dated as of February 10, 1998 (the
"") between AlliedSignal Inc., a Delaware
corporation (the "Company"), and X.X. Xxxxxx Securities Inc.
("JPMSI" and, in its capacity as the remarketing dealer hereunder,
the "Remarketing Dealer").
WHEREAS, the Company has issued $200,000,000 aggregate
principal amount of its 5-3/4% Dealer remarketable securitiesSM*
"Dealer remarketable securities " and "Drs. " are service
marks of X.X. Xxxxxx Securities Inc. Due March 15, 2011 ("Drs." )
pursuant to an Indenture dated as of October 1, 1985, as
supplemented (the "Indenture"), between the Company and The Chase
Manhattan Bank, as trustee (the "Trustee"); and
WHEREAS, the Drs. are being sold initially pursuant to an
Underwriting Agreement dated February 5, 1998 (the "Underwriting
Agreement") between the Company and JPMSI, Xxxxxxx, Xxxxx & Co.
and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (the
"Underwriters"); and
WHEREAS, the Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement
(No. 33-64245) under the Securities Act of 1933, as amended (the
"Securities Act"), in connection with the offering of debt
securities, including the Drs., which registration statement was
declared effective by order of the Commission, and has filed such
amendments thereto and such amended or supplemented prospectuses
as may have been required to the date hereof, and will file such
additional amendments and supplements thereto and such additional
amended or supplemented prospectuses as may hereafter be required
(such registration statement, including any amendments and
supplements thereto, and all documents incorporated therein by
reference, as from time to time amended or supplemented pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Securities Act, or otherwise, are referred to herein
as the "Registration Statement"); all preliminary and final
prospectuses relating to such Registration Statement used in
connection with the offering of Drs., including the documents
incorporated by reference therein, are referred to herein
collectively as the "Prospectus"; provided that, if any revised
prospectus shall be provided to the Remarketing Dealer by the
Company for use in connection with the remarketing of the Drs.
which differs from the Prospectus filed with the Commission at
the time of the initial issuance of the Drs. (whether or not such
revised prospectus is required to be filed by the Company
pursuant to Rule 424(b) under the Securities Act), the term
"Prospectus" shall refer to such revised prospectus from and
after the time it is first provided to the Remarketing Dealer for
such use; and
WHEREAS, JPMSI is prepared to act as the Remarketing Dealer
with respect to the remarketing of the Drs. on March 15, 2001
(the "Remarketing Date") pursuant to the terms of, but subject to
the conditions set forth in, this Agreement;
NOW, THEREFORE, for and in consideration of the covenants
herein made, and subject to the conditions herein set forth, the
parties hereto agree as follows:
Section 1 . Definitions. Capitalized terms used and not
defined in this Agreement shall have the meanings assigned to
them in the Indenture and the form of the Drs.
Section 2. Representations and Warranties. The Company
represents and warrants to the Remarketing Dealer as of the date
hereof, the Notification Date (as defined below), the
Determination Date (as defined below) and the Remarketing Date
(each of the foregoing dates being hereinafter referred to as a
"Representation Date"), as follows:
(i) It has filed all reports and any definitive proxy or
information statements required to be filed by the Company with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act (collectively, the "Exchange Act Documents").
(ii) The applicable Remarketing Materials (as defined
below) will not, as of their date or the Remarketing Date,
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(iii) The representations and warranties contained
in the Underwriting Agreement are true and correct with the same
force and effect as though expressly made at and as of the
Representation Date.
(iv) The Company's authorized equity capitalization is
as set forth in the Exchange Act Documents; the Drs. conform to
the description thereof contained in the Prospectus.
(v) Each of the Company and each subsidiary of the
Company that is a "significant subsidiary" as defined in Rule 405
of Regulation C promulgated under the Securities Act (each a
"Significant Subsidiary" and collectively the "Significant
Subsidiaries") has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate power and authority to own its properties and conduct
its business as described in the Exchange Act Documents, and is
duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which requires
such qualification wherein it owns or leases material properties
or conducts material business.
(vi) All the outstanding shares of capital stock of
each Significant Subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Exchange Act Documents, all
outstanding shares of capital stock of the Significant
Subsidiaries (except for directors' qualifying shares) are owned
by the Company either directly or through wholly-owned
subsidiaries free and clear of any perfected security interest
and, to the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encumbrances.
(vii) This Agreement has been duly authorized,
executed and delivered by the Company.
(viii) The Indenture has been duly authorized,
executed and delivered; the Indenture has been duly qualified
under the Trust Indenture Act; the Indenture constitutes a valid
and legally binding instrument enforceable against the Company in
accordance with its terms, except that such enforcement may be
subject to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally
and general principles of equity from time to time in effect; and
the Drs. have been duly authorized and constitute valid and
legally binding obligations of the Company entitled to the
benefits of the Indenture.
(ix) There is no pending or, to the best knowledge of
senior officers of the Company, threatened action, suit or
proceeding before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of its
subsidiaries of a character required to be disclosed in the
Exchange Act Documents which is not adequately disclosed in the
Exchange Act Documents, and there is no franchise, contract or
other document of a character required to be described in the
Exchange Act Documents, or to be filed as an exhibit thereto,
which is not described or filed as required; and the statements
included or incorporated in the Exchange Act Documents describing
any legal proceedings or material contracts or agreements
relating to the Company and its subsidiaries fairly summarize the
matters therein described.
