusted so
that the same shall equal the rate determined by
dividing the Settlement Rate in effect immediately
prior to the close of business on the date fixed for
the determination of stockholders entitled to receive
such distribution by a fraction, the numerator of
which shall be the Current Market Price per share of
the Common Stock on the date fixed for such
determination less the then fair market value (as
determined by the Board of Directors, whose
determination shall be conclusive and described in a
Board Resolution filed with the Agent) of the portion
of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock
and the denominator of which shall be such Current
Market Price per share of the Common Stock, such
adjustment to become effective immediately prior to
the opening of business on the day following the date
fixed for the determination of stockholders entitled
to receive such distribution. In any case in which
this paragraph (4) is applicable, paragraph (2) of
this Section shall not be applicable.
(ii) In the case of a Spin-Off, the
Settlement Rate in effect immediately before the
close of business on the record date fixed for
determination of stockholders entitled to receive
-57-
that distribution will be increased by multiplying
the Settlement Rate by a fraction, the numerator of
which is the Current Market Price per share of the
Common Stock plus the Fair Market Value of the
portion of those shares of Capital Stock or similar
equity interests so distributed applicable to one
share of Common Stock and the denominator of which is
the Current Market Price per share of the Common
Stock. Any adjustment to the settlement rate under
this paragraph 4(ii) will occur at the earlier of (1)
the tenth Trading Day from, and including, the
effective date of the Spin-Off and (2) the date of
the securities being offered in the Initial Public
Offering of the Spin-Off, if that Initial Public
Offering is effected simultaneously with the Spin-
Off.
(5) Cash Distributions. In case the
Company shall, (i) by dividend or otherwise,
distribute to all holders of its Common Stock cash
(excluding any cash that is distributed in a
Reorganization Event to which Section 5.6(b) applies
or as part of a distribution referred to in
paragraph (4) of this Section) in an aggregate amount
that, combined together with (ii) the aggregate
amount of any other distributions to all holders of
its Common Stock made exclusively in cash within the
12 months preceding the date of payment of such
distribution and in respect of which no adjustment
pursuant to this paragraph (5) or paragraph (6) of
this Section has been made and (iii) the aggregate of
any cash plus the fair market value as of the date of
the expiration of the tender or exchange offer
referred to below (as determined by the Board of
Directors, whose determination shall be conclusive
and described in a Board Resolution) of consideration
payable in respect of any tender or exchange offer by
the Company or any of its subsidiaries for all or any
portion of the Common Stock concluded within the
12 months preceding the date of payment of the
distribution described in clause (i) above and in
respect of which no adjustment pursuant to this
paragraph (5) or paragraph (6) of this Section has
been made, exceeds 15% of the product of the Current
Market Price per share of the Common Stock on the
date for the determination of holders of shares of
Common Stock entitled to receive such distribution
times the number of shares of Common Stock
outstanding on such date, then, and in each such
case, immediately after the close of business on such
date for determination, the Settlement Rate shall be
-58-
increased so that the same shall equal the rate
determined by dividing the Settlement Rate in effect
immediately prior to the close of business on the
date fixed for determination of the stockholders
entitled to receive such distribution by a fraction
(A) the numerator of which shall be equal to the
Current Market Price per share of the Common Stock on
the date fixed for such determination less an amount
equal to the quotient of (x) the combined amount
distributed or payable in the transactions described
in clauses (i), (ii) and (iii) above and (y) the
number of shares of Common Stock outstanding on such
date for determination and (B) the denominator of
which shall be equal to the Current Market Price per
share of the Common Stock on such date for
determination.
(6) Tender Offers. In case (i) a tender
or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of
the Common Stock shall expire and such tender or
exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders
(based on the acceptance (up to any maximum specified
in the terms of the tender or exchange offer) of
Purchased Shares) of an aggregate consideration
having a fair market value (as determined by the
Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) that
combined together with (ii) the aggregate of the cash
plus the fair market value (as determined by the
Board of Directors, whose determination shall be
conclusive and described in a Board Resolution), as
of the expiration of such tender or exchange offer,
of consideration payable in respect of any other
tender or exchange offer, by the Company or any
subsidiary of the Company for all or any portion of
the Common Stock expiring within the 12 months
preceding the expiration of such tender or exchange
offer and in respect of which no adjustment pursuant
to paragraph (5) of this Section or this
paragraph (6) has been made and (iii) the aggregate
amount of any distributions to all holders of the
Company's Common Stock made exclusively in cash
within the 12 months preceding the expiration of such
tender or exchange offer and in respect of which no
adjustment pursuant to paragraph (5) of this
Section or this paragraph (6) has been made, exceeds
15% of the product of the Current Market Price per
share of the Common Stock as of the last time (the
"Expiration Time") tenders could have been made
-59-
pursuant to such tender or exchange offer (as it may
be amended) times the number of shares of Common
Stock outstanding (including any tendered shares) on
the Expiration Time, then, and in each such case,
immediately prior to the opening of business on the
day after the date of the Expiration Time, the
Settlement Rate shall be adjusted so that the same
shall equal the rate determined by dividing the
Settlement Rate immediately prior to the close of
business on the date of the Expiration Time by a
fraction (A) the numerator of which shall be equal to
(x) the product of (I) the Current Market Price per
share of the Common Stock on the date of the
Expiration Time and (II) the number of shares of
Common Stock outstanding (including any tendered
shares) on the Expiration Time less (y) the amount of
cash plus the fair market value (determined as
aforesaid) of the aggregate consideration payable to
stockholders based on the transactions described in
clauses (i), (ii) and (iii) above (assuming in the
case of clause (i) the acceptance, up to any maximum
specified in the terms of the tender or exchange
offer, of Purchased Shares), and (B) the denominator
of which shall be equal to the product of (x) the
Current Market Price per share of the Common Stock as
of the Expiration Time and (y) the number of shares
of Common Stock outstanding (including any tendered
shares) as of the Expiration Time less the number of
all shares validly tendered and not withdrawn as of
the Expiration Time (the shares deemed so accepted,
up to any such maximum, being referred to as the
"Purchased Shares").
(7) Reclassification. The
reclassification of Common Stock into securities
including securities other than Common Stock (other
than any reclassification upon a Reorganization Event
to which Section 5.6(b) applies) shall be deemed to
involve (i) a distribution of such securities other
than Common Stock to all holders of Common Stock (and
the effective date of such reclassification shall be
deemed to be "the date fixed for the determination of
stockholders entitled to receive such distribution"
and the "date fixed for such determination" within
the meaning of paragraph (4) of this Section), and
(ii) a subdivision, split or combination, as the case
may be, of the number of shares of Common Stock
outstanding immediately prior to such
reclassification into the number of shares of Common
Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be
-60-
deemed to be "the day upon which such subdivision or
split becomes effective" or "the day upon which such
combination becomes effective," as the case may be,
and "the day upon which such subdivision, split or
combination becomes effective" within the meaning of
paragraph (3) of this Section).
(8) "Current Market Price". The "Current
Market Price" of the Common Stock means (a) on any
day the average of the Sales Prices for the 5
consecutive Trading Day preceding the earlier of the
day preceding the day in question and the day before
the "ex date" with respect to the issuance or
distribution requiring computation, (b) in the case
of any Spin-Off that is effected simultaneously with
and Initial Public Offering of the securities being
distributed in the Spin-Off, the Sale Price of the
Common Stock on the Trading Day on which the initial
public offering price of the securities being
distributed in the Spin-Off is determined, and (c) in
the case of any other Spin-Off, the average of the
Sale Prices of the Common Stock over the first 10
Trading Days after the effective date of such Spin-
Off. For purposes of this paragraph, the term "ex date,"
when used with respect to any issuance or distribution,
shall mean the first date on which the Common Stock trades
regular way on such exchange or in such market without the
right to receive such issuance or distribution.
(9) Calculation of Adjustments. All
adjustments to the Settlement Rate shall be calculated to
the nearest 1/10,000th of a share of Common Stock (or if
there is not a nearest 1/10,000th of a share to the next
lower 1/10,000th of a share). No adjustment in the
Settlement Rate shall be required unless such adjustment
would require an increase or decrease of at least one
percent therein; provided, that any adjustments which by
reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment. If an adjustment is made to the
Settlement Rate pursuant to paragraph (1), (2), (3), (4),
(5), (6), (7) or (10) of this Section 5.6(a), an
adjustment shall also be made to the Applicable Market
Value solely to determine which of clauses (i), (ii) or
(iii) of the definition of Settlement Rate in
Section 5.1(a) will apply on the Stock Purchase Date.
Such adjustment shall be made by multiplying the
Applicable Market Value by a fraction, the numerator of
which shall be the Settlement Rate immediately after such
-61-
adjustment pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of this Section 5.6(a) and the
denominator of which shall be the Settlement Rate
immediately before such adjustment; provided, that if such
adjustment to the Settlement Rate is required to be made
pursuant to the occurrence of any of the events
contemplated by paragraph (1), (2), (3), (4), (5), (7) or
(10) of this Section 5.6(a) during the period taken into
consideration for determining the Applicable Market Value,
appropriate and customary adjustments shall be made to the
Settlement Rate.
(10) Increase of Settlement Rate. The Company
may make such increases in the Settlement Rate, in
addition to those required by this Section, as it
considers to be advisable in order to avoid or diminish
any income tax to any holders of shares of Common Stock
resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe
for stock or from any event treated as such for income tax
purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or
Other Reorganization Event.
In the event of
(1) any consolidation or merger of the
Company with or into another Person (other than a
merger or consolidation in which the Company is the
continuing corporation and in which the Common Stock
outstanding immediately prior to the merger or
consolidation is not exchanged for cash, securities
or other property of the Company or another
corporation),
(2) any sale, transfer, lease or
conveyance to another Person of the property of the
Company as an entirety or substantially as an
entirety,
(3) any statutory exchange of securities
of the Company with another Person (other than in
connection with a merger or acquisition), or
(4) any liquidation, dissolution or
winding up of the Company other than as a result of
or after the occurrence of a Termination Event
(any such event, a "Reorganization Event"),
-62-
each share of Common Stock covered by each Purchase Contract
forming a part of a Unit immediately prior to such Reorganization
Event shall, after such Reorganization Event, be converted for
purposes of the Purchase Contract into the kind and amount of
securities, cash and other property receivable in such
Reorganization Event (without any interest thereon, and without
any right to dividends or distribution thereon which have a
record date that is prior to the Stock Purchase Date) per share
of Common Stock by a holder of Common Stock that (i) is not a
Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such
sale or transfer was made, as the case may be (any such Person, a
"Constituent Person"), or an Affiliate of a Constituent Person to
the extent such Reorganization Event provides for different
treatment of Common Stock held by Affiliates of the Company and
non-Affiliates , and (ii) failed to exercise his rights of
election, if any, as to the kind or amount of securities, cash
and other property receivable upon such Reorganization Event
(provided that if the kind or amount of securities, cash and
other property receivable upon such Reorganization Event is not
the same for each share of Common Stock held immediately prior to
such Reorganization Event by other than a Constituent Person or
an Affiliate thereof and in respect of which such rights of
election shall not have been exercised ("Non-electing Share"),
then for the purpose of this Section the kind and amount of
securities, cash and other property receivable upon such
Reorganization Event by each Non-electing Share shall be deemed
to be the kind and amount so receivable per share by a plurality
of the Non-electing Shares) . On the Stock Purchase Date, the
Settlement Rate then in effect will be applied to the value on
the Stock Purchase Date of such securities, cash or other
property.
-63-
In the event of such a Reorganization Event, the
Person formed by such consolidation, merger or exchange or the
Person which acquires the assets of the Company or, in the
event of a liquidation or dissolution of the Company, the
Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Agent an agreement
supplemental hereto providing that the Holder of each
Outstanding Unit shall have the rights provided by this
Section 5.6. Such supplemental agreement shall provide for
adjustments which, for events subsequent to the effective date
of such supplemental agreement, shall be as nearly equivalent
as may be practicable to the adjustments provided for in this
Section. The above provisions of this Section shall similarly
apply to successive Reorganization Events.
SECTION 5.7 NOTICE OF ADJUSTMENTS AND CERTAIN OTHER
EVENTS.
(a) Whenever the Settlement Rate is adjusted as
herein provided, the Company shall:
(i) forthwith compute the Settlement
Rate and the Applicable Market Value in accordance
with Section 5.6 and prepare and transmit to the
Agent an Officer's Certificate setting forth the
Settlement Rate and the Applicable Market Value, the
method of calculation thereof in reasonable detail,
and the facts requiring such adjustment and upon
which such adjustment is based; and
(ii) as soon as practicable following
the occurrence of an event that requires an
adjustment to the Settlement Rate pursuant to
Section 5.6 (or if the Company is not aware of such
occurrence, as soon as practicable after becoming so
aware), provide a written notice to the Holders of
the Units of the occurrence of such event and a
statement in reasonable detail setting forth the
method by which the adjustment to the Settlement Rate
and the Applicable Market Value was determined and
setting forth the adjusted Settlement Rate and the
Applicable Market Value.
