Document:

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                                                                     EXHIBIT 4.3

                         NORTHROP GRUMMAN CORPORATION

                                      AND

                             JPMORGAN CHASE BANK,

                          AS PURCHASE CONTRACT AGENT

                          PURCHASE CONTRACT AGREEMENT

                         Dated as of November 21, 2001
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                               TABLE OF CONTENTS
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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

                                      -10-
<PAGE>

     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.

                                      -11-
<PAGE>

                  "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

                                      -12-
<PAGE>

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.

                                      -13-
<PAGE>

                  "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.

                                      -14-
<PAGE>

                  "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.

                                      -15-
<PAGE>

     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.

                                      -16-
<PAGE>

              (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

                                      -17-
<PAGE>

     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

                                      -18-
<PAGE>

     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.

                                      -19-
<PAGE>

     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.

                                      -20-
<PAGE>

     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

                                      -21-
<PAGE>

     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

                                      -22-
<PAGE>

     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

                                      -23-
<PAGE>

     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

                                      -24-
<PAGE>

     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

                                      -25-
<PAGE>

     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

                                      -26-
<PAGE>

     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;

                                      -27-
<PAGE>

               (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

                                      -28-
<PAGE>

     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.

                                      -29-
<PAGE>

                    (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

                                      -30-
<PAGE>

         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

                                      -31-
<PAGE>

         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

                                      -32-
<PAGE>

         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-
<PAGE>

         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

                                      -34-
<PAGE>

         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

                                      -35-
<PAGE>

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

                                      -36-
<PAGE>

         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-
<PAGE>

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.

                                      -38-
<PAGE>

                                  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

                                      -39-
<PAGE>

     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

                                      -40-
<PAGE>

     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

                                      -41-
<PAGE>

     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.

                                      -42-
<PAGE>

               (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;

                                      -43-
<PAGE>

                     (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

                                      -44-
<PAGE>

          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

                                      -45-
<PAGE>

          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

                                      -46-
<PAGE>

          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

                                      -47-
<PAGE>

          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.

                                      -48-
<PAGE>

                    (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

                                      -49-
<PAGE>

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

                                      -50-
<PAGE>

               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

                                      -51-
<PAGE>

          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

                                      -52-
<PAGE>

          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

                                      -53-
<PAGE>

          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

                                      -54-
<PAGE>

          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

                                      -55-
<PAGE>

          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

                                      -56-
<PAGE>

          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.

                                      -57-
<PAGE>

               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,

                                      -58-
<PAGE>

     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

                                      -59-
<PAGE>

     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,

                                      -60-
<PAGE>

     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);

                                      -61-
<PAGE>

                       (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

                                      -62-
<PAGE>

     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

                                      -63-
<PAGE>

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.

                                      -64-
<PAGE>

     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

                                      -65-
<PAGE>

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;

                                      -66-
<PAGE>

               (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

                                      -67-
<PAGE>

     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

                                      -68-
<PAGE>

     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:

                                      -69-
<PAGE>

               (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

                                      -70-
<PAGE>

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

                                      -71-
<PAGE>

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.

                                      -72-
<PAGE>

     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

                                      -73-
<PAGE>

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).

                                      -74-
<PAGE>

               (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

                                      -75-
<PAGE>

     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

                                      -76-
<PAGE>

  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.

                                      -77-
<PAGE>

                                  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

                                      -78-
<PAGE>

         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

                                      -79-
<PAGE>

         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

                                      -80-
<PAGE>

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]

                                      -81-
<PAGE>

          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-
<PAGE>

                                   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
<PAGE>

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
<PAGE>

               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
<PAGE>

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
<PAGE>

                 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-
<PAGE>

               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-
<PAGE>

               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-
<PAGE>

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-
<PAGE>

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-
<PAGE>

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-
<PAGE>

               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-
<PAGE>

                                 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-
<PAGE>

                                  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-
<PAGE>

                            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-
<PAGE>

                           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-
<PAGE>

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-
<PAGE>

                    (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-
<PAGE>

                                   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
<PAGE>

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
<PAGE>

          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
<PAGE>

                     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
<PAGE>

          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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

                                 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
<PAGE>

                                  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
<PAGE>

                            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
<PAGE>

                           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
<PAGE>

          Transfer instructions for Pledged Treasury Securities transferable
upon Early Settlement [or a Termination Event]:

                                      B-2
<PAGE>

                    (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:

<TABLE>
<CAPTION>
<S>            <C>                   <C>                   <C>                     <C>
                                                             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
</TABLE>

                                      B-1
<PAGE>

                                   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
<PAGE>

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
<PAGE>

                                   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
<PAGE>

                                   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<PAGE>

                                                                     EXHIBIT 4.4

                         NORTHROP GRUMMAN CORPORATION

                             THE BANK OF NEW YORK

                     as Collateral Agent, Custodial Agent

                          and Securities Intermediary

                                      AND

                              JPMORGAN CHASE BANK

                          as Purchase Contract Agent

                               PLEDGE AGREEMENT

                         Dated as of November 21, 2001
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>                                                                                                             <C>
ARTICLE I DEFINITIONS.........................................................................................   2

 SECTION 1.1   Definitions....................................................................................   2