(x) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated herein, except such
as have been obtained under the Securities Act and such as may be
required under the blue sky laws of any jurisdiction in
connection with the remarketing of the Drs. by the Remarketing
Dealer and such other approvals as have been obtained.
(xi) Neither this Agreement, nor the consummation of
the transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach or violation
of, or constitute a default under the certificate of
incorporation or by-laws of the Company or the terms of any
indenture or other agreement or instrument to which the Company
or any of its Significant Subsidiaries is a party or bound, or
any order of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the
Company or any of its Significant Subsidiaries.
Section 3. Covenants of the Company. The Company covenants
with the Remarketing Dealer as follows:
(a) The Company will provide prompt notice by telephone,
confirmed in writing (which may include facsimile or other
electronic transmission), to the Remarketing Dealer of the
occurrence (x) at any time of any event set forth in clause (ii),
(v) or (vi) of subsection 8(c) hereof and (y) on or after the
Notification Date, of any other event set forth in clause (i),
(iii)(a) or (vii) of subsection 8(c) hereof.
( b) The Company will furnish to the Remarketing Dealer
upon request:
(i) each Registration Statement and the Prospectus relating
to the Drs. (including in each case any amendment or supplement
thereto and each document incorporated therein by reference),
other than Exchange Act Documents publicly available on the
Commission's internet website, and
(ii) in connection with the remarketing of Drs., such
other publicly available written information as the Remarketing
Dealer may reasonably request from time to time, other than
Exchange Act Documents publicly available on the Commission's
internet website.
The Company agrees to provide the Remarketing Dealer with as
many copies of the foregoing written materials and other
Company-approved information as the Remarketing Dealer may
reasonably request for use in connection with the remarketing of
Drs. and consents to the use thereof for such purpose.
(a) If, at any time during which the Remarketing Dealer would
be obligated to take any action under this Agreement, any event
or condition known to the Company relating to or affecting the
Company, any subsidiary thereof or the Drs. shall occur which
could reasonably be expected to cause any of the reports,
documents, materials or information referred to in paragraph (b)
above, any Exchange Act Documents, or any document incorporated
therein by reference (collectively, the "Remarketing Materials")
to contain an untrue statement of a material fact or omit to
state a material fact, the Company shall promptly notify the
Remarketing Dealer in writing of the circumstances and details of
such event or condition.
(b) So long as the Drs. are outstanding, the Company
will file all documents required to be filed with the Commission
pursuant to the Exchange Act within the time periods required by
the Exchange Act and the rules and regulations thereunder.
(c) The Company will comply with the Securities Act,
the Exchange Act, the Trust Indenture Act and the rules and
regulations of the Commission thereunder so as to permit the
completion of the remarketing of the Drs. as contemplated in this
Agreement, in the Prospectus first used to confirm sales of the
Drs. when the Drs. were originally issued, and in the prospectus,
if any, used in connection with the remarketing.
(d) If at any time when a prospectus is required by
the Securities Act to be delivered in connection with sales of
the Drs., any event shall occur or condition shall exist as a
result of which it is necessary, in the reasonable opinion of
counsel for the Remarketing Dealer or for the Company, to amend
the Registration Statement or amend or supplement any Prospectus
in order that such Prospectus will not include any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to file a new
registration statement or issue a new prospectus in order to
comply with the requirements of the Securities Act or the rules,
regulations or interpretations of the Commission thereunder, the
Company, at its expense, will promptly:
(i) prepare and file with the Commission such amendment or
supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus
comply with such requirements, or prepare and file any such new
registration statement and prospectus as may be necessary for
such purpose,
(ii) furnish to the Remarketing Dealer such number of
copies of such amendment, supplement or other document as the
Remarketing Dealer may reasonably request;
(iii) furnish to the Remarketing Dealer an
officers' certificate, an opinion, including a statement as to
the absence of material misstatements in or omissions from the
Registration Statement and the Prospectus, as amended or
supplemented, of the General Counsel, a Deputy General Counsel or
a Senior Counsel, Corporate and Finance of the Company reasonably
satisfactory to the Remarketing Dealer and a "comfort letter"
from the Company's independent accountants, in each case in form
and substance satisfactory to the Remarketing Dealer, of the same
tenor as the officers' certificate, opinion and comfort letter,
respectively, delivered pursuant to the Underwriting Agreement,
but modified to relate to the Registration Statement and the
Prospectus as amended or supplemented to the date thereof or such
new registration statement and prospectus; and
(iv) provide to the Remarketing Dealer and any other
securities dealer participating in the remarketing of the Drs.
the opportunity to conduct an underwriters' due diligence
investigation of the Company in a scope customarily provided in
connection with a public offering of the Company's debt
securities.
(e) The Company agrees that neither it nor any of its
subsidiaries or affiliates shall purchase or otherwise acquire,
or enter into any agreement to purchase or otherwise acquire, any
of the Drs. prior to the remarketing thereof by the Remarketing
Dealer, other than a repurchase of the Drs. in accordance with
subsection 4(g) or a redemption of the Drs. in accordance with
subsection 4(h) of this Agreement.
(f) The Company will comply with each of the covenants
set forth in the Underwriting Agreement.
