EXHIBIT 4.3
NORTHROP GRUMMAN CORPORATION
AND
JPMORGAN CHASE BANK,
AS PURCHASE CONTRACT AGENT
PURCHASE CONTRACT AGREEMENT
Dated as of November 21, 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..................................... 15
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO AGENT..................................... 16
SECTION 1.4 ACTS OF HOLDERS; RECORD DATES............................................ 16
SECTION 1.5 NOTICES.................................................................. 18
SECTION 1.6 NOTICE TO HOLDERS; WAIVER................................................ 19
SECTION 1.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS................................. 19
SECTION 1.8 SUCCESSORS AND ASSIGNS................................................... 19
SECTION 1.9 SEPARABILITY CLAUSE...................................................... 19
SECTION 1.10 BENEFITS OF AGREEMENT.................................................... 20
SECTION 1.11 GOVERNING LAW............................................................ 20
SECTION 1.12 LEGAL HOLIDAYS........................................................... 20
SECTION 1.13 COUNTERPARTS............................................................. 21
SECTION 1.14 INSPECTION OF AGREEMENT.................................................. 21
ARTICLE II. CERTIFICATE FORMS................................................................................ 21
SECTION 2.1 FORMS OF CERTIFICATES GENERALLY.......................................... 21
SECTION 2.2 FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION............................ 22
ARTICLE III. THE UNITS....................................................................................... 22
SECTION 3.1 TITLE AND TERMS; DENOMINATIONS........................................... 22
SECTION 3.2 RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES..................... 23
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING........................... 24
SECTION 3.4 TEMPORARY CERTIFICATES................................................... 25
SECTION 3.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE...................... 25
SECTION 3.6 BOOK-ENTRY INTERESTS..................................................... 27
SECTION 3.7 NOTICES TO HOLDERS....................................................... 28
SECTION 3.8 APPOINTMENT OF SUCCESSOR CLEARING AGENCY................................. 28
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SECTION 3.9 DEFINITIVE CERTIFICATES.................................................. 28
SECTION 3.10 MUTILATED, DESTROYED, LOST AND STOLEN CERTIFICATES....................... 29
SECTION 3.11 PERSONS DEEMED OWNERS.................................................... 30
SECTION 3.12 CANCELLATION............................................................. 31
SECTION 3.13 ESTABLISHMENT OF STRIPPED UNITS.......................................... 31
SECTION 3.14 REESTABLISHMENT OF NORMAL UNITS.......................................... 33
SECTION 3.15 TRANSFER OF COLLATERAL UPON OCCURRENCE OF TERMINATION EVENT.............. 35
SECTION 3.16 NO CONSENT TO ASSUMPTION................................................. 36
ARTICLE IV. THE NOTES........................................................................................ 36
SECTION 4.1 PAYMENT OF INTEREST; RIGHTS TO INTEREST PAYMENTS PRESERVED; NOTICE....... 36
SECTION 4.2 NOTICE AND VOTING........................................................ 37
SECTION 4.3 TAX EVENT REDEMPTION..................................................... 38
ARTICLE V. THE PURCHASE CONTRACTS; THE REMARKETING........................................................... 39
SECTION 5.1 PURCHASE OF SHARES OF COMMON STOCK....................................... 39
SECTION 5.2 CONTRACT ADJUSTMENT PAYMENTS............................................. 41
SECTION 5.3 DEFERRAL OF CONTRACT ADJUSTMENT PAYMENTS................................. 42
SECTION 5.4 PAYMENT OF PURCHASE PRICE: REMARKETING................................... 44
SECTION 5.5 ISSUANCE OF SHARES OF COMMON STOCK....................................... 49
SECTION 5.6 ADJUSTMENT OF SETTLEMENT RATE............................................ 50
SECTION 5.7 NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS........................... 58
SECTION 5.8 TERMINATION EVENT; NOTICE................................................ 59
SECTION 5.9 EARLY SETTLEMENT......................................................... 59
SECTION 5.10 EARLY SETTLEMENT UPON MERGER............................................. 61
SECTION 5.11 CHARGES AND TAXES........................................................ 63
SECTION 5.12 NO FRACTIONAL SHARES..................................................... 63
ARTICLE VI. REMEDIES......................................................................................... 64
SECTION 6.1 UNCONDITIONAL RIGHT OF HOLDERS TO PURCHASE COMMON STOCK.................. 64