(b) The Agent shall not at any time be under
any duty or responsibility to any Holder of Units to
determine whether any facts exist which may require any
adjustment of the Settlement Rate and the Applicable
Market Value, or with respect to the nature or extent or
calculation of any such adjustment when made, or with
respect to the method employed in making the same. The
Agent shall not be accountable with respect to the
-64-
validity or value (or the kind or amount) of any shares of
Common Stock, or of any securities or property, which may
at the time be issued or delivered with respect to any
Purchase Contract; and the Agent makes no representation
with respect thereto. The Agent shall not be responsible
for any failure of the Company to issue, transfer or
deliver any shares of Common Stock pursuant to a Purchase
Contract or to comply with any of the duties,
responsibilities or covenants of the Company contained in
this Article.
SECTION 5.8 TERMINATION EVENT; NOTICE.
The Purchase Contracts and all obligations and rights
of the Company and the Holders thereunder, including the rights
and obligations of Holders to purchase Common Stock, shall
immediately and automatically terminate, without the necessity
of any notice or action by any Holder, the Agent or the
Company, if, on or prior to the Stock Purchase Date, a
Termination Event shall have occurred. Upon and after the
occurrence of a Termination Event, the Normal Units shall
thereafter represent the right to receive the Notes or the
appropriate Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, forming
a part of such Normal Units, and the Stripped Units shall
thereafter represent the right to receive the Treasury
Securities forming a part of such Stripped Units, in each case
in accordance with the provisions of Section 4.3 of the Pledge
Agreement. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business
Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they
appear in the Register.
SECTION 5.9 EARLY SETTLEMENT.
(a) Subject to and upon compliance with the
provisions of this Section 5.9, Purchase Contracts
underlying Units having an aggregate Stated Amount equal
to $1,000 or an integral multiple thereof, may, at the
option of the Holder thereof, be settled early ("Early
Settlement") on or prior to 10:00 a.m. on the seventh
Business Day immediately preceding the Stock Purchase
Date. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts, the
Holder of the Certificate evidencing the related Units
shall deliver such Certificate to the Agent at the
Corporate Trust Office duly endorsed for transfer to the
Company or in blank with the form of Election to Settle
Early on the reverse thereof duly completed and
accompanied by payment payable to the Company in
-65-
immediately available funds in an amount (the "Early
Settlement Amount") equal to (A) the product of (i) the
Stated Amount of such Units multiplied by (ii) the number
of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement, plus (B) if such
delivery is made with respect to any Purchase Contracts
during the period from the close of business on any Record
Date next preceding any Payment Date to the opening of
business on such Payment Date, an amount equal to the
Contract Adjustment Payments, if any, payable on such
Payment Date with respect to such Purchase Contracts;
provided that no payment shall be required pursuant to
clause (B) of this sentence if the Company shall have
elected to defer the Contract Adjustment Payments which
would otherwise be payable on such Payment Date. Except
as provided in the immediately preceding sentence and
subject to Section 5.2(d), no payment or adjustment shall
be made upon Early Settlement of any Purchase Contract on
any Contract Adjustment Payments accrued on such Purchase
Contract or on account of any dividends on the Common
Stock issued upon such Early Settlement. If the foregoing
requirements are first satisfied with respect to Purchase
Contracts underlying any Unit at or prior to 5:00 p.m.,
New York City time, on a Business Day, such day shall be
the "Early Settlement Date" with respect to such Unit and
if such requirements are first satisfied after 5:00 p.m.,
New York City time, on a Business Day or on a day that is
not a Business Day, the "Early Settlement Date" with
respect to such Units shall be the next succeeding
Business Day.
(b) Upon Early Settlement of any Purchase
Contract by the Holder of the related Units, the Company
shall issue, and the Holder shall be entitled to receive,
___ shares of Common Stock on account of such Purchase
Contract (the "Early Settlement Rate"). The Early
Settlement Rate shall be adjusted in the same manner and
at the same time as the Settlement Rate is adjusted. As
promptly as practicable after Early Settlement of Purchase
Contracts in accordance with the provisions of this
Section 5.9, the Company shall issue and shall deliver to
the Agent at the Corporate Trust Office a certificate or
certificates for the full number of shares of Common Stock
issuable upon such Early Settlement together with payment
in lieu of any fraction of a share, as provided in
Section 5.12.
(c) No later than the third Business Day after
the applicable Early Settlement Date the Company shall
cause (i) the shares of Common Stock issuable upon Early
Settlement of Purchase Contracts to be issued and
-66-
delivered, and (ii) the related Pledged Notes or Pledged
Treasury Consideration or Pledged Applicable Ownership
Interest in the Treasury Portfolio, in the case of Normal
Units, or the related Pledged Treasury Securities, in the
case of Stripped Units, to be released from the Pledge by
the Collateral Agent and transferred, in each case, to the
Agent for delivery to the Holder thereof or the Holder's
designee.
(d) Upon Early Settlement of any Purchase
Contracts, and subject to receipt of shares of Common
Stock from the Company and the Pledged Notes, Pledged
Treasury Consideration, Pledged Applicable Ownership
Interest in the Treasury Portfolio, or Pledged Treasury
Securities, as the case may be, from the Collateral Agent,
as applicable, the Agent shall, in accordance with the
instructions provided by the Holder thereof on the
applicable form of Election to Settle Early on the reverse
of the Certificate evidencing the related Units,
(i) transfer to the Holder the Pledged Notes, Pledged
Treasury Consideration, Pledged Applicable Ownership
Interest in the Treasury Portfolio, or Pledged Treasury
Securities, as the case may be, forming a part of such
Units, and (ii) deliver to the Holder a certificate or
certificates for the full number of shares of Common Stock
issuable upon such Early Settlement together with payment
in lieu of any fraction of a share, as provided in
Section 5.12.
(e) In the event that Early Settlement is
effected with respect to Purchase Contracts underlying
less than all the Units evidenced by a Certificate, upon
such Early Settlement the Company shall execute and the
Agent shall authenticate, execute and deliver to the
Holder thereof, at the expense of the Company, a
Certificate evidencing the Units as to which Early
Settlement was not effected.
SECTION 5.10 EARLY SETTLEMENT UPON MERGER.
(a) In the event of a merger or consolidation
of the Company of the type described in clause (1) of
Section 5.6(b) in which the Common Stock outstanding
immediately prior to such merger or consolidation is
exchanged for consideration consisting of at least 30%
cash or cash equivalents (any such event a "Cash Merger"),
then the Company (or the successor to the Company
hereunder) shall be required to offer the Holder of each
Unit the right to settle the Purchase Contract underlying
such Unit prior to the Stock Purchase Date ("Merger Early
Settlement") as provided herein. On or before the fifth
-67-
Business Day after the consummation of a Cash Merger, the
Company or, at the request and expense of the Company, the
Agent, shall give all Holders notice of the occurrence of
the Cash Merger and of the right of Merger Early
Settlement arising as a result thereof. The Company shall
also deliver a copy of such notice to the Agent and the
Collateral Agent.
Each such notice shall contain:
(i) the date, which shall be not less
than 20 nor more than 30 calendar days after the date
of such notice, on which the Merger Early Settlement
will be effected (the "Merger Early Settlement
Date");
(ii) the date, which shall be on or
one Business Day prior to the Merger Early Settlement
Date, by which the Merger Early Settlement right must
be exercised;
(iii) the Settlement Rate in effect as
a result of such Cash Merger and the kind and amount
of securities, cash and other property receivable by
the Holder upon settlement of each Purchase Contract
pursuant to Section 5.6(b);
(iv) a statement to the effect that
all or a portion of the Purchase Price payable by the
Holder to settle the Purchase Contract will be offset
against the amount of cash so receivable upon
exercise of Merger Early Settlement, as applicable;
and
(v) the instructions a Holder must
follow to exercise the Merger Early Settlement right.
(b) To exercise a Merger Early Settlement
right, a Holder shall deliver to the Agent at the
Corporate Trust Office on or before 5:00 p.m., New York
City time on the date specified in the notice the
Certificate(s) evidencing the Units with respect to which
the Merger Early Settlement right is being exercised duly
endorsed for transfer to the Company or in blank with the
form of Election to Settle Early on the reverse thereof
duly completed and accompanied by payment payable to the
Company in immediately available funds in an amount equal
to the Early Settlement Amount less the amount of cash
that otherwise would be deliverable by the Company or its
successor upon settlement of the Purchase Contract in lieu
of Common Stock pursuant to Section 5.6(b) and as
-68-
described in the notice to Holders (the "Merger Early
Settlement Amount").
(c) On the Merger Early Settlement Date, the
Company shall deliver or cause to be delivered (i) the net
cash, securities and other property to be received by such
exercising Holder, equal to the Settlement Rate as
adjusted pursuant to Section 5.6, in respect of the number
of Purchase Contracts for which such Merger Early
Settlement right was exercised, and (ii) the related
Pledged Notes, Pledged Treasury Consideration or Pledged
Applicable Ownership Interest in the Treasury Portfolio,
in the case of Normal Units, or Pledged Treasury
Securities, in the case of Stripped Units, to be released
from the Pledge by the Collateral Agent and transferred,
in each case, to the Agent for delivery to the Holder
thereof or its designee. In the event a Merger Early
Settlement right shall be exercised by a Holder in
accordance with the terms hereof, all references herein to
Stock Purchase Date shall be deemed to refer to such
Merger Early Settlement Date.
(d) Upon Merger Early Settlement of any
Purchase Contracts, and subject to receipt of such net
cash, securities or other property from the Company and
the Pledged Notes, Pledged Treasury Consideration, Pledged
Applicable Ownership Interest in the Treasury Portfolio or
Pledged Treasury Securities, as the case may be, from the
Collateral Agent, as applicable, the Agent shall, in
accordance with the instructions provided by the Holder
thereof on the applicable form of Election to Settle Early
on the reverse of the Certificate evidencing the related
Units, (i) transfer to the Holder the Pledged Notes,
Pledged Treasury Consideration, Pledged Applicable
Ownership Interest in the Treasury Portfolio, or Pledged
Treasury Securities, as the case may be, forming a part of
such Units, and (ii) deliver to the Holder such net cash,
securities or other property issuable upon such Merger
Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.12.
(e) In the event that Merger Early Settlement
is effected with respect to Purchase Contracts underlying
less than all the Units evidenced by a Certificate, upon
such Merger Early Settlement the Company (or the successor
to the Company hereunder) shall execute and the Agent
shall authenticate, execute and deliver to the Holder
thereof, at the expense of the Company, a Certificate
evidencing the Units as to which Merger Early Settlement
was not effected.
-69-
SECTION 5.11 CHARGES AND TAXES.
The Company will pay all stock transfer and similar
taxes attributable to the initial issuance and delivery of the
shares of Common Stock pursuant to the Purchase Contracts and
in payment of any Deferred Contract Adjustment Payments;
provided, that the Company shall not be required to pay any
such tax or taxes which may be payable in respect of any
exchange of or substitution for a Certificate evidencing a Unit
or any issuance of a share of Common Stock in a name other than
that of the registered Holder of a Certificate surrendered in
respect of the Units evidenced thereby, other than in the name
of the Agent, as custodian for such Holder, and the Company
shall not be required to issue or deliver such share
certificates or Certificates unless and until the Person or
Persons requesting the transfer or issuance thereof shall have
paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax
has been paid.
SECTION 5.12 NO FRACTIONAL SHARES.
No fractional shares or scrip representing fractional
shares of Common Stock shall be issued or delivered upon
settlement on the Stock Purchase Date or upon Early Settlement
or Merger Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall
be surrendered for settlement at one time by the same Holder,
the number of full shares of Common Stock which shall be
delivered upon settlement shall be computed on the basis of the
aggregate number of Purchase Contracts evidenced by the
Certificates so surrendered. Instead of any fractional share
of Common Stock which would otherwise be deliverable upon
settlement of any Purchase Contracts on the applicable
Settlement Date or upon Early Settlement or Merger Early
Settlement, the Company, through the Agent, shall make a cash
payment in respect of such fractional shares in an amount equal
to the value of such fractional shares times the Applicable
Market Value. The Company shall provide the Agent from time to
time with sufficient funds to permit the Agent to make all cash
payments required by this Section 5.12 in a timely manner.
ARTICLE VI.
REMEDIES
SECTION 6.1 UNCONDITIONAL RIGHT OF HOLDERS TO PURCHASE
COMMON STOCK.
The Holder of any Unit shall have the right, which is
absolute and unconditional,
-70-
(a) subject to the right of the Company to
defer payment thereof pursuant to Section 5.3, and to the
forfeiture of any Deferred Contract Adjustment Payments
upon Early Settlement pursuant to Section 5.9(a) or upon
Merger Early Settlement pursuant to Section 5.10 or upon
the occurrence of a Termination Event, to receive payment
of each installment of the Contract Adjustment Payments,
if any, with respect to the Purchase Contract constituting
a part of such Unit on the respective Payment Date for
such Unit, and
(b) to purchase Common Stock pursuant to the
Purchase Contract constituting a part of such Unit and to
institute suit for the enforcement of any such right to
purchase Common Stock, and such rights shall not be
impaired without the consent of such Holder.
SECTION 6.2 RESTORATION OF RIGHTS AND REMEDIES.
If any Holder has instituted any proceeding to
enforce any right or remedy under this Agreement and such
proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to such Holder, then and in
every such case, subject to any determination in such
proceeding, the Company and such Holder shall be restored
severally and respectively to their former positions hereunder
and thereafter all rights and remedies of such Holder shall
continue as though no such proceeding had been instituted.