(g) In connection with the remarketing, the Company
will arrange for the qualification of the Drs. for sale under the
laws of such jurisdictions as the Remarketing Dealer may
designate, and will maintain such qualifications in effect so
long as required for the remarketing of the Drs.; the Company
will pay all expenses in connection with such qualification,
including the fees and disbursements of counsel for any dealers
participating in the remarketing in connection with such
qualification and in connection with blue sky and legal
investment surveys.
(h) During the five Business Day period ending on the
Remarketing Date, the Company will not, without the consent of
the Remarketing Dealer, offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, or announce the
offering of, any debt securities or warrants covered by the
Registration Statement or any other registration statement filed
under the Securities Act.
Section 4. Appointment and Obligations of the Remarketing
Dealer.
(i) Unless this Agreement is otherwise terminated in
accordance with Section 10 hereof, in accordance with the terms,
but subject to the conditions, of this Agreement, the Company
hereby appoints JPMSI, and JPMSI hereby accepts such appointment,
as the exclusive Remarketing Dealer with respect to the Drs.,
subject further to repurchase of the Drs. in accordance with
subsection 4(g) or redemption of the Drs. in accordance with
subsection 4(h).
(j) The obligations of the Remarketing Dealer hereunder to
repurchase the Drs. for remarketing on the Remarketing Date are
conditioned on (i) the issuance and delivery of such Drs.
pursuant to the terms and conditions of the Underwriting
Agreement and (ii) the Remarketing Dealer's election on the
Notification Date to purchase the Drs. for remarketing on the
Remarketing Date. If the Remarketing Dealer has elected to
remarket the Drs. pursuant to subsection 4(c), the Remarketing
Dealer shall not be obligated to set the Interest Rate to
Maturity (as defined below) on any Drs., to remarket any Drs. or
to perform any of the other duties set forth herein at any time
after the Notification Date that (i) any of the conditions set
forth in subsection 8(a) or 8(b) hereof shall not have been fully
and completely met to the satisfaction of the Remarketing Dealer,
or (ii) any of the events set forth in subsection 8(c) hereof
shall have occurred.
(k) On a Business Day not later than five Business
Days prior to the Remarketing Date (the "Notification Date"), the
Remarketing Dealer will notify the Company and the Trustee as to
whether it elects to purchase the Drs. on the Remarketing Date.
If, and only if, the Remarketing Dealer so elects, the Drs. shall
be subject to mandatory tender to the Remarketing Dealer for
purchase and remarketing on the Remarketing Date, upon the terms
and subject to the conditions described herein. The purchase
price of the Drs. shall be equal to 100% of the principal amount
thereof.
(l) The Remarketing Dealer shall determine a new
stated interest rate on the Drs. as of the Remarketing Date (the
"Interest Rate to Maturity") on the third Business Day
immediately preceding the Remarketing Date (the "Determination
Date") by soliciting by 3:30 p.m., New York City time, the
Reference Corporate Dealers (defined below) for firm committed
bids to purchase all outstanding Drs. at the Dollar Price
(defined below), and by selecting the lowest such firm committed
bid (regardless of whether each of the Reference Corporate
Dealers actually submit bids). Each bid shall be expressed in
terms of the Interest Rate to Maturity that the Drs. would bear
(quoted as a spread over 5.50% per annum (the "Base Rate")) based
on the following assumptions: (i) the Drs. would be issued on the
Remarketing Date for settlement on the same day; (ii) the Drs.
would mature on the Stated Maturity Date; (iii) the Drs. would
bear interest from the Remarketing Date at a stated rate equal to
the Interest Rate to Maturity bid by such Reference Corporate
Dealer, payable semi-annually on the interest payment dates for
the Drs. and (iv) the winning bidder will bear all of its own
expenses (including legal fees) in connection with the
remarketing. The Interest Rate to Maturity announced by the
Remarketing Dealer as a result of such process will be quoted to
the nearest one hundred-thousandth (0.00001) of one percent per
annum and, absent manifest error, will be binding and conclusive
upon holders of the Drs., the Company and the Trustee. The
Remarketing Dealer shall have the discretion to select the time
at which the Comparable Treasury Price is determined on the
Determination Date.
"Dollar Price" means the discounted present value to the
Remarketing Date of the cash flows on a bond (x) with a principal
amount equal to the aggregate principal amount of the Drs., (y)
maturing on the Stated Maturity Date and (z) bearing interest
from the Remarketing Date, payable semi-annually (assuming a
360-day year consisting of twelve 30-day months) on the interest
payment dates of the Drs. at a rate equal to the Base Rate, using
a discount rate equal to the Treasury Rate (defined below).
"Reference Corporate Dealer" means X.X. Xxxxxx Securities
Inc., Xxxxxxx, Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, and two other leading dealers of publicly-traded
debt securities of the Company to be chosen by the Remarketing
Dealer. If any of such persons shall cease to be a leading
dealer of publicly-traded debt securities of the Company, then
the Remarketing Dealer may replace such person with any other
leading dealer of publicly-traded debt securities of the Company.
"Treasury Rate" means the annual rate equal to the semi-
annual equivalent yield to maturity or interpolated (on a 30/360
day count basis) yield to maturity on the Determination Date of
the Comparable Treasury Issues (defined below) for value on the
Remarketing Date, assuming a price for the Comparable Treasury
Issues (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price (as defined below).