ARTICLE II PLEDGE; CONTROL AND PERFECTION.....................................................................   4

 SECTION 2.1   The Pledge.....................................................................................   4
 SECTION 2.2   Control and Perfection.........................................................................   6

ARTICLE III PAYMENTS ON PLEDGED COLLATERAL....................................................................   8

 SECTION 3.1   Payments.......................................................................................   8
 SECTION 3.2   Application of Payments........................................................................   9

ARTICLE IV SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES............................................  10

 SECTION 4.1   Collateral Substitution and the Creation of Stripped Units.....................................  10
 SECTION 4.2   Collateral Substitution and the Re-Creation of Normal Units....................................  11
 SECTION 4.3   Termination Event..............................................................................  11
 SECTION 4.4   Early Settlement; Merger Early Settlement; Cash Settlement.....................................  12
 SECTION 4.5   Remarketing; Application of Proceeds; Settlement...............................................  13

ARTICLE V VOTING RIGHTS -- NOTES..............................................................................  16

 SECTION 5.1   Exercise by Purchase Contract Agent............................................................  16

ARTICLE VI RIGHTS AND REMEDIES; TAX EVENT REDEMPTION..........................................................  16

 SECTION 6.1   Rights and Remedies of the Collateral Agent....................................................  16
 SECTION 6.2   Substitutions..................................................................................  18
 SECTION 6.3   Tax Event Redemption...........................................................................  18

ARTICLE VII REPRESENTATIONS AND WARRANTIES; COVENANTS.........................................................  18

 SECTION 7.1   Representations and Warranties.................................................................  18
 SECTION 7.2   Covenants......................................................................................  19

ARTICLE VIII THE COLLATERAL AGENT.............................................................................  20

 SECTION 8.1   Appointment, Powers and Immunities.............................................................  20
 SECTION 8.2   Instructions of the Company....................................................................  21
 SECTION 8.3   Reliance.......................................................................................  22
 SECTION 8.4   Rights in Other Capacities.....................................................................  22
 SECTION 8.5   Non-Reliance on Collateral Agent...............................................................  22
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                             <C>
 SECTION 8.6   Compensation and Indemnity.....................................................................  23
 SECTION 8.7   Failure to Act.................................................................................  23
 SECTION 8.8   Resignation....................................................................................  24
 SECTION 8.9   Right to Appoint Agent or Advisor..............................................................  25
 SECTION 8.10  Survival.......................................................................................  26
 SECTION 8.11  Exculpation....................................................................................  26

ARTICLE IX AMENDMENT..........................................................................................  26

 SECTION 9.1   Amendment Without Consent of Holders...........................................................  26
 SECTION 9.2   Amendment with Consent of Holders..............................................................  27
 SECTION 9.3   Execution of Amendments........................................................................  27
 SECTION 9.4   Effect of Amendments...........................................................................  28
 SECTION 9.5   Reference to Amendments........................................................................  28

ARTICLE X MISCELLANEOUS.......................................................................................  28

 SECTION 10.1  No Waiver......................................................................................  28
 SECTION 10.2  GOVERNING LAW..................................................................................  29
 SECTION 10.3  Notices........................................................................................  29
 SECTION 10.4  Successors and Assigns.........................................................................  29
 SECTION 10.5  Counterparts...................................................................................  30
 SECTION 10.6  Severability...................................................................................  30
 SECTION 10.7  Expenses, Etc..................................................................................  30
 SECTION 10.8  Security Interest Absolute...................................................................... 31
 SECTION 10.9  Waiver of Jury Trial...........................................................................  31
</TABLE>

EXHIBIT A  Instruction from Purchase Contract Agent to Collateral Agent

EXHIBIT B  Instruction to Purchase Contract Agent

EXHIBIT C  Instruction to Custodial Agent Regarding Remarketing

EXHIBIT D  Instruction to Custodial Agent Regarding Withdrawal from Remarketing

                                     -ii-
<PAGE>

                                PLEDGE AGREEMENT

     PLEDGE AGREEMENT, dated as of November 21, 2001 (this "Agreement"), among
Northrop Grumman Corporation, a Delaware corporation (the "Company"), The Bank
of New York, a New York banking corporation, not individually but solely as
collateral agent (in such capacity, together with its successors in such
capacity, the "Collateral Agent"), as custodial agent (in such capacity,
together with its successors in such capacity, the "Custodial Agent") and as
"securities intermediary" as defined in Section 8-102(a)(14) of the Code (as
defined herein) (in such capacity, together with its successors in such
capacity, the "Securities Intermediary"), and JPMorgan Chase Bank, a New York
banking corporation, not individually but solely as purchase contract agent and
as attorney-in-fact of the Holders from time to time of the Units (in such
capacity, together with its successors in such capacity, the "Purchase Contract
Agent") under the Purchase Contract Agreement (as defined herein).

                                    RECITALS

     WHEREAS, the Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued Units having a Stated Amount
of $100 per Unit, all of which will initially be Normal Units.

     WHEREAS, each Normal Unit will be comprised of (a) a Purchase Contract and
(b) either beneficial ownership of (i) a Note, (ii) following the successful
remarketing of the Notes in accordance with the Purchase Contract Agreement and
the Remarketing Agreement, the appropriate Treasury Consideration or (iii)
following a Tax Event Redemption in accordance with the Purchase Contract
Agreement, any Applicable Ownership Interest in the Treasury Portfolio.