SECTION 6.3 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Certificates in the last paragraph of Section 3.10, no right or
remedy herein conferred upon or reserved to the Holders is
intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 6.4 DELAY OR OMISSION NOT WAIVER.
No delay or omission of any Holder to exercise any
right or remedy upon a default shall impair any such right or
remedy or constitute a waiver of any such right. Every right
and remedy given by this Article or by law to the Holders may
be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
-71-
SECTION 6.5 UNDERTAKING FOR COSTS.
All parties to this Agreement agree, and each Holder
of a Unit, by its acceptance of such Unit shall be deemed to
have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this
Agreement, or in any suit against the Agent for any action
taken, suffered or omitted by it as Agent, the filing by any
party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against
any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such
party litigant; provided that the provisions of this
Section shall not apply to any suit instituted by the Company,
to any suit instituted by the Agent, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more
than 10% of the Outstanding Units, or to any suit instituted by
any Holder for the enforcement of distributions on any Notes on
any Purchase Contract on or after the respective Payment Date
therefor in respect of any Unit held by such Holder, or for
enforcement of the right to purchase shares of Common Stock
under the Purchase Contract constituting part of any Unit held
by such Holder.
SECTION 6.6 WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the
covenants or the performance of this Agreement; and the Company
(to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, but will
suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE VII.
THE AGENT
SECTION 7.1 CERTAIN DUTIES, RIGHTS AND IMMUNITIES.
(a) The Agent shall act as agent for the
Holders of the Units hereunder with such powers as are
specifically vested in the Agent by the terms of this
Agreement, the Pledge Agreement, the Remarketing
Agreement, the Notes and the Units, and any documents
evidencing thereof or related thereto (the "Transaction
-72-
Documents"), together with such other powers as are
reasonably incidental thereto. The Agent:
(1) shall have no duties or
responsibilities except those expressly set forth in
the Transaction Documents and no implied covenants or
obligations shall be inferred from any Transaction
Documents against the Agent, nor shall the Agent be
bound by the provisions of any agreement by any party
hereto beyond the specific terms hereof;
(2) shall be entitled conclusively to rely
upon (x) any certification, order, judgment, opinion,
notice or other communication (including, without
limitation, any thereof by telephone or facsimile)
reasonably believed by it to be genuine and correct
and to have been signed or sent by or on behalf of
the proper Person or Persons (without being required
to determine the correctness of any fact stated
therein), (y) the truth of the statements and the
correctness of the opinions expressed therein and (z)
advice and statements of legal counsel and other
experts selected by the Agent;
(3) as to any matters not expressly
provided for by any Transaction Document, shall in
all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in
accordance with instructions given by the Company or
the Holders in accordance with the Transaction
Documents;
(4) shall not be responsible for any
recitals contained in any Transaction Document, or in
any certificate or other document referred to or
provided for in, or received by it under, any
Transaction Document or the Units, or for the value,
validity, effectiveness, genuineness, enforceability
or sufficiency of any Transaction Document (other
than as against the Agent) or the Units or any other
document referred to or provided for herein or
therein or for any failure by the Company, any Holder
or any other Person (except the Agent) to perform any
of its obligations hereunder or thereunder or for the
perfection, priority or, except as expressly required
hereby, existence, validity, perfection or
maintenance of any security interest created under
the Pledge Agreement, or for the use or application
by the Company of the proceeds in respect of the
Purchase Contracts;
-73-
(5) shall not be required to initiate
or conduct any litigation or collection proceedings
hereunder;
(6) shall not be responsible for any
action taken or omitted to be taken by it hereunder
or under any other document or instrument referred to
or provided for herein or in connection herewith or
therewith, except for its own gross negligence, bad
faith or willful misconduct; and
(7) shall not be required to advise
any party as to selling or retaining, or taking or
refraining from taking any action with respect to,
the Units or other rights under any Transaction
Document.
(b) No provision of any Transaction Document
shall be construed to relieve the Agent from liability for
its own negligent action, its own negligent failure to
act, its own bad faith, or its own willful misconduct,
except that:
(1) this paragraph (b) shall not be
construed to limit the effect of paragraph (a) of
this Section;
(2) the Agent shall not be liable for any
error of judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Agent was
grossly negligent in ascertaining the pertinent
facts; and
(3) in no event shall the Agent be
required to expend or risk its own funds or
otherwise incur any financial liability in the
performance of any of its duties hereunder.
(c) In no event shall the Agent or its
officers, employees or agents be liable for any special,
indirect, individual, punitive or consequential loss or
damages, lost profits or loss of business, arising in
connection with any Transaction Document, whether or not
the likelihood of such loss or damage was known to the
Agent, incurred without any act or deed that is found to
be attributable to gross negligence, bad faith or willful
misconduct on the part of the Agent.
(d) Whether or not therein expressly so
provided, every provision of every Transaction Document
relating to the conduct or affecting the liability of or
-74-
affording protection to the Agent shall be subject to the
provisions of this Section.
(e) The Agent is authorized to execute and
deliver the Pledge Agreement and the Remarketing Agreement
and any supplement thereto in its capacity as Agent.
(f) The Agent shall have no liability
whatsoever for the action or inaction of any Clearing
Agency or any book-entry system thereof. In no event
shall any Clearing Agency or any book-entry system thereof
be deemed an agent or subcustodian of the Agent.
(g) The Agent shall not be responsible or
liable for any failure or delay in the performance of its
obligations under any Transaction Document arising out of
or caused, directly or indirectly, by circumstances beyond
its reasonable control, including, without limitation,
acts of God; acts of terrorism; earthquakes; fires;
floods; wars; civil or military disturbances; sabotage;
epidemics; riots; interruptions, loss or malfunctions of
utilities, computer (hardware or software) or
communications service; accidents; labor disputes; acts of
civil or military authority; governmental actions; or
inability to obtain labor, material, equipment or
transportation.
SECTION 7.2 NOTICE OF DEFAULT.
Within 30 days after the occurrence of any default by
the Company hereunder of which a Responsible Officer of the
Agent has actual knowledge, the Agent shall transmit by mail to
the Company and the Holders of Units, as their names and
addresses appear in the Register, notice of such default
hereunder, unless such default shall have been cured or waived.
SECTION 7.3 CERTAIN RIGHTS OF AGENT.
Subject to the provisions of Section 7.1:
(a) any request or direction of the Company
mentioned herein shall be sufficiently evidenced by an
Officer's Certificate, Issuer Order or Issuer Request, and
any resolution of the Board of Directors of the Company
may be sufficiently evidenced by a Board Resolution;
(b) whenever in the administration of this
Agreement the Agent shall deem it desirable that a matter
be proved or established prior to taking, suffering or
omitting any action hereunder, the Agent (unless other
evidence be herein specifically prescribed) may, in the
-75-
absence of bad faith on its part, rely upon an Officer's
Certificate of the Company;
(c) the Agent may consult with counsel and the
written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(d) the Agent shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Agent, in its discretion, may
make reasonable further inquiry or investigation into such
facts or matters related to the execution, delivery and
performance of the Purchase Contracts as it may see fit,
and, if the Agent shall determine to make such further
inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of
the Company, personally or by agent or attorney; and
(e) the Agent may execute any of the powers
hereunder or perform any duties hereunder either directly
or by or through agents or attorneys or an Affiliate of
the Agent and the Agent shall not be responsible for any
misconduct or negligence on the part of any agent or
attorney or an Affiliate appointed with due care by it
hereunder.
SECTION 7.4 NOT RESPONSIBLE FOR RECITALS, ETC.
The recitals contained herein and in the Certificates
shall be taken as the statements of the Company.
SECTION 7.5 MAY HOLD UNITS AND OTHER DEALINGS.
Any Registrar or any other agent of the Company, or
the Agent and its Affiliates, in their individual or any other
capacity, may become the owner or pledgee of Units and may
otherwise deal with the Company, the Collateral Agent or any
other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent. The Agent and its
Affiliates may (without having to account therefor to the
Company or any Holder of Units or holder of Separate Notes)
accept deposits from, lend money to, make their investments in
and generally engage in any kind of banking, trust or other
business with the Company, any Holder of Units and any holder
of Separate Notes (and any of their respective subsidiaries or
Affiliates) as if it were not acting as the Agent and the Agent
-76-
and their Affiliates may accept fees and other consideration
from the Company, any Holder of Units or any holder of Separate
Notes without having to account for the same to any such
Person.
SECTION 7.6 MONEY HELD IN CUSTODY.
Money held by the Agent in custody hereunder need not
be segregated from the Agent's other funds except to the extent
required by law or provided herein. The Agent shall be under
no obligation to invest or pay interest on any money received
by it hereunder except as otherwise agreed in writing with the
Company.
SECTION 7.7 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(a) to pay to the Agent from time to time
compensation for all services rendered by it hereunder or
under the Transaction Documents as shall be agreed in
writing between the Company and the Agent;
(b) to reimburse the Agent upon its request for
all reasonable expenses, disbursements and advances
incurred or made by the Agent in accordance with any
provision of this Agreement or the Transaction Documents
(including the reasonable compensation and the reasonable
expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be
attributable to its negligence, willful misconduct or bad
faith; and
(c) to indemnify the Agent and any predecessor
Agent for, and to hold it harmless against, any loss,
liability or reasonable out-of-pocket expense incurred
without gross negligence, willful misconduct or bad faith
on its part, arising out of or in connection with the
acceptance or administration of its duties under the
Transaction Documents, including the costs and expenses
(including reasonable fees and expenses of counsel) of
defending itself against any claim or liability in
connection with the exercise or performance of any of its
powers or duties under the Transaction Documents. The
Agent shall promptly notify the Company of any third party
claim which may give rise to the indemnity hereunder and
give the Company the opportunity to participate in the
defense of such claim with counsel reasonably satisfactory
to the indemnified party, and no such claim shall be
settled without the written consent of the Company, which
consent shall not be unreasonably withheld, provided that
-77-
any failure to give any such notice shall not affect the
obligation of the Company under this Section.
The provisions of this Section 7.7 shall survive the
termination of this Agreement or the resignation or removal of
the Agent.
SECTION 7.8 CORPORATE AGENT REQUIRED; ELIGIBILITY.
There shall at all times be an Agent hereunder which
shall be a corporation organized and doing business under the
laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to exercise
corporate trust powers, having (or being a member of a bank
holding company having) a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by
federal or state authority and having a Corporate Trust Office
in the Borough of Manhattan, The City of New York, if there be
such a corporation, qualified and eligible under this Article
and willing to act on reasonable terms. If such corporation
publishes reports of condition at least annually, pursuant to
law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the
Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the
manner and with the effect hereinafter specified in this
Article.
SECTION 7.9 RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR.
(a) No resignation or removal of the Agent and
no appointment of a successor Agent pursuant to this
Article shall become effective until the acceptance of
appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving
written notice thereof to the Company 60 days prior to the
effective date of such resignation. If the instrument of
acceptance by a successor Agent required by Section 7.10
shall not have been delivered to the Agent within 30 days
after the giving of such notice of resignation, the
resigning Agent may petition any court of competent
jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act
of the Holders of a majority in number of the Outstanding
Units delivered to the Agent and the Company.
-78-
(d) If at any time:
(1) the Agent fails to comply with
Section 310(b) of the TIA, as if the Agent were an
Trustee under an indenture qualified under the TIA,
after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Unit
for at least six months; or
(2) the Agent shall cease to be eligible
under Section 7.8 and shall fail to resign after
written request therefor by the Company or by any
such Holder; or
(3) the Agent shall become incapable of
acting or shall be adjudged a bankrupt or insolvent
or a receiver of the Agent or of its property shall
be appointed or any public officer shall take charge
or control of the Agent or of its property or affairs
for the purpose of rehabilitation, conservation or
liquidation;
then, in any such case, (x) the Company by a Board
Resolution may remove the Agent, or (y) any Holder who has been
a bona fide Holder of a Unit for at least six months may, on
behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the
Agent and the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in
the office of Agent for any cause, the Company, by a Board
Resolution, shall promptly appoint a successor Agent and
shall comply with the applicable requirements of
Section 7.10. If no successor Agent shall have been so
appointed by the Company and accepted appointment in the
manner required by Section 7.10, any Holder who has been a
bona fide Holder of a Unit for at least six months may, on
behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the
appointment of a successor Agent.
(f) The Company shall give, or shall cause such
successor Agent to give, notice of each resignation and
each removal of the Agent and each appointment of a
successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the applicable Register.
Each notice shall include the name of the successor Agent
and the address of its Corporate Trust Office.
-79-
SECTION 7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a
successor Agent, every such successor Agent so appointed
shall execute, acknowledge and deliver to the Company and
to the retiring Agent an instrument accepting such
appointment, and thereupon the resignation or removal of
the retiring Agent shall become effective and such
successor Agent, without any further act, deed or
conveyance, shall become vested with all the rights,
powers, agencies and duties of the retiring Agent; but, on
the request of the Company or the successor Agent, such
retiring Agent shall, upon payment of its charges, execute
and deliver an instrument transferring to such successor
Agent all the rights, powers and trusts of the retiring
Agent and duly assign, transfer and deliver to such
successor Agent all property and money held by such
retiring Agent hereunder.