"Comparable Treasury Issues" means the United States
Treasury security or securities selected by the Remarketing
Dealer as having an actual or interpolated maturity or maturities
on the Determination Date comparable to the remaining term of the
Drs.
"Comparable Treasury Price" means (a) the offer prices for
the Comparable Treasury Issues (expressed in each case as a
percentage of its principal amount) on the Determination Date, as
set forth on Telerate Page 500 (as defined below), adjusted to
reflect settlement on the Remarketing Date if prices quoted on
Telerate Page 500 are for settlement on any date other than the
Remarketing Date, or (b) if such page (or any successor page) is
not displayed or does not contain such offer prices on such
Business Day, (i) the average of five Reference Treasury Dealer
Quotations for such Remarketing Date, after excluding the highest
and lowest of such Reference Treasury Dealer Quotations, or (ii)
if the Remarketing Dealer obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Reference
Treasury Dealer Quotations. "Telerate Page 500" means the
display designated as "Telerate Page 500" on Dow Xxxxx Markets
Limited (or such other page as may replace Telerate Page 500 on
such service) or such other service displaying the offer prices
specified in (a) above as may replace Dow Xxxxx Markets Limited.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer, the offer price(s) for the
Comparable Treasury Issues (expressed in each case as a
percentage of its principal amount) for settlement on the
Remarketing Date, quoted in writing to the Remarketing Dealer by
such Reference Treasury Dealer by 3:30 p.m. on the Determination
Date.
"Reference Treasury Dealer" means a primary U.S. Government
securities dealer in The City of New York (which may include the
Remarketing Dealer) selected by the Remarketing Dealer.
(a) If the Remarketing Dealer has elected to remarket the
Drs. as provided in subsections 4(c) and 4(d), then it shall
notify the Company, the Trustee and The Depository Trust Company
("DTC") by telephone, confirmed in writing (which may include
facsimile or other electronic transmission), by 5:00 p.m., New
York City time, on the Determination Date of the Interest Rate to
Maturity applicable to the Drs. effective from and including the
Remarketing Date.
(b) If the Drs. are remarketed as provided herein, the
Remarketing Dealer will make, or cause the Trustee to make,
payment to DTC by the close of business on the Remarketing Date
against delivery through DTC of the Drs., of the purchase price
for all of the Drs. The purchase price of the Drs. will be equal
to 100% of the principal amount thereof.
(i) If the Remarketing Dealer does not elect to purchase the
Drs. for remarketing pursuant to subsection 4(c) of this
Agreement, (ii) shall not have received by the required time on
the Determination Date any firm, committed bids to purchase all
of the Drs. in accordance with subsection 4(d) of this Agreement
or (iii) for any other reason does not purchase all of the Drs.
on the Remarketing Date, then the Company shall repurchase on the
Remarketing Date any Drs. that have not been purchased by the
Remarketing Dealer at a price equal to 100% of the principal
amount of the Drs. plus all accrued interest, if any, on the Drs.
to (but excluding) the Remarketing Date.
(c) If the Remarketing Dealer has elected to remarket the
Drs. on the Remarketing Date in accordance with subsection 4(c)
hereof, the Company may irrevocably elect to exercise its right
to redeem the Drs., in whole but not in part, from the
Remarketing Dealer on the Remarketing Date at the greater of (x)
100% of the aggregate principal amount of the Drs. and (y) the
Dollar Price, by giving notice of such election to the
Remarketing Dealer no later than
(i) the Business Day immediately prior to the Determination
Date or
(ii) if fewer than three Reference Corporate Dealers
submit firm, committed bids in accordance with subsection 4(d)
hereof, immediately after the deadline set by the Remarketing
Dealer for receiving such bids has passed.
In either such case, the Company shall pay such redemption price
for the Drs. in same-day funds by wire transfer on the
Remarketing Date to an account designated by the Remarketing
Dealer.
If the Company exercises its right to redeem the Drs.
pursuant to clause (ii) above, it shall promptly reimburse the
Remarketing Dealer for any and all expenses (including any and
all hedge losses) incurred by the Remarketing Dealer in
connection with its having to break associated hedging
transactions to enable the Company to exercise such redemption
right. If any such broken xxxxxx result in a profit to the
Remarketing Dealer, the Remarketing Dealer shall promptly pay
such profit over to the Company. The amount of any hedge losses
or profits shall be determined solely by the Remarketing Dealer,
on a reasonable basis.
(a) In accordance with the terms and provisions of the Drs.,
the tender and settlement procedures set forth in this Section 4,
shall be subject to modification without the consent of the
holders of the Drs., to the extent required by DTC or, if the
book-entry system is no longer available for the Drs. at the time
of the remarketing, to the extent required to facilitate the
tendering and remarketing of Drs. in certificated form. In
addition, the Remarketing Dealer may, without the consent of the
holders of the Drs., modify the settlement procedures set forth
in the Indenture and/or the Drs. in order to facilitate the
settlement process.
(b) In accordance with the terms and provisions of the
Drs., the Company hereby agrees that at all times,
notwithstanding any provision to the contrary set forth in the
Indenture, (i) it will use its best efforts to maintain the Drs.
in book-entry form with DTC or any successor thereto and to
appoint a successor depository to the extent necessary to
maintain the Drs. in book-entry form and (ii) it will waive any
discretionary right it otherwise may have under the Indenture to
cause the Drs. to be issued in certificated form.