     WHEREAS, in accordance with the terms of the Purchase Contract Agreement, a
holder of Normal Units may separate the Notes or the appropriate Treasury
Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, from the related Purchase Contracts by substituting for such Notes
or the appropriate Treasury Consideration or Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, Treasury Securities that will pay in
the aggregate an amount equal to the aggregate principal amount of such Normal
Units.  Upon such separation, the Normal Units will become Stripped Units.  Each
Stripped Unit will be comprised of (a) a Purchase Contract and (b) a 1/10
undivided beneficial interest in a Treasury Security.

     WHEREAS, pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Units have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among

                                      -1-
<PAGE>

other things, to execute and deliver this Agreement on behalf of such Holders
and to grant the pledge provided hereby of the Notes, any Treasury
Consideration, any Treasury Securities and any Applicable Ownership Interest in
the Treasury Portfolio delivered in exchange therefor to secure each Holder's
obligations under the related Purchase Contract, as provided herein and subject
to the terms hereof.

     NOW, THEREFORE, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Company, the Collateral
Agent, the Securities Intermediary, the Custodial Agent and the Purchase
Contract Agent, on its own behalf and as attorney-in-fact of the Holders from
time to time of the Units, agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

     SECTION 1.1  Definitions.
                  -----------

     For all purposes of this agreement, except as otherwise expressly provided
or unless the context otherwise requires:

     (a)  capitalized terms used but not defined herein are used as defined in
the Purchase Contract Agreement;

     (b)  the defined terms in this Agreement have the meanings assigned to them
in this Article and include the plural as well as the singular; and

     (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.

     "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.

     "Code" has the meaning specified in Section 6.1 hereof.

     "Collateral" has the meaning specified in Section 2.1 hereof.

     "Collateral Account" means the securities account (number 423831)
maintained at The Bank of New York in the name "JPMorgan Chase Bank, a New York
banking corporation, as Purchase Contract Agent on behalf of the holders of
certain securities of Northrop Grumman Corporation, Collateral Account subject
to the security interest

                                      -2-
<PAGE>

of The Bank of New York, as Collateral Agent, for the benefit of Northrop
Grumman Corporation, as pledgee" and any successor account.

     "Collateral Agent" has the meaning specified in the first paragraph of this
Agreement.

     "Company" means the Person named as the "Company" in the first paragraph of
this Agreement until a successor shall have become such pursuant to the
applicable provisions of the Purchase Contract Agreement, and thereafter
"Company" shall mean such successor.

     "Custodial Agent" has the meaning specified in the first paragraph of this
Agreement.

     "Intermediary" means any entity that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.

     "Pledge" has the meaning specified in Section 2.1 hereof.

     "Pledged Applicable Ownership Interest in the Treasury Portfolio" has the
meaning specified in Section 2.1 hereof.

     "Pledged Notes" has the meaning specified in Section 2.1 hereof.

     "Pledged Treasury Consideration" has the meaning specified in Section 2.1
hereof.

     "Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.

     "Proceeds" means all interest, dividends, cash, instruments, securities,
financial assets (as defined in Section 8-102(a)(9) of the Code) and other
property from time to time received, receivable or otherwise distributed upon
the sale, exchange, collection or disposition of the Collateral or any proceeds
thereof.

     "Purchase Contract Agent" has the meaning specified in the first paragraph
of this Agreement.

     "Purchase Contract Agreement" has the meaning specified in the Recitals.

     "Securities Intermediary" has the meaning specified in the first paragraph
of this Agreement.

     "Security Entitlement" has the meaning set forth in Section 8-102(a) (17)
of the Code.

     "Separate Notes" means any Notes that are not Pledged Notes.

                                      -3-
<PAGE>

     "Tax Event Redemption Date" means the date upon which a Tax Event
Redemption is to occur.

     "TRADES Regulations" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time.
Unless otherwise defined herein, all terms defined in the TRADES Regulations are
used herein as therein defined.

     "Transfer" means, with respect to the Collateral and in accordance with the
instructions of the Collateral Agent, the Purchase Contract Agent or the Holder,
as applicable:

          (i)  in the case of Collateral consisting of securities which cannot
     be delivered by book-entry or which the parties agree are to be delivered
     in physical form, delivery in appropriate physical form to the recipient
     accompanied by any duly executed instruments of transfer, assignments in
     blank, transfer tax stamps and any other documents necessary to constitute
     a legally valid transfer to the recipient;

          (ii) in the case of Collateral consisting of securities maintained in
     book-entry form by causing a "securities intermediary" (as defined in
     Section 8-102(a)(14) of the Code) to (a) credit a "security entitlement"
     (as defined in Section 8-102(a)(17) of the Code) with respect to such
     securities to a "securities account" (as defined in Section 8-501(a) of the
     Code) maintained by or on behalf of the recipient and (b) to issue a
     confirmation to the recipient with respect to such credit. In the case of
     Collateral to be delivered to the Collateral Agent, the securities
     intermediary shall be the Securities Intermediary and the securities
     account shall be the Collateral Account. In addition, any Transfer of
     Treasury Securities and Treasury Consideration hereunder shall be made in
     accordance with the TRADES Regulations and other applicable law.