(b) Upon request of any such successor Agent,
the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such
successor Agent all such rights, powers and agencies
referred to in paragraph (a) of this Section.
(c) No successor Agent shall accept its
appointment unless at the time of such acceptance such
successor Agent shall be qualified and eligible under this
Article.
SECTION 7.11 MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS.
Any corporation into which the Agent may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the
corporate trust business of the Agent, shall be the successor
of the Agent hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without
the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Certificates
shall have been authenticated and executed on behalf of the
Holders, but not delivered, by the Agent then in office, any
successor by merger, conversion or consolidation to such Agent
shall adopt such authentication and execution and deliver the
Certificates so authenticated and executed with the same effect
as if such successor Agent had itself authenticated and
executed such Units.
-80-
SECTION 7.12 PRESERVATION OF INFORMATION; COMMUNICATIONS
TO HOLDERS.
(a) The Agent shall preserve, in as current a
form as is reasonably practicable, the names and addresses
of Holders received by the Agent in its capacity as
Registrar.
(b) If three or more Holders (herein referred
to as "Applicants") apply in writing to the Agent, and
furnish to the Agent reasonable proof that each such
applicant has owned a Unit for a period of at least six
months preceding the date of such application, and such
application states that the applicants desire to
communicate with other Holders with respect to their
rights under this Agreement or under the Units and is
accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit,
then the Agent shall mail to all the Holders copies of the
form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to
the Agent of the materials to be mailed and of payment, or
provision, in the absence of bad faith, satisfactory to
the Agent for the payment, of the reasonable expenses of
such mailing.
SECTION 7.13 FAILURE TO ACT.
In the event of any ambiguity in the provisions of
any Transaction Document or any dispute between or conflicting
claims by or among the parties hereto or any other Person, the
Agent shall be entitled, after prompt notice to the Company and
the Holders of Units, at its sole option, to refuse to comply
with any and all such claims, demands or instructions so long
as such dispute or conflict shall continue, and the Agent shall
not be or become liable in any way to any of the parties hereto
for its failure or refusal to comply with such conflicting
claims, demands or instructions. The Agent shall be entitled
to refuse to act until either (i) such conflicting or adverse
claims or demands shall have been finally determined by a court
of competent jurisdiction or settled by agreement between the
conflicting parties as evidenced in a writing, reasonably
satisfactory to the Agent, or (ii) the Agent shall have
received security or an indemnity reasonably satisfactory to
the Agent sufficient to save the Agent harmless from and
against any and all loss, liability or reasonable out-of-pocket
expense which the Agent may incur by reason of its acting
without bad faith, willful misconduct or gross negligence. The
Agent may in addition elect to commence an interpleader action
-81-
or seek other judicial relief or orders as the Agent may deem
necessary. Notwithstanding anything contained herein to the
contrary, the Agent shall not be required to take any action
that is in its opinion contrary to law or to the terms of any
Transaction Document, or which would in its opinion subject it
or any of its officers, employees or directors to liability.
SECTION 7.14 NO OBLIGATIONS OF AGENT.
Except to the extent otherwise provided in this
Agreement, the Agent assumes no obligation and shall not be
subject to any liability under this Agreement, the Pledge
Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Unit thereunder. The Company
agrees, and each Holder of a Certificate, by such Holder's
acceptance thereof, shall be deemed to have agreed, that the
Agent's execution of the Certificates on behalf of the Holders
shall be solely as agent and attorney-in-fact for the Holders,
and that the Agent shall have no obligation to perform such
Purchase Contracts on behalf of the Holders, except to the
extent expressly provided in Article V.
SECTION 7.15 TAX COMPLIANCE.
(a) The Agent, on its own behalf and on behalf
of the Company, will comply with all applicable
certification, information reporting and withholding
(including "backup" withholding) requirements imposed on
it as a paying agent by applicable tax laws, regulations
or administrative practice with respect to any payments
made with respect to the Units. Such compliance shall
include, without limitation, the preparation and timely
filing of required returns and the timely payment of all
amounts required to be withheld to the appropriate taxing
authority or its designated agent.
(b) The Agent shall comply with any reasonable
written direction timely received from the Company with
respect to the application of such requirements to
particular payments or Holders or in other particular
circumstances, and may for purposes of this Agreement rely
on any such direction in accordance with the provisions of
Section 7.1(a)(2).
(c) The Agent shall maintain all appropriate
records documenting compliance with such requirements, and
shall make such records available, on written request, to
the Company or its authorized representative within a
reasonable period of time after receipt of such request.
-82-
ARTICLE VIII.
SUPPLEMENTAL AGREEMENTS
SECTION 8.1 SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF
HOLDERS.
Without the consent of any Holders, the Company and
the Agent, at any time and from time to time, may enter into
one or more agreements supplemental hereto, in form
satisfactory to the Company and the Agent, for any of the
following purposes:
(a) to evidence the succession of another
Person to the Company, and the assumption by any such
successor of the covenants of the Company herein and in
the Certificates; or
(b) to add to the covenants of the Company for
the benefit of the Holders, or to surrender any right or
power herein conferred upon the Company; or
(c) to evidence and provide for the acceptance
of appointment hereunder by a successor Agent; or
(d) to make provision with respect to the
rights of Holders pursuant to the requirements of
Section 5.6(b) or 5.10; or
(e) to cure any ambiguity, to correct or
supplement any provisions herein which may be inconsistent
with any other provisions herein, or to make any other
provisions with respect to such matters or questions
arising under this Agreement, provided such action shall
not adversely affect the interests of the Holders.
SECTION 8.2 SUPPLEMENTAL AGREEMENTS WITH CONSENT OF
HOLDERS.
(a) With the consent of the Holders of not less
than a majority of the outstanding Purchase Contracts
voting together as one class, by Act of said Holders
delivered to the Company and the Agent, the Company, when
authorized by a Board Resolution, and the Agent may enter
into an agreement or agreements supplemental hereto, in
form satisfactory to the Company and the Agent, for the
purpose of modifying in any manner the terms of the
Purchase Contracts, or the provisions of this Agreement or
the rights of the Holders in respect of the Units;
provided, that, except as contemplated herein, no such
supplemental agreement shall, without the consent of the
Holder of each Outstanding Unit affected thereby:
-83-
(1) change any Payment Date;
(2) change the amount or the type of
Collateral required to be Pledged to secure a
Holder's Obligations under the Purchase Contract,
impair the right of the Holder of any Purchase
Contract to receive distributions on the related
Collateral (except for the rights of Holders of
Normal Units to substitute the Treasury Securities
for the Pledged Notes, Pledged Treasury Consideration
or Pledged Applicable Ownership Interest in the
Treasury Portfolio, or the rights of holders of
Stripped Units to substitute Notes or appropriate
Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio for the Pledged
Treasury Securities) or otherwise adversely affect
the Holder's rights in or to such Collateral or
materially adversely alter the rights in or to such
Collateral;
(3) reduce any Contract Adjustment
Payments, if any, or any Deferred Contract Adjustment
Payment, or change any place where, or the coin or
currency in which, any Contract Adjustment Payment is
payable;
(4) impair the right to institute suit for
the enforcement of any Purchase Contract, any
Contract Adjustment Payment, if any, or any Deferred
Contract Adjustment Payment, if any;
(5) reduce the number of shares of Common
Stock to be purchased pursuant to any Purchase
Contract, increase the price to purchase shares of
Common Stock upon settlement of any Purchase
Contract, change the Stock Purchase Date or otherwise
materially adversely affect the Holder's rights under
any Purchase Contract; or
(6) reduce the percentage of the
outstanding Purchase Contracts the consent of whose
Holders is required for any such supplemental
agreement;
provided, that if any amendment or proposal referred to
above would adversely affect only the Normal Units or the
Stripped Units, then only the affected class of Holder as of
the record date for the Holders entitled to vote thereon
will be entitled to vote on such amendment or proposal, and
such amendment or proposal shall not be effective except
with the consent of Holders of not less than a majority or
100% of such class, as the case may be.
-84-
(b) It shall not be necessary for any Act of
Holders under this Section to approve the particular form
of any proposed supplemental agreement, but it shall be
sufficient if such Act shall approve the substance
thereof.
SECTION 8.3 EXECUTION OF SUPPLEMENTAL AGREEMENTS.
In executing, or accepting the additional agencies
created by, any supplemental agreement permitted by this
Article or the modifications thereby of the agencies created by
this Agreement, the Agent shall be provided and (subject to
Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such
supplemental agreement is authorized or permitted by this
Agreement. The Agent may, but shall not be obligated to, enter
into any such supplemental agreement which affects the Agent's
own rights, duties or immunities under this Agreement or
otherwise.
SECTION 8.4 EFFECT OF SUPPLEMENTAL AGREEMENTS.
Upon the execution of any supplemental agreement
under this Article, this Agreement shall be modified in
accordance therewith, and such supplemental agreement shall
form a part of this Agreement for all purposes; and every
Holder of Certificates theretofore or thereafter authenticated,
executed on behalf of the Holders and delivered hereunder shall
be bound thereby.
SECTION 8.5 REFERENCE TO SUPPLEMENTAL AGREEMENTS.
Certificates authenticated, executed on behalf of the
Holders and delivered after the execution of any supplemental
agreement pursuant to this Article may, and shall if required
by the Agent, bear a notation in form approved by the Agent as
to any matter provided for in such supplemental agreement. If
the Company shall so determine, new Certificates so modified as
to conform, in the opinion of the Agent and the Company, to any
such supplemental agreement may be prepared and executed by the
Company and authenticated, executed on behalf of the Holders
and delivered by the Agent in exchange for Outstanding
Certificates.
ARTICLE IX.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
-85-
SECTION 9.1 COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR
CONVEY PROPERTY EXCEPT UNDER CERTAIN
CONDITIONS.
The Company covenants that it will not (a) merge or
consolidate with any other Person or (b) sell, assign,
transfer, lease or convey all or substantially all of its
properties and assets to any Person or group of affiliated
Persons in one transaction or a series of related transactions
other than, with respect to clause (b), a direct or indirect
wholly-owned subsidiary of the Company, unless (i) either the
Company shall be the continuing corporation, or the successor
(if other than the Company) shall be a corporation organized
and existing under the laws of the United States of America or
a State thereof or the District of Columbia and such
corporation shall expressly assume all the obligations of the
Company under the Purchase Contracts, the Notes, this
Agreement, the Remarketing Agreement and the Pledge Agreement
by one or more supplemental agreements in form reasonably
satisfactory to the Agent and the Collateral Agent, executed
and delivered to the Agent and the Collateral Agent by such
corporation, and (ii) the Company or such successor
corporation, as the case may be, shall not, immediately after
such merger or consolidation, or such sale, assignment,
transfer, lease or conveyance, be in default in the performance
of any covenant or condition hereunder, under any of the
Purchase Contracts, under the Remarketing Agreement, or under
the Pledge Agreement. Notwithstanding anything herein to the
contrary, a wholly-owned subsidiary of the Company to whom the
Company has sold, assigned, transferred, leased or conveyed all
or substantially all of its properties and assets shall be
required to expressly assume by a supplemental agreement,
executed and delivered to the Agent, in form satisfactory to
the Agent, all the obligations of the Company under
Section 7.7.
SECTION 9.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION.
(a) In case of any such consolidation, merger,
sale, assignment, transfer, lease or conveyance and upon
any such assumption by a successor corporation in
accordance with Section 9.1, such successor corporation
shall succeed to and be substituted for the Company with
the same effect as if it had been named herein as the
Company and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations
and covenants under the Purchase Contracts, the Notes,
this Agreement, the Remarketing Agreement and the Pledge
Agreement. Such successor corporation thereupon may cause
to be signed, and may issue either in its own name or in
the name of the Company, any or all of the Certificates
-86-
evidencing Units issuable hereunder which theretofore
shall not have been signed by the Company and delivered to
the Agent; and, upon the order of such successor
corporation, instead of the Company, and subject to all
the terms, conditions and limitations in this Agreement
prescribed, the Agent shall authenticate and execute on
behalf of the Holders and deliver any Certificates which
previously shall have been signed and delivered by the
officers of the Company to the Agent for authentication
and execution, and any Certificate evidencing Units which
such successor corporation thereafter shall cause to be
signed and delivered to the Agent for that purpose. All
the Certificates so issued shall in all respects have the
same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in
accordance with the terms of this Agreement as though all
of such Certificates had been issued at the date of the
execution hereof.
(b) In case of any such consolidation, merger,
sale, assignment, transfer, lease or conveyance such
change in phraseology and form (but not in substance) may
be made in the Certificates evidencing Units thereafter to
be issued as may be appropriate.
SECTION 9.3 OPINION OF COUNSEL GIVEN TO AGENT.
The Agent, subject to Sections 7.1 and 7.3, shall
receive an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, assignment, transfer, lease
or conveyance, and any such assumption, complies with the
provisions of this Article and that all conditions precedent to
the consummation of any such consolidation, merger, sale,
assignment, transfer, lease or conveyance have been met.
ARTICLE X.
COVENANTS
SECTION 10.1 PERFORMANCE UNDER PURCHASE CONTRACTS.