Section 5 . Fees and Expenses. Subject to Section 10 of this
Agreement, the Remarketing Dealer will not receive any fees or
reimbursement of expenses from the Company for its remarketing
services set forth herein.
Section 6. Resignation of the Remarketing Dealer. The
Remarketing Dealer may resign and be discharged from its duties
and obligations hereunder at any time, such resignation to be
effective 10 Business Days after delivery of a written notice to
the Company and the Trustee of such resignation. The Remarketing
Dealer also may resign and be discharged from its duties and
obligations hereunder at any time, such resignation to be
effective immediately, upon termination of this Agreement in
accordance with subsection 10(b) hereof. The Company shall have
the right, but not the obligation, to appoint a successor
Remarketing Dealer.
Section 7. Dealing in the Drs.; Purchase of Drs. by the
Company. JPMSI, when acting as the Remarketing Dealer or in its
individual or any other capacity, may, to the extent permitted by
law, buy, sell, hold and deal in any of the Drs. JPMSI, as
holder or beneficial owner of the Drs., may exercise any vote or
join as a holder or beneficial owner, as the case may be, in any
action which any holder or beneficial owner of Drs. may be
entitled to exercise or take pursuant to the Indenture with like
effect as if it did not act in any capacity hereunder. The
Remarketing Dealer, in its capacity either as principal or agent,
may also engage in or have an interest in any financial or other
transaction with the Company as freely as if it did not act in
any capacity hereunder.
(b) The Company may purchase Drs. in the remarketing,
provided that the Interest Rate to Maturity established with
respect to Drs. in the remarketing is not different from the
Interest Rate to Maturity that would have been established if the
Company had not purchased such Drs.
Section 8. Conditions to Remarketing Dealer's Obligations.
The obligations of the Remarketing Dealer under this Agreement
have been undertaken in reliance on, and shall be subject to, the
following:
(a) the due performance in all material respects by the
Company of its obligations and agreements as set forth in this
Agreement and the accuracy of the representations and warranties
in this Agreement and any certificate delivered pursuant hereto;
(b) the due performance in all material respects by
the Company of its obligations and agreements set forth in, and
the accuracy in all material respects as of the dates specified
therein of the representations and warranties contained in, the
Underwriting Agreement;
(c) none of the following events shall have occurred
after the Remarketing Dealer elects on the Notification Date to
remarket the Drs.:
(i) there shall have occurred any decrease in the rating of
any of the Company's debt securities by any "nationally
recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) or any notice
shall have been given of any intended or potential decrease in
any such rating or of a possible change in any such rating that
does not indicate the direction of the possible change;
(ii) without the prior written consent of the
Remarketing Dealer, the Indenture (including the Drs.) shall have
been amended in any manner, or otherwise contain any provision
not contained therein as of the date hereof, that in either case
in the judgment of the Remarketing Dealer materially changes the
nature of the Drs. or the remarketing procedures;
(iii) (a) trading in the Company's common stock
shall have been suspended by the Commission or the New York Stock
Exchange or (b) trading in securities generally on the New York
Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such exchange, or a banking
moratorium shall have been declared either by Federal or New York
State authorities;
(iv) there shall have occurred any outbreak or material
escalation of major hostilities in which the United States is
involved, or a declaration of war by the Congress of the United
States, or other substantial national or international calamity
or crisis the effect of which on the financial markets of the
United States is such as to make it, in the judgment of the
Remarketing Dealer, impracticable or inadvisable to proceed with
the remarketing of the Drs. or the delivery of the Drs. to
investors after the remarketing;
(v) an Event of Default (as defined in the Indenture),
or any event which, with the giving of notice or passage of time,
or both, would constitute an Event of Default, with respect to
the Drs. shall have occurred and be continuing;
(vi) an Event of Default (as defined in the ISDA Master
Agreement dated as of February 12, 1997 (the "Master Agreement")
between Xxxxxx Guaranty Trust Company of New York and the
Company), shall have occurred and be continuing under the Master
Agreement (if the Master Agreement shall have terminated, then
this provision shall continue to have effect as if such agreement
were still in force and effect);
(vii) (a) any change or decrease specified in any
comfort letter referred to in subsection 3(f) of this Agreement
dated after the Notification Date or (b) any change, or any
development involving a prospective change, in or affecting the
business or properties of the Company and its Significant
Subsidiaries shall have occurred since the Notification Date, the
effect of which, in any case specified in clause (a) or (b)
above, is, in the judgment of the Remarketing Dealer, so material
and adverse as to make it impractical or inadvisable to proceed
with the remarketing of the Drs. or the delivery of the Drs. to
investors after the remarketing;
(viii) the Treasury Rate used to determine the
Dollar Price on the Determination Date exceeds the Base Rate;
(ix) the Remarketing Dealer shall not have received by
the required time on the Determination Date any firm, committed
bids to purchase all of the Drs. in accordance with subsection
4(d) hereof; or
(x) if a prospectus is required under the Securities
Act to be delivered in connection with the remarketing of the
Drs., the Company shall fail to furnish to the Remarketing Dealer
on the Remarketing Date the officers' certificate, opinion and
comfort letter referred to in subsection 3(f) of this Agreement
and such other documents and opinions as counsel for the
Remarketing Dealer may reasonably require for the purpose of
enabling such counsel to pass upon the sale of Drs. in the
remarketing as herein contemplated and related proceedings, or in
order to evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of the
conditions, herein contained; and
(d) the Remarketing Dealer shall have received on the
Remarketing Date a certificate of any of the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, or the
Controller of the Company, satisfactory to the Remarketing
Dealer, dated as of the Remarketing Date, to the effect that (w)
the representations and warranties in this Agreement are true and
correct with the same force and effect as though expressly made
at and as of the Remarketing Date, (x) the Company has complied
with all agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to the Remarketing Date,
(y) since the date of the most recent financial statements filed
with the Commission, there has been no material adverse change,
and no development involving a prospective material adverse
change, in the condition (financial or other), earnings, business
or properties of the Company and its Significant Subsidiaries,
whether or not arising from transactions in the ordinary course
of business, and (z) none of the events specified in clauses (i),
(v) and (vi) in the preceding subsection (c) has occurred.