SECTION 6.2 RESTORATION OF RIGHTS AND REMEDIES....................................... 64
SECTION 6.3 RIGHTS AND REMEDIES CUMULATIVE........................................... 64
SECTION 6.4 DELAY OR OMISSION NOT WAIVER............................................. 65
SECTION 6.5 UNDERTAKING FOR COSTS.................................................... 65
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SECTION 6.6 WAIVER OF STAY OR EXTENSION LAWS......................................... 65
ARTICLE VII. THE AGENT....................................................................................... 65
SECTION 7.1 CERTAIN DUTIES, RIGHTS AND IMMUNITIES.................................... 65
SECTION 7.2 NOTICE OF DEFAULT........................................................ 68
SECTION 7.3 CERTAIN RIGHTS OF AGENT.................................................. 68
SECTION 7.4 NOT RESPONSIBLE FOR RECITALS, ETC........................................ 69
SECTION 7.5 MAY HOLD UNITS AND OTHER DEALINGS........................................ 69
SECTION 7.6 MONEY HELD IN CUSTODY.................................................... 69
SECTION 7.7 COMPENSATION AND REIMBURSEMENT........................................... 69
SECTION 7.8 CORPORATE AGENT REQUIRED; ELIGIBILITY.................................... 70
SECTION 7.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR........................ 71
SECTION 7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR................................... 72
SECTION 7.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.............. 73
SECTION 7.12 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS................... 73
SECTION 7.13 FAILURE TO ACT........................................................... 73
SECTION 7.14 NO OBLIGATIONS OF AGENT.................................................. 74
SECTION 7.15 TAX COMPLIANCE........................................................... 74
ARTICLE VIII. SUPPLEMENTAL AGREEMENTS........................................................................ 75
SECTION 8.1 SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS....................... 75
SECTION 8.2 SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS.......................... 75
SECTION 8.3 EXECUTION OF SUPPLEMENTAL AGREEMENTS..................................... 77
SECTION 8.4 EFFECT OF SUPPLEMENTAL AGREEMENTS........................................ 77
SECTION 8.5 REFERENCE TO SUPPLEMENTAL AGREEMENTS..................................... 77
ARTICLE IX. CONSOLIDATION, MERGER, SALE OR CONVEYANCE........................................................ 78
SECTION 9.1 COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY PROPERTY EXCEPT UNDER
CERTAIN CONDITIONS....................................................... 78
SECTION 9.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION............................... 78
SECTION 9.3 OPINION OF COUNSEL GIVEN TO AGENT........................................ 79
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ARTICLE X. COVENANTS......................................................................................... 79
SECTION 10.1 PERFORMANCE UNDER PURCHASE CONTRACTS..................................... 79
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY.......................................... 79
SECTION 10.3 COMPANY TO RESERVE COMMON STOCK.......................................... 80
SECTION 10.4 COVENANTS AS TO COMMON STOCK............................................. 80
SECTION 10.5 STATEMENTS OF OFFICER OF THE COMPANY AS TO DEFAULT....................... 80
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PURCHASE CONTRACT AGREEMENT, dated as of November 21, 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;
(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
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(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 November 15, 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).
"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
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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.
"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.
"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
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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 part of such Unit, equal to 2.0% 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 450 West 33/rd/
Street, New York, New York 10001.
"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
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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.
"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 November 21, 2001,
between the Company and the Trustee as supplemented by any officers' certificate
or supplemental indenture.
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"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).