                                  ARTICLE II

                         PLEDGE; CONTROL AND PERFECTION

     SECTION 2.1  The Pledge.
                  ----------

     (a)  The Holders from time to time acting through the Purchase Contract
Agent, as their attorney-in-fact, and the Purchase Contract Agent, as such
attorney-in-fact, hereby pledge and grant to the Collateral Agent, for the
benefit of the Company, as collateral security for the performance when due by
such Holders of their respective obligations under the related Purchase
Contracts, a security interest in all of the right, title and interest of the
Purchase Contract Agent and such Holders in:

                                      -4-
<PAGE>

          (i)    (A) the Notes, Treasury Consideration, Treasury Securities
     and any Applicable Ownership Interest in the Treasury Portfolio
     constituting a part of the Units, (B) any Treasury Securities delivered in
     exchange for any Notes, Treasury Consideration or any Applicable Ownership
     Interest in the Treasury Portfolio, as applicable, in accordance with
     Section 4.1 hereof, and (C) any Notes, Treasury Consideration or any
     Applicable Ownership Interest in the Treasury Portfolio, as applicable,
     delivered in exchange for any Treasury Securities in accordance with
     Section 4.2 hereof, in each case that have been Transferred to or otherwise
     received by the Collateral Agent and not released by the Collateral Agent
     to such Holders under the provisions of this Agreement;

          (ii)   the Collateral Account and all securities, financial assets,
     security entitlements, cash and other property credited thereto and all
     Security Entitlements related thereto; and

          (iii)  all Proceeds of the foregoing (all of the foregoing,
     collectively, the "Collateral").

     (b)  Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Units, shall cause the Notes comprising a part of the Normal Units to be
Transferred to the Collateral Agent for the benefit of the Company.

     (c)  The pledge provided in this Section 2.1 is herein referred to as the
"Pledge" and the Notes (or the Notes that are delivered pursuant to Section 6.2
hereof), Treasury Consideration, Treasury Securities or Applicable Ownership
Interest in the Treasury Portfolio subject to the Pledge, excluding any Notes,
Treasury Consideration, Treasury Securities or Applicable Ownership Interest in
the Treasury Portfolio released from the Pledge as provided in Sections 4.1 and
4.2 hereof, respectively, are hereinafter referred to as "Pledged Notes,"
"Pledged Treasury Consideration," "Pledged Treasury Securities" or "Pledged
Applicable Ownership Interest in the Treasury Portfolio," respectively. Subject
to the Pledge and the provisions of Section 2.2 hereof, the Holders from time to
time shall have full beneficial ownership of the Collateral. For purposes of
perfecting the Pledge under applicable law, including, to the extent applicable,
the TRADES Regulations or the Uniform Commercial Code as adopted and in effect
in any applicable jurisdiction, the Collateral Agent shall be the agent of the
Company as provided herein. Whenever directed by the Collateral Agent acting on
behalf of the Company, the Securities Intermediary shall have the right to re-
register in its name the Notes or any other securities held in physical form.

     (d)  Except as may be required in order to release Notes or Treasury
Consideration, as applicable, in connection with a Tax Event Redemption or with
a Holder's election to convert its investment from a Normal Unit to a Stripped
Unit, or

                                      -5-
<PAGE>

except as otherwise required to release Notes as specified herein, neither the
Collateral Agent, the Custodial Agent nor the Securities Intermediary shall
relinquish physical possession of any certificate evidencing a Note prior to the
termination of this Agreement. If it becomes necessary for the Securities
Intermediary to relinquish physical possession of a certificate in order to
release a portion of the Notes evidenced thereby from the Pledge, the Company or
the Purchase Contract Agent shall use its best efforts to obtain physical
possession of a replacement certificate evidencing any Notes remaining subject
to the Pledge hereunder registered to the Securities Intermediary or endorsed in
blank within fifteen days of the date the Securities Intermediary relinquished
possession. The Securities Intermediary shall promptly notify the Company and
the Collateral Agent of the Securities Intermediary's failure to obtain
possession of any such replacement certificate as required hereby.

     SECTION 2.2  Control and Perfection.
                  ----------------------

     (a)  In connection with the Pledge granted in Section 2.1, and subject to
the other provisions of this Agreement, the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, hereby authorize
and direct the Securities Intermediary (without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent may deliver with respect to the Collateral Account, the
Collateral credited thereto and any Security Entitlements with respect to any
thereof. In the event the Securities Intermediary receives from the Holders or
the Purchase Contract Agent entitlement orders which conflict with entitlement
orders received from the Collateral Agent, the Securities Intermediary shall
follow the entitlement orders received from the Collateral Agent. Such
instructions and entitlement orders may, without limitation, direct the
Securities Intermediary to transfer, redeem, assign, or otherwise deliver the
Notes, the Treasury Consideration, the Treasury Securities, any Applicable
Ownership Interest in the Treasury Portfolio and any Security Entitlements with
respect thereto or sell, liquidate or dispose of such assets through a broker
designated by the Company, and to pay and deliver any income, proceeds or other
funds derived therefrom to the Company. The Holders from time to time acting
through the Purchase Contract Agent hereby further authorize and direct the
Collateral Agent, as agent of the Company, to itself issue instructions and
entitlement orders, and to otherwise take action, with respect to the Collateral
Account, the Collateral credited thereto and any Security Entitlements with
respect thereto, pursuant to the terms and provisions hereof, all without the
necessity of obtaining the further consent of the Purchase Contract Agent or any
of the Holders. The Collateral Agent shall be the agent of the Company and shall
act only in accordance with the terms hereof or as otherwise directed in writing
by the Company. Without limiting the generality of the foregoing, the Collateral
Agent shall issue

                                      -6-
<PAGE>

entitlement orders to the Securities Intermediary as directed in writing by the
Company.