The effectiveness of the Remarketing Dealer's election on
the Notification Date to remarket the Drs. shall be subject to
the condition that the Remarketing Dealer shall have received a
certificate of any of the Chief Financial Officer, the Treasurer,
any Assistant Treasurer, or the Controller of the Company,
satisfactory to the Remarketing Dealer, dated as of the
Notification Date, to the effect that (i) the Company has, prior
to the Remarketing Dealer's election on the Notification Date to
remarket the Drs., provided the Remarketing Dealer with notice of
all events as required under subsection 3(a) of this Agreement,
(ii) the representations and warranties in this Agreement are
true and correct at and as of the Notification Date and (iii) the
Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior
to the Notification Date. Such certificate shall be delivered by
the Company to the Remarketing Dealer as soon as practicable
following notification by the Remarketing Dealer to the Company
on the Notification Date of its election to remarket the Drs. and
in any event prior to the Determination Date.
If any of the foregoing conditions are not satisfied, the
Remarketing Dealer may terminate its obligations under this
Agreement.
Section 9. Indemnification. (a) The Company agrees to
indemnify and hold harmless the Remarketing Dealer and each
person, if any, who controls the Remarketing Dealer within the
meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, the
reasonable legal fees and other expenses incurred in connection
with any suit, action or proceeding or any claim asserted):
(i) arising out of the failure to have an effective
registration statement under the Securities Act relating to the
Drs., if required, or the failure to satisfy the prospectus
delivery requirements of the Securities Act because the Company
failed to notify the Remarketing Dealer of such delivery
requirement or failed to provide the Remarketing Dealer with an
prospectus for delivery,
(ii) caused by any untrue statement or alleged untrue
statement of a material fact contained in any of the Remarketing
Materials or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or neces
sary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused
by any untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with informa
tion relating to the Remarketing Dealer furnished to the Company
in writing by the Remarketing Dealer expressly for use therein,
or
(iii) the acts or omissions of the Remarketing
Dealer in connection with the performance of its duties and
obligations under subsections 4(c) through 4(f) hereof, except to
the extent finally judicially determined to be due primarily to
its gross negligence or willful misconduct.
(b) The Remarketing Dealer agrees to indemnify and hold
harmless the Company, its directors and its officers and each
person who controls the Company within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act, to the
same extent as the foregoing indemnity from the Company to the
Remarketing Dealer in subsection 9(a)(ii) of this Agreement, but
only with reference to information relating to such Remarketing
Dealer furnished to the Company in writing by such Remarketing
Dealer expressly for use in any of the Remarketing Materials.
(c) Promptly after receipt by any person of notice of
the commencement of any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand in
respect of which indemnity may be sought pursuant to subsection
9(a) or (b) above (an "Indemnified Person"), such person will
promptly notify the person against whom such indemnity may be
sought (an "Indemnifying Person") of the commencement thereof;
but the failure so to notify the Indemnifying Person will not
relieve it from any liability which it may have to an Indemnified
Person otherwise than under this Section 9. In case any such
action is brought against any Indemnified Person, and it notifies
the Indemnifying Person of the commencement thereof, the
Indemnifying Person will be entitled to participate therein, and
to the extent that it may elect by written notice delivered to
the Indemnified Person promptly after receiving the aforesaid
notice from such Indemnified Person, to assume the defense
thereof, with counsel satisfactory to such Indemnified Person;
provided that if the defendants in any such action include both
the Indemnified Person and the Indemnifying Person and the
Indemnified Person shall have reasonably concluded that there may
be legal defenses available to it and/or other Indemnified
Persons which are different from or additional to those available
to the Indemnifying Person, the Indemnified Person shall have the
right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on
behalf of such Indemnified Person. Upon receipt of notice from
the Indemnifying Person to such Indemnified Person of its
election to so assume the defense of such action and approval by
the Indemnified Person of counsel, the Indemnifying Person will
not be liable to such Indemnified Person under this Section 9 for
any legal or other expenses subsequently incurred by such
Indemnified Person in connection with the defense thereof unless:
(i) the Indemnified Person shall have employed
separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the
Indemnifying Person shall not be liable for the expenses of
more than one separate counsel, approved by the Remarketing
Dealer in the case of subsection 9(a) hereof, representing
the indemnified parties under such subsection 9(a) who are
parties to such action),
(ii) the Indemnifying Person shall not have
employed counsel satisfactory to the Indemnified Person to
represent the Indemnified Person within a reasonable time
after notice of commencement of the action or
(iii) the Indemnifying Person has authorized
the employment of counsel for the Indemnified Person at the
expense of the Indemnifying Person; and except that, if
clause (i) or (iii) is applicable, such liability shall be
only in respect of the counsel referred to in such clause
(i) or (iii).