"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 5.25% Senior Notes due 2006, to be issued under the Indenture,
dated as of November 21, 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.
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"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 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.
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"Payment Date" means each February 16, May 16, August 16 and
November 16, commencing February 16, 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 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
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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.
"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 J.P. Morgan Securities Inc. or Salomon
Smith Barney Inc., or a successor of either 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, in the case of a Tax Event
Redemption occurring prior to a successful remarketing of the Notes, 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 aggregate principal amount of Notes outstanding on the Tax
Event Redemption Date, and in the case of a Tax Event Redemption occurring after
a successful remarketing of the Notes, for each Note the Stated Amount of the
Note.
"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.
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"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
August 16, 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) immediately preceding October 1, 2004;
or (iii) immediately preceding November 16, 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
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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 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 November 16, 2004.
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"Stripped Unit" means the collective rights and 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, Richter & Hampton 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 November 15, 2001, which amendment, change or proposed
change is effective or which interpretation or pronouncement is announced on or
after November 15, 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 remarketing of the Notes,
for each Note the product of the principal amount of the Note and a fraction
whose numerator
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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 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.
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"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 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 912833FV7) 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.
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"Underwriting Agreement" means the Underwriting Agreement
relating to the Units dated November 15, 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 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.
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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.
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.
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(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 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
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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 delivered by overnight
air courier guaranteeing next day delivery, to the Agent at 450 West 33rd
Street, New York, New York 10001, Attention: Institutional Trust Services,
telecopy: 212-946-8160, 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, 1840 Century Park East, Los Angeles, CA 90067,
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 The Bank of New York, 101 Barclay
Street, New York, New York 10286, Attention: Corporate Trust Office, 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
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prepaid, telecopied or delivered by overnight air courier guaranteeing next
day delivery, addressed to the Trustee at 450 West 33rd Street, New York,
New York 10001, Attention: Institutional Trust Services, telecopy: 212-946-
8160 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 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.
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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.
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.
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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.
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
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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, 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 6,000,000 (6,900,000 if the
Underwriters' (as defined in the Underwriting Agreement) over-allotment
option pursuant to the Underwriting Agreement is exercised in full), except
for
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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.
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
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Stripped 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.
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.
(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
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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.
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
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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 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
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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 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;
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(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.
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
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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
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.
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(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.
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, thing 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
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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 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
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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 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 to such Holder 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
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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.
(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
-33-
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.
(d) Holders of Stripped Units who reestablish Normal
Units shall be responsible for any fees or expenses payable to the
Collateral Agent for
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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 Pledged Notes, the Pledged Treasury
Consideration or Pledged Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, with the Collateral Agent, the Treasury
Securities 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 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
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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.
(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
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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 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
-37-
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 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.
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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 $107.97 (the "Threshold Appreciation Price"),
0.9262 shares of Common Stock per Purchase Contract,
(ii) if the Applicable Market Value is less than the
Threshold Appreciation Price, but is greater than $88.50, 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
(iii) if the Applicable Market Value is equal to or less
than $88.50, 1.1299 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
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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 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
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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 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
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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 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
5.25% 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.
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(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 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;
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(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 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
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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 immediately
preceding the Remarketing Date, no later than by 10:00 a.m. New York
City time, pursuant to 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
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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 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
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preceding October 1, 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 October 1, 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 October 1, 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 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
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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 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.
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(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.
(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 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
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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 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
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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 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
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subdivision or split becomes effective 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 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
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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 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
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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
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
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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
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
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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
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
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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"),
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.
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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 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,
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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 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
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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, 0.9262 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
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,
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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 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);
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(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
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
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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.
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
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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,
(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.
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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.
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
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of this Agreement, the Pledge Agreement, the Remarketing Agreement, the Notes
and the Units, and any documents evidencing thereof or related thereto (the
"Transaction 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;
(5) shall not be required to initiate or conduct any litigation
or collection proceedings hereunder;
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(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, and regardless of the form of action.