     (b)  The Securities Intermediary hereby confirms and agrees that:

          (i)   all securities or other property underlying any financial assets
     credited to the Collateral Account shall be registered in the name of the
     Securities Intermediary, or its nominee, indorsed to the Securities
     Intermediary, or its nominee, or in blank or credited to another Collateral
     Account maintained in the name of the Securities Intermediary and in no
     case will any financial asset credited to the Collateral Account be
     registered in the name of the Purchase Contract Agent, the Collateral
     Agent, the Company or any Holder, payable to the order of, or specially
     indorsed to, the Purchase Contract Agent, the Collateral Agent, the Company
     or any Holder except to the extent the foregoing have been specially
     indorsed to the Securities Intermediary or in blank;

          (ii)  all property delivered to the Securities Intermediary pursuant
     to this Pledge Agreement (including, without limitation, any Notes,
     Treasury Consideration, Treasury Securities or any Applicable Ownership
     Interest in the Treasury Portfolio) will be promptly credited to the
     Collateral Account;

          (iii) the Collateral Account is an account to which financial assets
     are or may be credited, and the Securities Intermediary shall, subject to
     the terms of this Agreement, treat the Purchase Contract Agent as entitled
     to exercise the rights of any financial asset credited to the Collateral
     Account;

          (iv)  the Securities Intermediary has not entered into, and until the
     termination of this Agreement will not enter into, any agreement with any
     other Person relating to the Collateral Account and/or any financial assets
     credited thereto pursuant to which it has agreed to comply with entitlement
     orders (as defined in Section 8-102(a)(8) of the Code) of such other
     Person; and

          (v)   the Securities Intermediary has not entered into, and until the
     termination of this Agreement will not enter into, any agreement with the
     Company, the Collateral Agent or the Purchase Contract Agent purporting to
     limit or condition the obligation of the Securities Intermediary to comply
     with entitlement orders as set forth in this Section 2.2 hereof.

          (vi)  The Securities Intermediary hereby agrees that each item of
     property (whether investment property, financial asset, security,
     instrument or cash) credited to the Collateral Account shall be treated as
     a "financial asset" within the meaning of Section 8-102(a)(9) of the Code.

                                      -7-
<PAGE>

          (vii)  In the event of any conflict between this Agreement (or any
     portion thereof) and any other agreement now existing or hereafter entered
     into, the terms of this Agreement shall prevail.

     (c)  The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of substitution,
as the Purchase Contract Agent's attorney-in-fact to take on behalf of, and in
the name, place and stead of, the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such power-
of-attorney shall not be deemed to require of the Collateral Agent any specific
duties or obligations not otherwise assumed by the Collateral Agent hereunder.
Notwithstanding the foregoing, in no event shall the Collateral Agent or
Securities Intermediary be responsible for the preparation or filing of any
financing or continuation statements in the appropriate jurisdictions or
responsible for maintenance or perfection of any security interest hereunder.

                                  ARTICLE III

                         PAYMENTS ON PLEDGED COLLATERAL

     SECTION 3.1  Payments.
                  --------

     So long as the Purchase Contract Agent is the registered owner of the
Pledged Notes, Pledged Treasury Consideration, Pledged Applicable Ownership
Interest in the Treasury Portfolio or Pledged Treasury Securities, it shall
receive all payments thereon.  If the Pledged Notes are reregistered, such that
the Collateral Agent becomes the registered holder, all payments of the
principal of, or interest on, the Pledged Notes and all payments of the
principal of, or cash distributions on, any Pledged Treasury Consideration,
Pledged Treasury Securities or any Pledged Applicable Ownership Interest in the
Treasury Portfolio, that are received by the Collateral Agent and that are
properly payable hereunder, 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 any
     Pledged Applicable Ownership Interest in the Treasury Portfolio, any
     interest payments with respect to the Pledged Notes or the appropriate
     Pledged Applicable Ownership Interest in the Treasury Portfolio (as
     specified in clause (B) of the definition of Applicable Ownership Interest)
     of the Treasury Portfolio, as the case may be, and (B) any payments of
     principal or, if applicable, the appropriate Applicable Ownership Interest
     (as specified in clause (A) of the definition of such term) of the Treasury
     Portfolio with respect to any Notes, Treasury Consideration or the
     appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
     case may be, that have been released from the Pledge

                                      -8-
<PAGE>

     pursuant to Section 4.3 hereof, to the Purchase Contract Agent, for the
     benefit of the relevant Holders of the Normal Units, to the account
     designated by the Purchase Contract Agent for such purpose, 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);