(a) The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment.
Notwithstanding the foregoing, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for fees and expenses of counsel as
contemplated by this Section 9, the Indemnifying Person agrees
that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance
with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter
of such proceeding.
(b) If the indemnification provided for in subsections
9(a) and 9(b) is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or
liabilities referred to, then each Indemnifying Person, in lieu
of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the
Remarketing Dealer, on the other hand, from the remarketing of
the Drs. or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company on
the one hand and the Remarketing Dealer on the other in
connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Remarketing
Dealer, on the other, shall be deemed to be in the same
respective proportions as the aggregate principal amount of the
Drs. bears to the amount, if any, by which the price at which the
Drs. are sold by the Remarketing Dealer in the remarketing
exceeds the price paid by the Remarketing Dealer for the Drs.
tendered on the Remarketing Date. The relative fault of the
Company on the one hand and the Remarketing Dealer on the other
shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or by the and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement
or omission.
(c) The Company and the Remarketing Dealer agree that
it would not be just and equitable if contribution pursuant to
this Section 9 were determined by pro rata allocation or by any
other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person
as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above,
any legal or other expenses incurred by such Indemnified Person
in connection with investigating or defending any such action or
claim.
(d) Notwithstanding the provisions of this Section 9,
in no event shall the Remarketing Dealer be required to
contribute any amount in excess of the amount by which the total
price at which the Drs. underwritten by it and distributed to the
public were offered to the public exceeds the amount of any
damages that such Remarketing Dealer has otherwise been required
to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 9 are not exclusive and
shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law of in equity.
(e) The indemnity and contribution agreements
contained in this Section 9 and the representations and
warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect regardless of (i)
any termination of this Agreement and (ii) any investigation made
by or on behalf of the Remarketing Dealer or any person
controlling the Remarketing Dealer or by or on behalf of the
Company, its officers or directors or any other person
controlling the Company.
Section 10. Termination of . This
Agreement shall terminate as to the Remarketing Dealer on the
effective date of the resignation of the Remarketing Dealer
pursuant to Section 6 hereof or the repurchase of the Drs. by the
Company pursuant to subsection 4(g) hereof or the redemption of
the Drs. by the Company pursuant to subsection 4(h) hereof.
(g) In addition, the Remarketing Dealer may terminate all of
its obligations under this Agreement immediately by notifying the
Company and the Trustee of its election to do so, at any time on
or before the Remarketing Date, if:
(i) any of the conditions referred to or set
forth in subsection 8(a) or 8(b) hereof have not been met or
satisfied in full,
(ii) any of the events set forth in subsection
8(c) shall have occurred after the Remarketing Dealer elects
on the Notification Date to remarket the Drs.; or
(iii) the Remarketing Dealer determines, in
its sole discretion, after consultation with the Company,
that there is material, non-public information about the
Company that is not available to the Remarketing Dealer
which is necessary for it to fulfill its obligations under
this Agreement.
(a) If this Agreement is terminated pursuant to this Section
10, such termination shall be without liability of any party to
any other party, except that, in the case of termination pursuant
to subsection 8(a) or clause (i), (ii), (iii)(a), (v), (vi),
(vii) or (x) of subsection 8(c) hereof, the Company shall
reimburse the Remarketing Dealer for all of its reasonable
out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Remarketing Dealer. Section 9
and subsections 10(c) and 10(d) shall survive such termination
and remain in full force and effect.
(b) Upon:
(i) the termination of this Agreement pursuant to
subsection 10(b) (except as a result of an event described
in subsection 8(c)(viii)),
(ii) the occurrence, prior to the Remarketing
Dealer's election on the Notification Date to remarket the
Drs., of any event set forth in subsection 8(c)(ii), (v) or
(vi), or
(iii) a repurchase by the Company of any Drs.
due to a failure by the holder thereof to deliver the Drs.
to the Remarketing Dealer against payment therefor in
connection with a mandatory tender,
then, upon the request of the Remarketing Dealer, the Company
shall pay the Remarketing Dealer, in same-day funds by wire
transfer to an account designated by the Remarketing Dealer, the
fair market value of the embedded interest rate option implicit
in the Remarketing Dealer's right to purchase and remarket
pursuant to this Agreement the Drs. not purchased by the
Remarketing Dealer (the "Call Price"). The Call Price shall be
paid as soon as practicable after the Remarketing Dealer has
determined the Call Price and notified the Company of the Call
Price, but in any case no later than the Remarketing Date. The
Call Price in respect of any Drs. not purchased (the "Unpurchased
Drs.") by the Remarketing Dealer shall equal:
(i) if the Remarketing Dealer's request for a Call Price
payment is made on or after the Determination Date, an
amount (if positive) equal to (A) the Dollar Price
multiplied by a fraction the numerator of which is the
principal amount of the Unpurchased Drs. and the denominator
of which is the aggregate principal amount of the Drs.
originally issued less (B) the principal amount of the
Unpurchased Drs.; and
(ii) if the Remarketing Dealer's request for a Call Price
payment is made prior to the Determination Date, the
Commercially Reasonable Option Value (as defined below) on
the date of such request.