(d) Whether or not therein expressly so provided, every provision of
every Transaction Document relating to the conduct or affecting the liability of
or 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
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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 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
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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 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:
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(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 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
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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.
(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
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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.
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.
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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.
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
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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 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).
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(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.
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
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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:
(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
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be effective except with the consent of Holders of not less than a majority or
100% of such class, as the case may be.
(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.
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ARTICLE IX.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
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 evidencing Units issuable hereunder which theretofore shall
not have been signed by the
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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 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
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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.
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
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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.
[SIGNATURE PAGES FOLLOW]
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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: /s/ John H. Mullan
------------------------------
Name: John H. Mullan
Title: Corporate Vice President and
Secretary
JPMORGAN CHASE BANK
as Purchase Contract Agent
By: /s/ James P. Freeman
------------------------------
Name: James P. Freeman
Title: Vice President
-1-
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 Water Street, New York, New
York) 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 5.25% 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 Ownership Interest in the
A-1
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 February 16, May 16, August 16 and November 16 each
year, commencing February 16, 2002 (a "Payment Date"), shall, subject to receipt
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.
A-2
Each Purchase Contract evidenced hereby obligates the Holder of
this Normal Units Certificate to purchase, and the Company to sell, on November
16, 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 2.0% 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 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
A-3
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 November 21, 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 $107.97 (the "Threshold Appreciation Price"), 0.9262
shares of Common Stock per Purchase Contract, (b) if the Applicable Market Value
is less than the Threshold Appreciation Price but is greater than $88.50, 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 $88.50, 1.1299 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 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Stock Purchase Date.
-1-
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 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.
-2-
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 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
-3-
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 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 5.25% 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
-4-
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 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
-5-
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.
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.
-6-
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 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.
-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.
-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 in the name REGISTERED HOLDER
of and delivered to a Person other than the
Holder, please (i) print such Person's Please print name and address of
name and address and (ii) provide a Registered Holder:
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 to be REGISTERED HOLDER
registered in the name of and delivered to
and Pledged Notes, Pledged Treasury Please print name and address of
Consideration or Pledged Applicable Registered Holder:
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:
_________________________________________ _____________________________________
Name Name
_________________________________________ _____________________________________
Address Address
-1-
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 State 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 Water Street, New York, New York) 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 hereby has been pledged to the Collateral
Agent,
B-1
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 November 16,
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 2.0% 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 Stripped 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.
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.
B-2
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 November 21, 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 $107.97 (the "Threshold Appreciation Price"), 0.9262
shares of Common Stock per Purchase Contract, (b) if the Applicable Market Value
is less than the Threshold Appreciation Price but is greater than $88.50, 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 $88.50, 1.1299 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.
B-1
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.
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.
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
B-2
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 Stripped 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 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 5.25% 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
B-3
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 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
B-4
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 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
B-5
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 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-6
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 in the REGISTERED HOLDER
name of and delivered to a Person other
than the Holder, please (i) print such Please print name and address of
Person's name and address and (ii) Registered Holder:
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 to REGISTERED HOLDER
be registered in the name of and
delivered to and Pledged Treasury Please print name and address of
Securities are to be transferred Registered Holder:
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
B-1
Transfer instructions for Pledged Treasury Securities transferable
upon Early Settlement [or a Termination Event]:
B-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:
Stated Amount of
Amount of Decrease Amount of Increase the Global
in Stated Amount in Stated Amount of Certificate
of the Global the Global Following Such Signature of Authorizing
Date Certificate Certificate Decrease or Increase Officer
B-1
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
The Bank of New York,
as Collateral Agent
101 Barclay Street
New York, NY 10286
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 21, 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
450 West 33/rd/ Street
New York, NY 10001
Attn: Institutional Trust Services
Telecopy: (212) 946-8160
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 21,
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
450 West 33/rd/ Street
New York, NY 10001
Attn: Institutional Trust Services
Telecopy: (212) 946-8160
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 November 21,
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