          (ii)   in the case of any payments with respect to any Treasury
     Securities that have been released from the Pledge pursuant to Section 4.3
     hereof, to the Holders of the Stripped Units to the accounts designated by
     them in writing for such purpose no later than 2:00 p.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 10 a.m., New York City
     time, on a Business Day, then such payment shall be made no later than
     10:30 a.m., New York City time, on the next succeeding Business Day); and

          (iii)  in the case of payments in respect of any Pledged Notes,
     Pledged Treasury Consideration, Pledged Treasury Securities or the
     appropriate Pledged Applicable Ownership Interest (as specified in clause
     (A) of the definition of such term) of 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 in accordance with the procedure set forth in Section 4.5(a)
     or 4.5(b) hereof, in full satisfaction of the respective obligations of the
     Holders under the related Purchase Contracts.

     SECTION 3.2  Application of Payments.
                  -----------------------

     All payments received by the Purchase Contract Agent as provided herein
shall be applied by the Purchase Contract Agent pursuant to the provisions of
the Purchase Contract Agreement.  If, notwithstanding the foregoing, the
Purchase Contract Agent shall receive any payments of principal on account of
any Note, Treasury Consideration or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as applicable, that, at the time of such payment, is a
Pledged Note, Treasury Consideration or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, or a Holder of a Stripped Unit shall
receive any payments of principal on account of any Treasury Securities that, at
the time of such payment, are Pledged Treasury Securities, the Purchase Contract
Agent or such Holder shall hold the same as trustee of an express trust for the
benefit of the Company (and promptly deliver the same over to the Company) for
application

                                      -9-
<PAGE>

to the obligations of the Holders under the related Purchase Contracts, and the
Holders shall acquire no right, title or interest in any such payments of
principal so received.

                                  ARTICLE IV

            SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES

     SECTION 4.1  Collateral Substitution and the Creation of Stripped Units.
                  ----------------------------------------------------------

     At any time on or prior to the second Business Day immediately preceding
the Stock Purchase Date, a Holder of Normal Units shall have the right to
substitute Treasury Securities for the Pledged Notes, Pledged Treasury
Consideration or Pledged Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, securing such Holder's obligations under the
Purchase Contracts comprising a part of such Normal Units, in integral multiples
of 10 Normal Units, or after a remarketing of the Notes pursuant to the Purchase
Contract Agreement, in integral multiples of Normal Units such that Treasury
Securities to be deposited and the applicable Treasury Consideration to be
released are in integral multiples of $1,000, by (a) Transferring to the
Collateral Agent Treasury Securities having an aggregate principal amount equal
to the aggregate Stated Amount of such Normal Units and (b) delivering such
Normal Units to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of Exhibit B hereto, to the Purchase Contract Agent
stating that such Holder has Transferred Treasury Securities to the Collateral
Agent pursuant to clause (a) above (stating the principal amount and the CUSIP
numbers of the Treasury Securities Transferred by such Holder) and requesting
that the Purchase Contract Agent instruct the Collateral Agent to release from
the Pledge the Pledged Notes, Pledged Treasury Consideration or Pledged
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
related to such Normal Units, whereupon the Purchase Contract Agent shall
promptly give such instruction in writing to the Collateral Agent in the form
provided in Exhibit A; provided that, such Holder may not substitute such
Treasury Securities for such Pledged Notes, Pledged Treasury Consideration or
Pledged Applicable Ownership Interest in the Treasury Portfolio pursuant to this
Section 4.1 during the period from four Business Days prior to any Remarketing
Period until the expiration of three Business Days after the end of such
Remarketing Period.  Upon receipt of Treasury Securities from a Holder of Normal
Units and the related written instruction from the Purchase Contract Agent, the
Collateral Agent shall release the Pledged Notes, Pledged Treasury Consideration
or the Pledged Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, and shall promptly Transfer such Pledged Notes, Pledged Treasury
Consideration or Pledged Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, free and clear of any lien, pledge or security
interest created hereby, to the Purchase Contract Agent.  All items Transferred
and/or substituted by any Holder pursuant to this

                                      -10-
<PAGE>

Section 4.1, Section 4.2 or any other Section of this Agreement shall be
Transferred and/or substituted free and clear of all liens, claims and
encumbrances.

     SECTION 4.2  Collateral Substitution and the Re-Creation of Normal Units.
                  -----------------------------------------------------------