The Company covenants and agrees for the benefit of
the Holders from time to time of the Units that it will duly
and punctually perform its obligations under the Purchase
Contracts in accordance with the terms of the Purchase
Contracts and this Agreement.
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY.
(a) The Company will maintain in the Borough of
Manhattan, The City of New York an office or agency where
Certificates may be presented or surrendered for
-87-
acquisition of shares of Common Stock upon settlement of
the Purchase Contracts on any Settlement Date and for
transfer of Collateral upon occurrence of a Termination
Event, where Certificates may be surrendered for
registration of transfer or exchange, for a Collateral
Substitution or reestablishment of Normal Units and where
notices and demands to or upon the Company in respect of
the Units and this Agreement may be served. The Company
will give prompt written notice to the Agent of the
location, and any change in the location, of such office
or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail
to furnish the Agent with the address thereof, such
presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office, and the Company
hereby appoints the Agent as its agent to receive all such
presentations, surrenders, notices and demands.
(b) The Company may also from time to time
designate one or more other offices or agencies where
Certificates may be presented or surrendered for any or
all such purposes and may from time to time rescind such
designations; provided, that no such designation or
rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough
of Manhattan, The City of New York for such purposes. The
Company will give prompt written notice to the Agent of
any such designation or rescission and of any change in
the location of any such other office or agency. The
Company hereby designates as the place of payment for the
Units the Corporate Trust Office and appoints the Agent at
its Corporate Trust Office as paying agent in such city.
SECTION 10.3 COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times prior to the Stock
Purchase Date reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock the
full number of shares of Common Stock issuable against tender
of payment in respect of all Purchase Contracts constituting a
part of the Units evidenced by Outstanding Certificates.
SECTION 10.4 COVENANTS AS TO COMMON STOCK.
The Company covenants that all shares of Common Stock
which may be issued against tender of payment in respect of any
Purchase Contract constituting a part of the Outstanding Units
will, upon issuance, be duly authorized, validly issued, fully
paid and nonassessable.
-88-
SECTION 10.5 STATEMENTS OF OFFICER OF THE COMPANY AS TO
DEFAULT.
The Company will deliver to the Agent, within
120 days after the end of each fiscal year of the Company
ending after the date hereof, an Officer's Certificate, stating
whether or not to the best knowledge of the signer thereof the
Company is in default in the performance and observance of any
of the terms, provisions and conditions hereof, and if the
Company shall be in default, specifying all such defaults and
the nature and status thereof of which such Officer may have
knowledge.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the day and year first
above written.
NORTHROP GRUMMAN CORPORATION
By:
--------------------------------
Name:
Title:
JPMORGAN CHASE BANK
as Purchase Contract Agent
By:
--------------------------------
Name:
Title:
-89-
EXHIBIT A
FORM OF NORMAL UNITS CERTIFICATE
[FOR INCLUSION IN GLOBAL CERTIFICATES ONLY -- THIS
CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS
REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE
THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN
PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME
OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) to the Company or its agent for
registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or
such other name as requested by an authorized representative of
The Depository Trust Company, and any payment hereon is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
(Form of Face of Normal Units Certificate)
No. ______________ CUSIP No. ____________
Number of Normal Units____________
This Normal Units Certificate certifies that [For
inclusion in Global Certificates only -- Cede & Co.] is the
registered Holder of the number of Normal Units set forth above
[For inclusion in Global Certificates only - or such other
number of Normal Units reflected in the Schedule of Increases
or Decreases in Global Certificates attached hereto]. Each
Normal Unit represents (i) either (a) beneficial ownership by
the Holder of one ___ % Senior Note due 2006 (the "Note") of
Northrop Grumman Corporation, a Delaware corporation (the
"Company"). having a principal amount of $100, subject to the
Pledge of such Note by such Holder pursuant to the Pledge
Agreement, or (b) if the Note has been remarketed by the
Remarketing Agent (or if the Holder has elected not to have the
Note remarketed by delivering the appropriate Treasury
Consideration specified by the Remarketing Agent), the
appropriate Treasury Consideration, subject to the Pledge of
such Treasury Consideration by such Holder pursuant to the
Pledge Agreement, or (c) if a Tax Event Redemption has
occurred, the appropriate Applicable Ownership Interest in the
Treasury Portfolio subject to the Pledge of such Applicable
A-1
Ownership Interest in the Treasury Portfolio pursuant to the
Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Purchase Contract with the Company. All
capitalized terms used herein which are defined in the Purchase
Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Note or the
appropriate Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio, as the case may be,
constituting part of each Normal Unit evidenced hereby has been
pledged to the Collateral Agent, for the benefit of the
Company, to secure the obligations of the Holder under the
Purchase Contract comprising a part of such Normal Unit.
The Pledge Agreement provides that all payments in
respect of the Pledged Notes, Pledged Treasury Consideration or
Pledged Applicable Ownership Interest in the Treasury Portfolio
received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer in same day funds (i) in the
case of (A) quarterly cash distributions on Normal Units which
include Pledged Notes, Pledged Treasury Consideration or
Pledged Applicable Ownership Interest in the Treasury Portfolio
and (B) any payments in respect of the Notes, Treasury
Consideration or Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, that have been released from the
Pledge pursuant to the Pledge Agreement, to the Agent to the
account designated by the Agent, no later than 10:00 a.m., New
York City time, on the Business Day such payment is received by
the Collateral Agent (provided that in the event such payment
is received by the Collateral Agent on a day that is not a
Business Day or after 9:00 a.m., New York City time, on a
Business Day, then such payment shall be made no later than
9:30 a.m., New York City time, on the next succeeding Business
Day) and (ii) in the case of payments in respect of any Pledged
Notes, Pledged Treasury Consideration or Pledged Applicable
Ownership Interest in the Treasury Portfolio, as the case may
be, to be paid upon settlement of such Holder's obligations to
purchase Common Stock under the Purchase Contract, to the
Company on the Stock Purchase Date (as defined herein) in
accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of
the Normal Units of which such Pledged Notes, Pledged Treasury
Consideration or Pledged Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, are a part under the
Purchase Contracts forming a part of such Normal Units.
Quarterly distributions on Normal Units which include Pledged
Notes, Pledged Treasury Consideration or Pledged Applicable
Ownership Interest in the Treasury Portfolio, as the case may
be, which are payable quarterly in arrears on ___________,
___________, ___________, and ___________ each year, commencing
___________, 2002 (a "Payment Date"), shall, subject to receipt
A-2
thereof by the Agent from the Collateral Agent (if the
Collateral Agent is the registered owner thereof), be paid to
the Person in whose name this Normal Units Certificate (or a
Predecessor Normal Units Certificate) is registered at the
close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the
Holder of this Normal Units Certificate to purchase, and the
Company to sell, on ___________, 2004 (the "Stock Purchase
Date"), at a price equal to $100 (the "Stated Amount"), a
number of newly issued shares of Common Stock, $1 par value per
share ("Common Stock"), of the Company, equal to the Settlement
Rate, unless on or prior to the Stock Purchase Date there shall
have occurred a Termination Event or a Cash Settlement, Early
Settlement or Merger Early Settlement with respect to the
Normal Units of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. The Purchase Price (as defined
herein) for the shares of Common Stock purchased pursuant to
each Purchase Contract evidenced hereby, if not paid earlier,
shall be paid on the Stock Purchase Date by application of
payments received in respect of the Pledged Notes, Pledged
Treasury Consideration or Pledged Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, pledged to
secure the obligations of the Holder under such Purchase
Contract.
Payments on the Notes or the appropriate Treasury
Consideration or Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, will be payable at the office of
the Agent in The City of New York or, at the option of the
Company, by check mailed to the address of the Person entitled
thereto as such address appears on the Normal Units Register or
by wire transfer to an account specified by such Person at
least five Business Days prior to the applicable Payment Date.
The Company shall pay on each Payment Date in respect
of each Purchase Contract forming part of a Normal Unit
evidenced hereby an amount (the "Contract Adjustment Payment")
equal to ___% per year of the Stated Amount, computed on the
basis of a 360-day year of twelve 30-day months, subject to
deferral at the option of the Company as provided in the
Purchase Contract Agreement and more fully described on the
reverse hereof (provided that if any date on which a Contract
Adjustment Payment is to be made on the Purchase Contracts is
not a Business Day, then payment of such Contract Adjustment
Payment payable on such date will be made on the next
succeeding day which is a Business Day, and no interest or
payment will be paid in respect of such delay, except that if
such next succeeding Business Day is in the next succeeding
calendar year, then such payment will be made on the
A-3
immediately preceding Business Day). Such Contract Adjustment
Payments shall be payable to the Person in whose name this
Normal Units Certificate (or a Predecessor Normal Units
Certificate) is registered at the close of business on the
Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the
office of the Agent in The City of New York or, at the option
of the Company, by check mailed to the address of the Person
entitled thereto as such address appears on the Normal Units
Register or by wire transfer to the account designated to the
Agent by a prior written notice by such Person delivered at
least five Business Days prior to the applicable Payment Date.
Reference is hereby made to the further provisions
set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has
been executed by the Agent by manual signature, this Normal
Units Certificate shall not be entitled to any benefit under
the Pledge Agreement or the Purchase Contract Agreement or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
NORTHROP GRUMMAN CORPORATION
By:
--------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations
of such Holder under the Purchase Contracts
evidenced hereby)
By: JPMORGAN CHASE BANK, not individually
but solely as Attorney-in-Fact of such
Holder
By: __________________________________
Authorized Officer
A-4
AGENT'S CERTIFICATE OF AUTHENTICATION This is one of
the Normal Units Certificates referred to in the within
mentioned Purchase Contract Agreement.
JPMORGAN CHASE BANK,
as Purchase Contract Agent
Dated: _______________________
By:___________________________
Authorized Officer
(Form of Reverse of Normal Units Certificate)
Each Purchase Contract evidenced hereby is governed
by a Purchase Contract Agreement, dated as of ____________,
2001 (as may be supplemented from time to time, the "Purchase
Contract Agreement"), between the Company and JPMorgan Chase
Bank, as Purchase Contract Agent (including its successors
thereunder, herein called the "Agent"), to which Purchase
Contract Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective
rights, limitations of rights, obligations, duties and
immunities thereunder of the Agent, the Company, and the
Holders and of the terms upon which the Normal Units
Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the
Holder of this Normal Units Certificate to purchase, and the
Company to sell, on the Stock Purchase Date at a price equal to
$100 (the "Purchase Price"), a number of shares of Common Stock
of the Company equal to the Settlement Rate, unless, on or
prior to the Stock Purchase Date, there shall have occurred a
Termination Event or an Early Settlement, Merger Early
Settlement or Cash Settlement with respect to the Unit of which
such Purchase Contract is a part. The "Settlement Rate" is
equal to (a) if the Applicable Market Value (as defined below)
is greater than or equal to $___ (the "Threshold Appreciation
Price"), ___ shares of Common Stock per Purchase Contract,
(b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $___, the number of
shares of Common Stock per Purchase Contract equal to the
Stated Amount divided by the Applicable Market Value and (c) if
the Applicable Market Value is less than or equal to $___,
___ shares of Common Stock per Purchase Contract, in each case
subject to adjustment as provided in the Purchase Contract
Agreement. No fractional shares of Common Stock will be issued
upon settlement of Purchase Contracts, as provided in the
Purchase Contract Agreement.
The "Applicable Market Value" means the average of
-1-
the Closing Price per share of Common Stock on each of the
20 consecutive Trading Days ending on the third Trading Day
immediately preceding the Stock Purchase Date.
The "Closing Price" of the Common Stock on any date
of determination means the closing sale price (or, if no
closing price is reported, the last reported sale price) of the
Common Stock on the New York Stock Exchange (the "NYSE") on
such date or, if the Common Stock is not listed for trading on
the NYSE on any such date, as reported in the composite
transactions for the principal United States securities
exchange on which the Common Stock is so listed, or if the
Common Stock is not so listed on a United States national or
regional securities exchange, as reported by The Nasdaq Stock
Market, or, if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter
market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the
market value of the Common Stock on such date as determined by
a nationally recognized independent investment banking firm
retained for this purpose by the Company.
A "Trading Day" means a day on which the Common Stock
(A) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market
at the close of business and (B) has traded at least once on
the national or regional securities exchange or association or
over-the- counter market that is the primary market for the
trading of the Common Stock.
Each Purchase Contract evidenced hereby may be
settled prior to the Stock Purchase Date through Early
Settlement or Merger Early Settlement, in accordance with the
terms of the Purchase Contract Agreement.
In accordance with the terms of the Purchase Contract
Agreement, the Holder of this Normal Units Certificate shall
pay the Purchase Price for the shares of Common Stock purchased
pursuant to each Purchase Contract evidenced hereby (i) by
effecting a Cash Settlement, Early Settlement or Merger Early
Settlement, (ii) by application of payments received in respect
of the Pledged Treasury Consideration acquired from the
proceeds of a remarketing of the related Pledged Notes
underlying the Normal Units represented by this Normal Units
Certificate or (iii) if the Holder has elected not to
participate in the remarketing, by application of payments
received in respect of the Pledged Treasury Consideration
deposited by such Holder in respect of such Purchase Contract,
or (iv) if a Tax Event Redemption has occurred prior to the
successful remarketing of the Notes by application of payments
received in respect of the Pledged Applicable Ownership
-2-
Interest in the Treasury Portfolio purchased by the Collateral
Agent on behalf of the Holder of this Normal Units Certificate.