"Commercially Reasonable Option Value" means, on any date, the
amount determined by the Remarketing Dealer on such date under
Section 6(e) of the Master Agreement on a "Market Quotation"
basis in respect of the embedded interest rate option implicit in
the Remarketing Dealer's option to purchase, at 100% of the
aggregate principal value thereof, the Unpurchased Drs. as if a
"Termination Event" had occurred on such date under such interest
rate option with respect to the Company under the Master
Agreement and the Company was the "Affected Party". The
determination of the Commercially Reasonable Option Value shall
be made using the provisions of the Master Agreement regardless
of any termination of the Master Agreement.
The Remarketing Dealer shall promptly notify the Company of the
Call Price by telephone, confirmed in writing (which may include
facsimile or other electronic transmission). The Call Price,
absent manifest error, shall be binding and conclusive upon the
parties hereto.
(a) This Agreement shall not be subject to termination by the
Company.
Section 11. Remarketing Dealer's Performance; Duty of Care.
The duties and obligations of the Remarketing Dealer shall be
determined solely by the express provisions of this Agreement and
the Indenture. No implied covenants or obligations of or against
the Remarketing Dealer shall be read into this Agreement or the
Indenture. In the absence of bad faith on the part of the
Remarketing Dealer, the Remarketing Dealer may conclusively rely
upon any document furnished to it, which purports to conform to
the requirements of this Agreement and the Indenture, as to the
truth of the statements expressed in any of such documents. The
Remarketing Dealer shall be protected in acting upon any document
or communication reasonably believed by it to have been signed,
presented or made by the proper party or parties. The Remarketing
Dealer shall incur no liability to the Company or to any
beneficial owner or holder of Drs. in its individual capacity or
as Remarketing Dealer for any action or failure to act in
connection with the remarketing or otherwise, except as a result
of gross negligence or willful misconduct on its part.
Section 12. Governing Law. This agreement shall be governed
by and construed in accordance with the laws of the State of New
York, without giving effect to the conflicts of laws provisions
thereof.
Section 13. Term of Agreement. Unless otherwise terminated
in accordance with the provisions hereof, this Agreement shall
remain in full force and effect from the date hereof until the
earlier of the first day thereafter on which no Drs. are
outstanding or the completion of the remarketing of the Drs.
Regardless of any termination of this Agreement pursuant to
any of the provisions hereof, the obligations of the Company
pursuant to Section 8 hereof shall remain operative and in full
force and effect until fully satisfied.
Section 14. Successors and Assigns. The rights and
obligations of the Company hereunder may not be assigned or
delegated to any other person without the prior written consent
of the Remarketing Dealer. The rights and obligations of the
Remarketing Dealer hereunder may not be assigned or delegated to
any other person (other than an affiliate of the Remarketing
Dealer) without the prior written consent of the Company. This
Agreement shall inure to the benefit of and be binding upon the
Company and the Remarketing Dealer and their respective
successors and assigns, and will not confer any benefit upon any
other person, partnership, association or corporation other than
persons, if any, controlling the Remarketing Dealer within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act or any other indemnified party to the extent
provided in Section 9 hereof. The terms "successors" and
"assigns" shall not include any purchaser of any Drs. merely
because of such purchase.
Section 15. Headings. Section headings have been inserted in
this Agreement as a matter of convenience of reference only, and
it is agreed that such section headings are not a part of this
Agreement and will not be used in the interpretation of any
provisions of this Agreement.
Section 16. Severability. If any provision of this Agreement
shall be held or deemed to be or shall, in fact, be invalid,
inoperative or unenforceable as applied in any particular case in
any or all jurisdictions because it conflicts with any provision
of any constitution, statute, rule or public policy or for any
other reason, such circumstances shall not have the effect of
rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstance or jurisdiction, or
of rendering any other provision or provisions of this Agreement
invalid, inoperative or unenforceable to any extent whatsoever.
Section 17. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be regarded as an
original and all of which shall constitute one and the same
document.
Section 18. Amendments; Waivers. This Agreement may be
amended or portions thereof may be waived by any instrument in
writing signed by each of the parties hereto so long as this
Agreement as amended or the provisions as so waived are not
inconsistent with the Indenture in effect as of the date of any
such amendment or waiver.
Section 19. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made
hereunder or pursuant hereto shall be made in writing (which may
include facsimile or other electronic transmission) and shall be
deemed to have been validly given or made when delivered or, if
earlier, three days after it was mailed, registered or certified
mail, return receipt requested and postage prepaid, addressed as
follows:
(a) to the Company:
AlliedSignal Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX
Attention: Treasurer
Facsimile No.: 000-000-0000
(b) to JPMSI:
X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Syndicate Department
Facsimile No.: (000) 000-0000
or to such other address as the Company or the Remarketing Dealer
shall specify in writing.
IN WITNESS WHEREOF, each of the Company and the Remarketing
Dealer has caused this to be executed in
its name and on its behalf by one of its duly authorized officers
as of the date first above written.
ALLIEDSIGNAL INC.
By /s/ Xxxx X. Xxxxxx, Xx.
Name: Xxxx X. Xxxxxx, Xx.
Title: Assistant Treasurer
X.X. XXXXXX SECURITIES INC.
By /s/ Xxxxx Xxxxx
Name:Xxxxx Xxxxx
Title:Vice President