     At any time on or prior to the second Business Day immediately preceding
the Stock Purchase Date, a Holder of Stripped Units shall have the right to
reestablish Normal Units (a) consisting of the Purchase Contracts and Notes in
integral multiples of 10 Normal Units, or (b) after a remarketing of the Notes
pursuant to the Purchase Contract Agreement or a Tax Event Redemption,
consisting of the Purchase Contracts and the appropriate Treasury Consideration
(identified and calculated by reference to the Treasury Consideration then
comprising Normal Units) or the appropriate portion of the Treasury Portfolio in
integral multiples of Stripped Units such that the Treasury Consideration or
Applicable Ownership Interest in the Treasury Portfolio to be deposited and the
Treasury Securities to be released are in integral multiples of $1,000, by (x)
Transferring to the Collateral Agent Notes or the appropriate Treasury
Consideration or the Applicable Ownership Interest (as defined in clause (A) of
the definition of such term) of the Treasury Portfolio, as the case may be, then
comprising such number of Normal Units as is equal to such Stripped Units and
(y) delivering such Stripped Units to the Purchase Contract Agent, accompanied
by a notice, substantially in the form of Exhibit B hereto, to the Purchase
Contract Agent stating that such Holder has transferred Notes, Treasury
Consideration or Applicable Ownership Interest in the Treasury Portfolio to the
Collateral Agent pursuant to clause (a) above and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release from the Pledge the
Pledged Treasury Securities related to such Stripped Units, whereupon the
Purchase Contract Agent shall give such instruction to the Collateral Agent in
the form provided in Exhibit A; provided that, such Holder of Stripped Units
shall not have the right to reestablish Normal Units pursuant to this Section
4.2 during the period from four Business Days prior to any Remarketing Period
until the expiration of three Business Days 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,
from such Holder and the instruction from the Purchase Contract Agent, the
Collateral Agent shall release the Pledged Treasury Securities and shall
promptly Transfer such Pledged Treasury Securities, free and clear of any lien,
pledge or security interest created hereby, to the Purchase Contract Agent.

     SECTION 4.3  Termination Event.
                  -----------------
     (a)  Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that there has occurred a Termination
Event, the Collateral Agent shall release all Collateral from the Pledge and
shall promptly Transfer any Pledged Notes, Pledged Treasury Consideration or
Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may
be, and Pledged

                                      -11-
<PAGE>

Treasury Securities to the Purchase Contract Agent for the benefit of the
Holders of the Normal Units and the Stripped Units, respectively, free and clear
of any lien, pledge or security interest or other interest created hereby.

     (b)  If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Notes, Pledged Treasury Consideration, Pledged Applicable Ownership Interest in
the Treasury Portfolio, or Pledged Treasury Securities, as the case may be, as
provided by this Section 4.3, the Purchase Contract Agent shall

          (i)  use its best efforts to obtain at the expense of the Company an
     opinion of a nationally recognized law firm reasonably acceptable to the
     Collateral Agent to the effect that, as a result of the Company's being the
     debtor in such a bankruptcy case, the Collateral Agent will not be
     prohibited from releasing or Transferring the Collateral as provided in
     this Section 4.3, and shall deliver such opinion to the Collateral Agent
     within ten days after the occurrence of such Termination Event, and if (y)
     the Purchase Contract Agent shall be unable to obtain such opinion within
     ten days after the occurrence of such Termination Event or (z) the
     Collateral Agent shall continue, after delivery of such opinion, to refuse
     to effectuate the release and Transfer of all Pledged Notes, Pledged
     Treasury Consideration, Pledged Applicable Ownership Interest in the
     Treasury Portfolio or Pledged Treasury Securities, as the case may be, as
     provided in this Section 4.3, then the Purchase Contract Agent shall within
     fifteen days after the occurrence of such Termination Event commence an
     action or proceeding in the court with jurisdiction of the Company's case
     under the Bankruptcy Code seeking an order requiring the Collateral Agent
     to effectuate the release and transfer of all Pledged Notes, Pledged
     Treasury Consideration, Pledged Applicable Ownership Interest in the
     Treasury Portfolio or Pledged Treasury Securities, as the case may be, as
     provided by this Section 4.3 or

          (ii) commence an action or proceeding like that described in
     subsection (i)(z) hereof within ten days after the occurrence of such
     Termination Event.

     SECTION 4.4  Early Settlement; Merger Early Settlement; Cash Settlement.
                  ----------------------------------------------------------

     Upon written notice to the Collateral Agent by the Purchase Contract Agent
that one or more Holders of Units have elected to effect Early Settlement,
Merger Early Settlement or Cash Settlement of their respective obligations under
the Purchase Contracts forming a part of such Units in accordance with the terms
of the Purchase Contracts and the Purchase Contract Agreement (setting forth the
number of such Purchase Contracts as to which such Holders have elected to
effect Early Settlement,

                                      -12-
<PAGE>

Merger Early Settlement or Cash Settlement), and that the Purchase Contract
Agent has received from such Holders, and paid to the Company, as confirmed to
the Collateral Agent in writing by the Company, the related Early Settlement
Amounts, Merger Early Settlement Amounts or Cash Settlement Amounts, as the case
may be, pursuant to the terms of the Purchase Contracts and the Purchase
Contract Agreement and that all conditions to such Early Settlement, Merger
Early Settlement or Cash Settlement, as the case may be, have been satisfied,
then the Collateral Agent shall release from the Pledge (a) Pledged Notes,
Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, in the case of a Holder of Normal Units
or (b) Pledged Treasury Securities, in the case of a Holder of Stripped Units,
relating to such Purchase Contracts as to which such Holders have elected to
effect Early Settlement, Merger Early Settlement or Cash Settlement, and shall
Transfer all such Pledged Notes, Pledged Treasury Consideration, Pledged
Applicable Ownership Interest in the Treasury Portfolio or Pledged Treasury
Securities, as the case may be, free and clear of the Pledge created hereby, to
the Purchase Contract Agent for the benefit of such Holders.