If, as provided in the Purchase Contract Agreement, upon the
occurrence of a Last Failed Remarketing the Collateral Agent,
for the benefit of the Company, exercises its rights as a
secured creditor with respect to the Pledged Notes related to
this Normal Units Certificate, any accrued and unpaid interest
on such Pledged Notes will become payable by the Company to the
Holder of this Normal Units Certificate in the manner provided
for in the Purchase Contract Agreement.
The Company shall not be obligated to issue any
shares of Common Stock in respect of a Purchase Contract or
deliver any certificates therefor to the Holder unless it shall
have received payment in full of the aggregate Purchase Price
for the shares of Common Stock to be purchased thereunder in
the manner herein set forth.
Under the terms of the Pledge Agreement, the Agent
will be entitled to exercise the voting and any other
consensual rights pertaining to the Pledged Notes. Upon
receipt of notice of any meeting at which holders of Notes are
entitled to vote or upon the solicitation of consents, waivers
or proxies of holders of Notes, the Agent shall, as soon as
practicable thereafter, mail to the Holders of Normal Units a
notice (a) containing such information as is contained in the
notice or solicitation, (b) stating that each such Holder on
the record date set by the Agent therefor (which, to the extent
possible, shall be the same date as the record date for
determining the holders of Notes entitled to vote) shall be
entitled to instruct the Agent as to the exercise of the voting
rights pertaining to the Pledged Notes constituting a part of
such Holder's Normal Units and (c) stating the manner in which
such instructions may be given. Upon the written request of
the Holders of Normal Units on such record date, the Agent
shall endeavor insofar as practicable to vote or cause to be
voted, in accordance with the instructions set forth in such
requests, the maximum number of Pledged Notes as to which any
particular voting instructions are received. In the absence of
specific instructions from the Holder of a Normal Unit, the
Agent shall abstain from voting the Pledged Note evidenced by
such Normal Unit.
The Normal Units Certificates are issuable only in
registered form and only in denominations of a single Normal
Unit and any integral multiple thereof. The transfer of any
Normal Units Certificate will be registered and Normal Units
Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Normal Units Registrar may require a
Holder, among other things, to furnish appropriate endorsements
and transfer documents permitted by the Purchase Contract
-3-
Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the
Agent may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
The Holder of a Normal Unit may substitute for the Pledged
Notes, Pledged Treasury Consideration or Pledged Applicable
Ownership Interest in the Treasury Portfolio, as the case may
be, securing its obligations under the related Purchase
Contract Treasury Securities in accordance with the terms of
the Purchase Contract Agreement and the Pledge Agreement. From
and after such Collateral Substitution, the Unit for which such
Pledged Treasury Securities secures the Holder's obligation
under the Purchase Contract shall be referred to as a "Stripped
Unit." A Holder that elects to substitute a Treasury Security
for Pledged Notes, Pledged Treasury Consideration or Pledged
Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, thereby creating Stripped Units, shall be
responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract
Agreement, for so long as the Purchase Contract underlying a
Normal Unit remains in effect, such Normal Unit shall not be
separable into its constituent parts, and the rights and
obligations of the Holder of such Normal Units in respect of
the Pledged Note, Pledged Treasury Consideration or Pledged
Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, and Purchase Contract constituting such Normal
Unit may be transferred and exchanged only as a Normal Unit.
A Holder of Stripped Units may reestablish Normal
Units by delivering to the Collateral Agent Notes or the
appropriate Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, in
exchange for the release of the Pledged Treasury Securities in
accordance with the terms of the Purchase Contract Agreement
and the Pledge Agreement.
Subject to the next succeeding paragraph, the Company
shall pay, on each Payment Date, the Contract Adjustment
Payments, if any, payable in respect of each Purchase Contract
to the Person in whose name the Normal Units Certificate
evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract
Adjustment Payments, if any, will be payable at the office of
the Agent in the City of New York or, at the option of the
Company, by check mailed to the address of the Person entitled
thereto at such address as it appears on the Normal Units
Register or by wire transfer to the account designated by such
Person in writing at least five Business Days prior to the
applicable Payment Date.
The Company shall have the right, at any time prior
-4-
to the Stock Purchase Date, to defer the payment of any or all
of the Contract Adjustment Payments otherwise payable on any
Payment Date, but only if the Company shall give the Holders
and the Agent written notice of its election to defer Contract
Adjustment Payments as provided in the Purchase Contract
Agreement. Any Contract Adjustment Payments so deferred shall,
to the extent permitted by law, bear additional Contract
Adjustment Payments thereon at the rate of __% per year
(computed on the basis of a 360-day year of twelve 30-day
months), compounding on each succeeding Payment Date, until
paid in full (such deferred installments of Contract Adjustment
Payments, if any, together with the additional Contract
Adjustment Payments, if any, accrued thereon, are referred to
herein as the "Deferred Contract Adjustment Payments").
Deferred Contract Adjustment Payments, if any, shall be due on
the next succeeding Payment Date except to the extent that
payment is deferred pursuant to the Purchase Contract
Agreement. No Contract Adjustment Payments may be deferred to
a date that is after the Stock Purchase Date and no such
deferral period may end other than on a Payment Date.
In the event that the Company elects to defer the
payment of Contract Adjustment Payments on the Purchase
Contracts until a Payment Date prior to the Stock Purchase
Date, then all Deferred Contract Adjustment Payments, if any,
shall be payable to the registered Holders as of the close of
business on the Record Date immediately preceding such Payment
Date.
In the event that the Company elects to defer the
payment of Contract Adjustment Payments on the Purchase
Contracts until the Stock Purchase Date, the Holder of this
Normal Units Certificate will receive on the Stock Purchase
Date, in lieu of a cash payment, a number of shares of Common
Stock (in addition to the number of shares of Common Stock
equal to the Settlement Rate) equal to (i) the aggregate amount
of Deferred Contract Adjustment Payments payable to the Holder
of this Normal Units Certificate divided by (ii) the Applicable
Market Value.
In the event the Company exercises its option to
defer the payment of Contract Adjustment Payments, then, until
the Deferred Contract Adjustment Payments have been paid, the
Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire,
or make a liquidation payment with respect to, any of its
Common Stock other than (i) purchases, redemptions or
acquisitions of shares of Common Stock in connection with any
employment contract, benefit plan or other similar arrangement
with or for the benefit of employees, officers or directors or
a stock purchase or dividend reinvestment plan, or the
-5-
satisfaction by the Company of its obligations pursuant to any
contract or security outstanding on the date the Company
exercises its rights to defer the Contract Adjustment Payments;
(ii) as a result of a reclassification of the Company's Common
Stock or the exchange or conversion of one class or series of
for another class or series of the Company's Common Stock;
(iii) the purchase of fractional interests in shares of any
series of the Company's Common Stock pursuant to the conversion
or exchange provisions of such Common Stock or the security
being converted or exchanged; (iv) dividends or distributions
in any series of the Company's Common Stock (or rights to
acquire Common Stock) or repurchases, acquisitions or
redemptions of Common Stock in connection with the issuance or
exchange of any series of Common Stock (or securities
convertible into or exchangeable for shares of our Common
Stock; or (v) redemptions, exchanges or repurchases of any
rights outstanding under a shareholder rights plan or the
declaration or payment thereunder of a dividend or distribution
of or with respect to rights in the future.
The Purchase Contracts and all obligations and rights
of the Company and the Holders thereunder, including, without
limitation, the rights of the Holders to receive and the
obligation of the Company to pay Contract Adjustment Payments,
if any, or any Deferred Contract Adjustment Payments, and the
rights of the Holders to purchase Common Stock, shall
immediately and automatically terminate, without the necessity
of any notice or action by any Holder, the Agent or the
Company, if, on or prior to the Stock Purchase Date, a
Termination Event shall have occurred. Upon the occurrence of a
Termination Event, the Company shall promptly but in no event
later than two Business Days thereafter give written notice to
the Agent, the Collateral Agent and to the Holders, at their
addresses as they appear in the Normal Units Register. Upon and
after the occurrence of a Termination Event, the Collateral
Agent shall release the Pledged Notes, Pledged Treasury
Consideration or Pledged Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, from the Pledge in
accordance with the provisions of the Pledge Agreement.
Upon registration of transfer of this Normal Units
Certificate, the transferee shall be bound (without the
necessity of any other action on the part of such transferee,
except as may be required by the Agent pursuant to the Purchase
Contract Agreement), under the terms of the Purchase Contract
Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the
Purchase Contracts evidenced by this Normal Units Certificate.
The Company covenants and agrees, and the Holder, by its
acceptance hereof, likewise covenants and agrees, to be bound
by the provisions of this paragraph.
-6-
The Holder of this Normal Units Certificate, by its
acceptance hereof, authorizes the Agent to enter into and
perform the related Purchase Contracts forming part of the
Normal Units evidenced hereby on his behalf as his attorney-in-
fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a
case under the Bankruptcy Code, agrees to be bound by the terms
and provisions thereof, covenants and agrees to perform such
Holder's obligations under such Purchase Contracts, consents to
the provisions of the Purchase Contract Agreement, authorizes
the Agent to enter into and perform the Pledge Agreement on
such Holder's behalf as attorney-in-fact, and consents to the
Pledge of the Notes or the appropriate Treasury Consideration
or Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, underlying this Normal Units Certificate
pursuant to the Pledge Agreement. The Holder further covenants
and agrees, that, to the extent and in the manner provided in
the Purchase Contract Agreement and the Pledge Agreement, but
subject to the terms thereof, payments in respect of the
Pledged Notes, Pledged Treasury Consideration or Pledged
Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, to be paid upon settlement of such Holder's
obligations to purchase Common Stock under the Purchase
Contract, shall be paid on the Stock Purchase Date by the
Collateral Agent to the Company in satisfaction of such
Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such
payments.
Each Holder of any Unit, and each Beneficial Owner
thereof, by its acceptance thereof or of its interest therein,
further agrees to treat (i) itself as the owner of the related
Notes, Treasury Consideration, Applicable Ownership Interest in
the Treasury Portfolio or Treasury Securities, as the case may
be, and (ii) the Notes as indebtedness of the Company, in each
case, for all tax purposes.
Subject to certain exceptions, the provisions of the
Purchase Contract Agreement may be amended with the consent of
the Holders of a majority of the Purchase Contracts.
The Purchase Contracts shall for all purposes be
governed by, and construed in accordance with, the laws of the
State of New York, without regard to its principles of
conflicts of laws.
The Company, the Agent and its Affiliates and any
agent of the Company or the Agent may treat the Person in whose
name this Normal Units Certificate is registered as the owner
of the Normal Units evidenced hereby for the purpose of
-7-
receiving quarterly payments on the Notes, the Treasury
Consideration or the Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, receiving payments of
Contract Adjustment Payments, if any, and any Deferred Contract
Adjustment Payments, performance of the Purchase Contracts and
for all other purposes whatsoever (subject to the Record Date
provisions hereof), whether or not any payments in respect
thereof be overdue and notwithstanding any notice to the
contrary, and neither the Company, the Agent, such Affiliates
nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the
settlement thereof, entitle the Holder to any of the rights of
a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is
available for inspection at the offices of the Agent.
-8-
ABBREVIATIONS
The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed
as though they were written out in full according to applicable
laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
--------------------------------
(cust) (minor)
Under Uniform Gifts to Minors Act
--------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in common
Additional abbreviations may also be used though not in the
above list.
-1-
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
-----------------------------------------------------------------
-----------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee)
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip
Code of Assignee)
the within Normal Units Certificates and all rights thereunder,
hereby irrevocably constituting and appointing
____________________________ attorney to transfer said Normal
Units Certificates on the books of Northrop Grumman Corporation
with full power of substitution in the premises.
Dated: _______________________ Signature:--------------------
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the face of the
within Normal Units Certificates in every particular, without
alteration or enlargement or any change whatsoever. Signature
Guarantee: -------------------------------------------------------
-2-
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for
shares of Common Stock deliverable upon settlement on or after
the Stock Purchase Date of the Purchase Contracts underlying
the number of Normal Units evidenced by this Normal Units
Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to
the undersigned at the address indicated below unless a
different name and address have been indicated below. If
shares are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: ___________________ Signature: __________________________
Signature Guarantee:-----------------
(if assigned to another person)
If shares are to be registered REGISTERED HOLDER
in the name of and delivered
to a Person other than the Please print name and address
Holder, please (i) print such of Registered Holder:
Person's name and address and
(ii) provide a guarantee of
your signature:
------------------------------ ------------------------------
Name Name
------------------------------ ------------------------------
Address Address
Social Security or other Taxpayer
Identification Number, if any
-1-
ELECTION TO SETTLE EARLY
The undersigned Holder of this Normal Units
Certificate hereby irrevocably exercises the option to effect
Early Settlement in accordance with the terms of the Purchase
Contract Agreement with respect to the Purchase Contracts
underlying the number of Normal Units evidenced by this Normal
Units Certificate specified below. The option to effect Early
Settlement may be exercised only with respect to Purchase
Contracts underlying Normal Units with an aggregate Stated
Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon such Early Settlement be
registered in the name of, and delivered, together with a check
in payment for any fractional share and any Normal Units
Certificate representing any Normal Units evidenced hereby as
to which Early Settlement of the related Purchase Contracts is
not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below.
Pledged Notes, Pledged Treasury Consideration or the Pledged
Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, deliverable upon such Early Settlement will be
transferred in accordance with the transfer instructions set
forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated: ____________________ Signature:---------------------------
Signature Guarantee: ----------------
Number of Units evidenced hereby as to which Early
Settlement of the related Purchase Contracts is being elected:
If shares of Common Stock are REGISTERED HOLDER
to be registered in the name
of and delivered to and Please print name and address
Pledged Notes, Pledged of Registered Holder:
Treasury Consideration or
Pledged Applicable Ownership
Interest in the Treasury
Portfolio, as the case may be,
are to be transferred to a
Person other than the Holder,
please print such Person's
name and address:
-1-
------------------------------ ------------------------------
Name Name
------------------------------ ------------------------------
Address Address
Social Security or other Taxpayer
Identification Number, if any
Transfer instructions for Pledged Notes, Pledged
Treasury Consideration or the Pledged Applicable Ownership
Interest in the Treasury Portfolio, as the case may be,
transferable upon Early Settlement [or a Termination Event]:
-2-
(TO BE ATTACHED TO GLOBAL CERTIFICATES)
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
Amount of Stated Amount
Decrease in Amount of of the Global
Stated Increase in Certificate
Amount of Stated Amount Following
the Global of the Global Such Decrease Signature of
Date Certificate Certificate or Increase Authorizing Officer
-1-
EXHIBIT B
FORM OF STRIPPED UNITS CERTIFICATE
[FOR INCLUSION IN GLOBAL CERTIFICATES ONLY -- THIS
CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS
REGISTERED IN THE NAME OF A CLEARING AGENCY OR A NOMINEE
THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN
PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME
OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) to the Company or its agent for
registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or
such other name as requested by an authorized representative of
The Depository Trust Company, and any payment hereon is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
Form of Face of Stripped Units Certificate
No. CUSIP No. ____________
Number of Stripped Units
This Stripped Units Certificate certifies that [For
inclusion in Global Certificates only -- Cede & Co.] is the
registered Holder of the number of Stripped Units set forth
above [For inclusion in Global Certificates only - or such
other number of Stripped Units reflected in the Schedule of
Increases or Decreases in Global Certificate attached hereto].
Each Stripped Unit represents (i) a 1/10 undivided beneficial
ownership interest in a Treasury Security, subject to the
Pledge of such interest in such Treasury Security by such
Holder pursuant to the Pledge Agreement, and (ii) the rights
and obligations of the Holder under one Purchase Contract with
Northrop Grumman Corporation, a Delaware corporation (the
"Company"). All capitalized terms used herein which are
defined in the Purchase Contract Agreement have the meaning set
forth therein.
Pursuant to the Pledge Agreement, the Treasury
Security constituting part of each Stripped Unit evidenced
B-1
hereby has been pledged to the Collateral Agent, for the
benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a part of such Stripped
Unit.
Each Purchase Contract evidenced hereby obligates the
Holder of this Stripped Units Certificate to purchase, and the
Company to sell, on ___, 2004 (the "Stock Purchase Date"), at a
price equal to $100 (the "Stated Amount"), a number of shares
of Common Stock, $1.00 par value per share ("Common Stock"), of
the Company, equal to the Settlement Rate, unless on or prior
to the Stock Purchase Date there shall have occurred a
Termination Event or an Early Settlement, Merger Early
Settlement or Cash Settlement with respect to the Stripped
Units of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. The Purchase Price (as
defined herein) for the shares of Common Stock purchased
pursuant to each Purchase Contract evidenced hereby, if not
paid earlier, shall be paid on the Stock Purchase Date by
application of payments received in respect of the Pledged
Treasury Securities pledged to secure the obligations under
such Purchase Contract in accordance with the terms of the
Pledge Agreement.
The Company shall pay on each Payment Date in respect
of each Purchase Contract forming part of a Stripped Unit
evidenced hereby an amount (the "Contract Adjustment Payments")
equal to ___% per year of the Stated Amount, computed on the
basis of a 360-day year of 12 30-day months, subject to
deferral at the option of the Company as provided in the
Purchase Contract Agreement and more fully described on the
reverse hereof (provided that if any date on which Contract
Adjustment Payments are to be made on the Purchase Contracts is
not a Business Day, then payment of the Contract Adjustment
Payments payable on that date will be made on the next
succeeding day which is a Business Day, and no interest or
payment will be paid in respect of the delay, except that if
such next succeeding Business Day is in the next succeeding
calendar year, such payment will be made on the immediately
preceding Business Day). Such Contract Adjustment Payments
shall be payable to the Person in whose name this Stripped
Units Certificate (or a Predecessor Stripped Units Certificate)
is registered at the close of business on the Record Date for
such Payment Date.
Contract Adjustment Payments, if any, will be payable
at the office of the Agent in the City of New York or, at the
option of the Company, by check mailed to the address of the
Person entitled thereto at such address as it appears on the
Normal Units Register or by wire transfer to the account
B-2
designated by such Person in writing at least five Business
Days prior to the applicable Payment Date.
Reference is hereby made to the further provisions
set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has
been executed by the Agent by manual signature, this Stripped
Units Certificate shall not be entitled to any benefit under
the Pledge Agreement or the Purchase Contract Agreement or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
NORTHROP GRUMMAN CORPORATION
By: ____________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations
of such Holder under the Purchase
Contracts)
By: JPMORGAN CHASE BANK, not individually
but solely as Attorney-in-Fact of such
Holder
By: ____________________________________
Authorized Officer
B-3
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Stripped Units referred to in the
within-mentioned Purchase Contract Agreement.
JPMORGAN CHASE BANK,
as Purchase Contract Agent
Dated:________________________ By:_________________________
Authorized Officer
(Reverse of Stripped Units Certificate)
Each Purchase Contract evidenced hereby is governed
by a Purchase Contract Agreement, dated as of ___, 2001 (as may
be supplemented from time to time, the "Purchase Contract
Agreement"), between the Company and JPMorgan Chase Bank, as
Purchase Contract Agent (including its successors thereunder,
herein called the "Agent"), to which the Purchase Contract
Agreement and supplemental agreements thereto reference is
hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company and the Holders and of the
terms upon which the Stripped Units Certificates are, and are
to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the
Holder of this Stripped Units Certificate to purchase, and the
Company to sell, on the Stock Purchase Date at a price equal to
$100 (the "Purchase Price"), a number of shares of Common Stock
of the Company equal to the Settlement Rate, unless, on or
prior to the Stock Purchase Date, there shall have occurred a
Termination Event or an Early Settlement, Merger Early
Settlement or Cash Settlement with respect to the Unit of which
such Purchase Contract is a part. The "Settlement Rate" is
equal to (a) if the Applicable Market Value (as defined below)
is greater than or equal to $___(the "Threshold Appreciation
Price"),___ shares of Common Stock per Purchase Contract,
(b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $___, the number of
shares of Common Stock per Purchase Contract equal to the
Stated Amount divided by the Applicable Market Value and (c) if
the Applicable Market Value is less than or equal to $___,
___ shares of Common Stock per Purchase Contract, in each case
subject to adjustment as provided in the Purchase Contract
Agreement. No fractional shares of Common Stock will be issued
upon settlement of Purchase Contracts, as provided in the
Purchase Contract Agreement.
The "Applicable Market Value" means the average of
the Closing Price per share of Common Stock on each of the
B-1
20 consecutive Trading Days ending on the third Trading Day
immediately preceding the Stock Purchase Date.
The "Closing Price" of the Common Stock on any date
of determination means the closing sale price (or, if no
closing price is reported, the last reported sale price) of the
Common Stock on the New York Stock Exchange (the "NYSE") on
such date or, if the Common Stock is not listed for trading on
the NYSE on any such date, as reported in the composite
transactions for the principal United States securities
exchange on which the Common Stock is so listed, or if the
Common Stock is not so listed on a United States national or
regional securities exchange, as reported by The Nasdaq Stock
Market, or, if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter
market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the
market value of the Common Stock on such date as determined by
a nationally recognized independent investment banking firm
retained for this purpose by the Company.
A "Trading Day" means a day on which the Common Stock
(A) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market
at the close of business and (B) has traded at least once on
the national or regional securities exchange or association or
over-the-counter market that is the primary market for the
trading of the Common Stock.
Each Purchase Contract evidenced hereby may be
settled prior to the Stock Purchase Date through Early
Settlement, Merger Early Settlement or Cash Settlement, in
accordance with the terms of the Purchase Contract Agreement.
In accordance with the terms of the Purchase Contract
Agreement, the Holder of this Stripped Units Certificate shall
pay the Purchase Price for the shares of Common Stock purchased
pursuant to each Purchase Contract evidenced hereby (i) by
effecting an Early Settlement, Merger Early Settlement or Cash
Settlement or (ii) by application of payments received in
respect of the Pledged Treasury Securities underlying the
Stripped Units represented by this Stripped Units Certificate.
The Company shall not be obligated to issue any
shares of Common Stock in respect of a Purchase Contract or
deliver any certificates therefor to the Holder unless it shall
have received payment in full of the aggregate Purchase Price
for the shares of Common Stock to be purchased thereunder in
the manner herein set forth.
B-2
The Stripped Units Certificates are issuable only in
registered form and only in denominations of a single Stripped
Unit and any integral multiple thereof. The transfer of any
Stripped Units Certificate will be registered and Stripped
Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Stripped Units Registrar may require a
Holder, among other things, to furnish appropriate endorsements
and transfer documents permitted by the Purchase Contract
Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the
Agent may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
The Holder of a Stripped Unit may substitute for the Pledged
Treasury Securities securing its obligations under the related
Purchase Contract Notes or the appropriate Treasury
Consideration or Applicable Ownership Interest in the Treasury
Portfolio in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after such
substitution, the Unit for which such Pledged Notes, Pledged
Treasury Consideration or Pledged Applicable Ownership Interest
in the Treasury Portfolio secures the Holder's obligation under
the Purchase Contract shall be referred to as a "Normal Unit."
A Holder that elects to substitute Notes or the appropriate
Treasury Consideration or Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, for Pledged Treasury
Securities, thereby reestablishing Normal Units, shall be
responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract
Agreement, for so long as the Purchase Contract underlying a
Stripped Unit remains in effect, such Stripped Unit shall not
be separable into its constituent parts, and the rights and
obligations of the Holder of such Stripped Unit in respect of
the Pledged Treasury Security and the Purchase Contract
constituting such Stripped Unit may be transferred and
exchanged only as a Stripped Unit.
Subject to the next succeeding paragraph, the Company
shall pay, on each Payment Date, the Contract Adjustment
Payments, payable in respect of each Purchase Contract to the
Person in whose name the Stripped Units Certificate evidencing
such Purchase Contract is registered at the close of business
on the Record Date for such Payment Date. Contract Adjustment
Payments, if any, will be payable at the office of the Agent in
the City of New York or, at the option of the Company, by check
mailed to the address of the Person entitled thereto at such
address as it appears on the Normal Units Register or by wire
transfer to the account designated by such Person in writing at
least five Business Days prior to the applicable Payment Date.
The Company shall have the right, at any time prior
to the Stock Purchase Date, to defer the payment of any or all
B-3
of the Contract Adjustment Payments otherwise payable on any
Payment Date, but only if the Company shall give the Holders
and the Agent written notice of its election to defer Contract
Adjustment Payments as provided in the Purchase Contract
Agreement. Any Contract Adjustment Payments so deferred shall,
to the extent permitted by law, bear additional Contract
Adjustment Payments thereon at the rate of __% per year
(computed on the basis of a 360-day year of 12 30-day months),
compounding on each succeeding Payment Date, until paid in full
(such deferred installments of Contract Adjustment Payments, if
any, together with the additional Contract Adjustment Payments
accrued thereon, are referred to herein as the "Deferred
Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment
Date except to the extent that payment is deferred pursuant to
the Purchase Contract Agreement. No Contract Adjustment
Payments may be deferred to a date that is after the Stock
Purchase Date and no such deferral period may end other than on
a Payment Date.
In the event that the Company elects to defer the
payment of Contract Adjustment Payments on the Purchase
Contracts until a Payment Date prior to the Stock Purchase
Date, then all Deferred Contract Adjustment Payments, if any,
shall be payable to the registered Holders as of the close of
business on the Record Date immediately preceding such Payment
Date.
In the event that the Company elects to defer the
payment of Contract Adjustment Payments on the Purchase
Contracts until the Stock Purchase Date, the Holder of this
Stripped Units Certificate will receive on the Stock Purchase
Date, in lieu of a cash payment, a number of shares of Common
Stock (in addition to the number of shares of Common Stock
equal to the Settlement Rate) equal to (i) the aggregate amount
of Deferred Contract Adjustment Payments payable to the Holder
of this Stripped Units Certificate divided by (ii) the
Applicable Market Value.
In the event the Company exercises its option to
defer the payment of Contract Adjustment Payments, then, until
the Deferred Contract Adjustment Payments have been paid, the
Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire,
or make a liquidation payment with respect to, any of its
Common Stock other than (i) purchases, redemptions or
acquisitions of shares of Capital Stock in connection with any
employment contract, benefit plan or other similar arrangement
with or for the benefit of employees, officers or directors or
a stock purchase or dividend reinvestment plan, or the
satisfaction by the Company of its obligations pursuant to any
B-4
contract or security outstanding on the date the Company
exercises its rights to defer the Contract Adjustment Payments;
(ii) as a result of a reclassification of the Company's Common
Stock or the exchange or conversion of one class or series of
the Company's Common Stock for another class or series of the
Company's Common Stock; (iii) the purchase of fractional
interests in shares of the Company's Common Stock pursuant to
the conversion or exchange provisions of such Common Stock or
the security being converted or exchanged; (iv) dividends or
distributions in Common Stock (or rights to acquire Common
Stock) or repurchases, acquisitions or redemptions of Capital
Stock in connection with the issuance or exchange of Common
Stock (or securities convertible into or exchangeable for
shares of our Common Stock); or (v) redemptions, exchanges or
repurchases of any rights outstanding under a shareholder
rights plan or the declaration or payment thereunder of a
dividend or distribution of or with respect to rights in the
future.
The Purchase Contracts and all obligations and rights
of the Company and the Holders thereunder, including, without
limitation, the rights of the Holders to receive and the
obligation of the Company to pay Contract Adjustment Payments,
if any, or any Deferred Contract Adjustment Payments, and the
rights and obligations of Holders to purchase Common Stock,
shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Agent or
the Company, if, on or prior to the Stock Purchase Date, a
Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event
later than two Business Days thereafter give written notice to
the Agent, the Collateral Agent and to the Holders, at their
addresses as they appear in the Stripped Units Register. Upon
and after the occurrence of a Termination Event, the Collateral
Agent shall release the Pledged Treasury Securities from the
Pledge in accordance with the provisions of the Pledge
Agreement.
Upon registration of transfer of this Stripped Units
Certificate, the transferee shall be bound (without the
necessity of any other action on the part of such transferee,
except as may be required by the Agent pursuant to the Purchase
Contract Agreement), under the terms of the Purchase Contract
Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the
Purchase Contracts evidenced by this Stripped Units
Certificate. The Company covenants and agrees, and the Holder,
by his acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
The Holder of this Stripped Units Certificate, by his
acceptance hereof, authorizes the Agent to enter into and
B-5
perform the related Purchase Contracts forming part of the
Stripped Units evidenced hereby on his behalf as its attorney-
in-fact, expressly withholds any consent to the assumption
(i.e., affirmance) of the Purchase Contracts by the Company or
its trustee in the event that the Company becomes the subject
of a case under the Bankruptcy Code, agrees to be bound by the
terms and provisions thereof, covenants and agrees to perform
such Holder's obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement,
authorizes the Agent to enter into and perform the Pledge
Agreement on such Holder's behalf as attorney-in-fact, and
consents to the Pledge of the Treasury Securities underlying
this Stripped Units Certificate pursuant to the Pledge
Agreement. The Holder further covenants and agrees, that, to
the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms
thereof, payments in respect of the Pledged Treasury
Securities, to be paid upon settlement of such Holder's
obligations to purchase Common Stock under the Purchase
Contract, shall be paid on the Stock Purchase Date by the
Collateral Agent to the Company in satisfaction of such
Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such
payments.
Each Holder of any Unit, and each Beneficial Owner
thereof, by its acceptance thereof or of its interest therein,
further agrees to treat (i) itself as the owner of the related
Notes, Treasury Consideration or Treasury Securities, as the
case may be, and (ii) the Notes as indebtedness of the Company,
in each case, for United States federal, state and local income
and franchise tax purposes.
Subject to certain exceptions, the provisions of the
Purchase Contract Agreement may be amended with the consent of
the Holders of a majority of the Purchase Contracts.
The Purchase Contracts shall for all purposes be
governed by, and construed in accordance with, the laws of the
State of New York, without regard to its principles of
conflicts of laws.
The Company, the Agent and its Affiliates and any
agent of the Company or the Agent may treat the Person in whose
name this Stripped Units Certificate is registered as the owner
of the Stripped Units evidenced hereby for the purpose of
receiving any Contract Adjustment Payments and any Deferred
Contract Adjustment Payments, performance of the Purchase
Contracts and for all other purposes whatsoever (subject to the
Record Date provisions hereof), whether or not any payments in
B-6
respect thereof be overdue and notwithstanding any notice to
the contrary, and neither the Company, the Agent, such
Affiliate, nor any such agent shall be affected by notice to
the contrary.
The Purchase Contracts shall not, prior to the
settlement thereof, entitle the Holder to any of the rights of
a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is
available for inspection at the offices of the Agent.
B-7
ABBREVIATIONS
The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed
as though they were written out in full according to applicable
laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
--------------------------------
(cust) (minor)
Under Uniform Gifts to Minors Act
--------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in common
Additional abbreviations may also be used though not in the
above list.
B-1
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
-----------------------------------------------------------------
-----------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee)
-----------------------------------------------------------------
---------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip
Code of Assignee)
the within Stripped Units Certificates and all rights
thereunder, hereby irrevocably constituting and appointing
____________________________ attorney to transfer said Stripped
Units Certificates on the books of Northrop Grumman Corporation
with full power of substitution in the premises.
Dated: ______________________ Signature:---------------------------
NOTICE: The signature to this
assignment must correspond with
the name as it appears upon the
face of the within Stripped Units
Certificates in every particular,
without alteration or enlargement
or any change whatsoever.
Signature Guarantee: ---------------------------------------------------
B-2
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for
shares of Common Stock deliverable upon settlement on or after
the Stock Purchase Date of the Purchase Contracts underlying
the number of Stripped Units evidenced by this Stripped Units
Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to
the undersigned at the address indicated below unless a
different name and address have been indicated below. If
shares are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: ___________________ Signature: __________________________
Signature Guarantee: ________________
(if assigned to another person)
If shares are to be registered REGISTERED HOLDER
in the name of and delivered
to a Person other than the Please print name and address
Holder, please (i) print such of Registered Holder:
Person's name and address and
(ii) provide a guarantee of
your signature:
------------------------------ ------------------------------
Name Name
------------------------------ ------------------------------
Address Address
Social Security or other Taxpayer
Identification Number, if any
B-1
ELECTION TO SETTLE EARLY
The undersigned Holder of this Stripped Units
Certificate hereby irrevocably exercises the option to effect
Early Settlement in accordance with the terms of the Purchase
Contract Agreement with respect to the Purchase Contracts
underlying the number of Stripped Units evidenced by this
Stripped Units Certificate specified below. The option to
effect Early Settlement may be exercised only with respect to
Purchase Contracts underlying Stripped Units with an aggregate
Stated Amount equal to $1,000 or an integral multiple thereof.
The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon such Early Settlement be
registered in the name of, and delivered, together with a check
in payment for any fractional share and any Stripped Units
Certificate representing any Stripped Units evidenced hereby as
to which Early Settlement of the related Purchase Contracts is
not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below.
Pledged Treasury Securities deliverable upon such Early
Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered
in the name of a Person other than the undersigned, the
undersigned will pay any transfer tax payable incident thereto.
Dated: ____________________ Signature:---------------------------
Signature Guarantee: -------------------
Number of Units evidenced hereby as to which Early
Settlement of the related Purchase Contracts is being elected:
If shares of Common Stock are REGISTERED HOLDER
to be registered in the name
of and delivered to and Please print name and address
Pledged Treasury Securities of Registered Holder:
are to be transferred to a
Person other than the Holder,
please print such Person's
name and address:
------------------------------ ------------------------------
Name Name
------------------------------ ------------------------------
Address Address
Social Security or other Taxpayer
Identification Number, if any
Transfer instructions for Pledged Treasury Securities
transferable upon Early Settlement [or a Termination Event]:
B-1
(TO BE ATTACHED TO GLOBAL CERTIFICATES)
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
Amount of Stated Amount
Decrease in Amount of of the Global
Stated Increase in Certificate
Amount of Stated Amount Following
the Global of the Global Such Decrease Signature of
Date Certificate Certificate or Increase Authorizing Officer
B-1
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
The Bank of New York,
as Custodial Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Equity Security Units of Northrop Grumman Corporation (the
"Company")
We hereby notify you in accordance with Section [4.1]
[4.2] of the Pledge Agreement, dated as of November __, 2001,
(the "Pledge Agreement") among the Company, you, as Collateral
Agent, Custodial Agent and Securities Intermediary and us, as
Purchase Contract Agent and as attorney-in-fact for the holders
of [Normal Units] [Stripped Units] from time to time, that the
holder of Units listed below (the "Holder") has elected to
substitute [$_____ aggregate principal amount of Treasury
Securities (CUSIP No. _________)] [$_______ aggregate principal
amount of Notes or $_____ aggregate principal amount of
Treasury Consideration (CUSIP No. _____) or the Applicable
Ownership Interest of the Treasury Portfolio, as the case may
be,] in exchange for the related [Pledged Notes, Pledged
Treasury Consideration or the appropriate Pledged Applicable
Ownership Interest of the Treasury Portfolio, as the case may
be,] [Pledged Treasury Securities] held by you in accordance
with the Pledge Agreement and has delivered to us a notice
stating that the Holder has Transferred [Treasury Securities]
[Notes, the Treasury Consideration or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] to you, as Collateral Agent. We hereby instruct
you, upon receipt of such [Pledged Treasury Securities]
[Pledged Notes, Pledged Treasury Consideration or the
appropriate Pledged Applicable Ownership Interest of the
Treasury Portfolio, as the case may be,], and upon the payment
by such Holder of any applicable fees, to release the [Notes,
the Treasury Consideration or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may
be,] [Treasury Securities] related to such [Normal Units]
[Stripped Units] to us in accordance with the Holder's
instructions. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
C-1
Date: _____________________
JPMORGAN CHASE Bank,
as Purchase Contract Agent
By:-----------------------
Name:
Title:
Please print name and address of Registered Holder electing to
substitute [Treasury Securities] [Notes, Treasury Consideration
or the appropriate Applicable Ownership Interest in the
Treasury Portfolio] for the [Pledged Notes, Pledged Treasury
Consideration or the appropriate Pledged Applicable Ownership
Interest in the Treasury Portfolio] [Pledged Treasury
Securities]:
Name:
Social Security or other
Taxpayer Identification Number,
if any:
Address:
C-2
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
JPMorgan Chase Bank,
as Purchase Contract Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Institutional Trust Services
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Re: Equity Security Units of Northrop Grumman Corporation (the
"Company")
The undersigned Holder hereby notifies you that it
has delivered to The Bank of New York, as Collateral Agent,
Custodial Agent and Securities Intermediary [$_______ aggregate
principal amount of Treasury Securities (CUSIP No. _________)]
[$_______ aggregate principal amount of Notes or $_____
principal amount of Treasury Consideration (CUSIP No. _____) or
the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be] in exchange for the related
[Pledged Notes, Pledged Treasury Consideration or the
appropriate Pledged Applicable Ownership Interest in the
Treasury Portfolio, as the case may be] [Pledged Treasury
Securities] held by the Collateral Agent, in accordance with
Section [4.1] [4.2] of the Pledge Agreement, dated November __,
2001 (the "Pledge Agreement"), among you, the Company and the
Collateral Agent. The undersigned Holder has paid the
Collateral Agent all applicable fees relating to such exchange.
The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned
Holder the [Pledged Notes, Pledged Treasury Consideration or
the appropriate Pledged Applicable Ownership Interest in the
Treasury Portfolio, as the case may be] [Pledged Treasury
Securities] related to such [Normal Units] [Stripped Units].
Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.
Date: ___________________ Signature:_________________________________
Signature Guarantee:------------------------
Please print name and address of Registered Holder:
Name:
Social Security or other Taxpayer Identification Number, if
any:
Address:
D-1
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
JPMorgan Chase Bank,
as Purchase Contract Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Institutional Trust Services
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Re: Equity Security Units of Northrop Grumman
Corporation (the "Company")
The undersigned Holder hereby irrevocably notifies
you in accordance with Section 5.5 of the Purchase Contract
Agreement dated as of _________, 2001 among the Company and
yourselves, as Purchase Contract Agent and as Attorney-in-Fact
for the Holders of the Purchase Contracts, that such Holder has
elected to pay to the Collateral Agent, on or prior to 11:00
a.m. New York City time, on the Business Day immediately
preceding the Stock Purchase Date, (in lawful money of the
United States by [certified or cashiers check or] wire
transfer, in each case in immediately available funds),
$_________ as the Purchase Price for the shares of Common Stock
issuable to such Holder by the Company under the related
Purchase Contract on the Stock Purchase Date. The undersigned
Holder hereby instructs you to notify promptly the Collateral
Agent of the undersigned Holder's election to make such cash
settlement with respect to the Purchase Contracts related to
such Holder's Normal Units.
Dated:_____________
----------------------------------
Signature
Signature
Guarantee:______________
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements include membership or participation in the
Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as
amended.
Please print name and address of Registered Holder:
Social Security or other Taxpayer Identification Number, if
any: ___________________
E-1