     SECTION 4.5  Remarketing; Application of Proceeds; Settlement.
                  ------------------------------------------------

     (a)  Pursuant to the Purchase Contract Agreement, the Purchase Contract
Agent shall notify, by 10:00 a.m., New York City time, on the third Business Day
preceding the Remarketing Date or any Subsequent Remarketing Date, as the case
may be, the Remarketing Agent and the Collateral Agent of the aggregate
principal amount of Notes comprising part of Normal Units to be remarketed. The
Collateral Agent shall, by 10:00 a.m., New York City time, on the Business Day
immediately preceding the first day of any Remarketing Period or any Subsequent
Remarketing Period, as the case may be, without any instruction from Holders of
Normal Units, deliver the Pledged Notes to be remarketed to the Remarketing
Agent for remarketing. After deducting as the remarketing fee an amount not
exceeding 25 basis points (.25%) of the total proceeds of such remarketing of
Pledged Notes, the Remarketing Agent will deliver the Agent-purchased Treasury
Consideration (as defined in the Purchase Contract Agreement) purchased from the
proceeds of the remarketing to the Purchase Contract Agent, which shall
thereupon deliver such Agent-purchased Treasury Consideration to the Collateral
Agent. Upon receipt of the Agent-purchased Treasury Consideration from the
Purchase Contract Agent following a successful remarketing, (i) the Collateral
Agent, for the benefit of the Company, shall thereupon hold in the Collateral
Account such Agent-Purchased Treasury Consideration to secure such Normal Units
Holders' obligations under the Purchase Contracts and to fund the quarterly
interest payment due to Normal Units Holders on the Stock Purchase Date, and
(ii) the remaining portion, if any, of the proceeds of such successful
remarketing shall be distributed by the Remarketing Agent to the Purchase
Contract Agent for payment to such Normal Units Holders participating in such
remarketing. On the Stock Purchase Date, the Collateral Agent shall, at the
direction of the Company,

                                      -13-
<PAGE>

(i) apply that portion of the payments received in respect of the Pledged
Treasury Consideration equal to the aggregate Stated Amount of the related
Normal Units to satisfy in full the obligations of such Normal Units Holders to
pay the Purchase Price under the related Purchase Contracts and (ii) apply the
remaining portion to pay the quarterly interest payment due to Normal Units
Holders on such Stock Purchase Date, which such quarterly interest payment shall
be paid on the Pledged Notes in an amount equal to the Coupon Rate for such
quarterly interest payment.

     (b)  Within three Business Days following the Last Failed Remarketing, the
Notes delivered to the Remarketing Agent pursuant to Section 4.5(a) hereof shall
be returned to the Collateral Agent, together with written notice from the
Remarketing Agent of the Last Failed Remarketing. The Collateral Agent, for the
benefit of the Company, shall thereupon hold such Notes to secure the Normal
Units Holders' obligations under the Purchase Contracts. The Remarketing Agent
shall make one or more attempts to remarket the Notes in accordance with the
procedures set forth in the Purchase Contract Agreement and the Remarketing
Agreement, provided that the requirements of Section 5.4(b)(ii) of the Purchase
Contract Agreement have been met. If by 4:00 p.m., New York City time, on the
Business Day immediately preceding the Stock Purchase Date, the Remarketing
Agent has failed to remarket the Notes at 100.5% of the Remarketing Value (as
described in the Purchase Contract Agreement), the Last Failed Remarketing shall
be deemed to have occurred. In this case, the Remarketing Agent shall advise the
Collateral Agent in writing that it cannot remarket the related Pledged Notes of
such Holders of Normal Units. 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 Collateral Agent, for the benefit of the Company will,
at the written direction of the Company, retain or dispose of the Pledged Notes
in accordance with applicable law and satisfy in full, from any such disposition
or retention, such Holders' obligations to pay the Purchase Price for the Common
Stock; provided, that if upon a Failed Remarketing, the Collateral Agent
exercises such rights for the benefit of the Company with respect to such Notes,
any accrued and unpaid interest on such Notes will become payable by the Company
to the Purchase Contract Agent for payment to the Holder of the Normal Units to
which such Notes relate in accordance with the Purchase Contract Agreement.

     (c)  In the event a Holder of Stripped Units has not made a Cash
Settlement, Early Settlement or Merger Early Settlement of the Purchase
Contracts underlying its Stripped Units, such Holder shall be deemed to have
elected to pay for the shares of Common Stock to be issued under such Purchase
Contracts from the payments received in respect of the related Pledged Treasury
Securities. Without receiving any instruction from any such Holder, the
Collateral Agent shall apply such payments to

                                      -14-
<PAGE>

the settlement of such Purchase Contracts on the Stock Purchase Date. In the
event the payments received in respect of the related Pledged Treasury
Securities are in excess of the aggregate Purchase Price of the Purchase
Contracts being settled thereby, the Collateral Agent shall distribute such
excess, when received, to the Purchase Contract Agent for the benefit of such
Holders of Stripped Units.

     (d)  On or prior to the fourth Business Day preceding the first day of any
Remarketing Period, but no earlier than the Payment Date immediately preceding
August 16, 2004, holders of Separate Notes may elect to have their Separate
Notes remarketed by delivering their Separate Notes, together with a notice of
such election, substantially in the form of Exhibit C hereto, to the Custodial
Agent. On the third Business Day prior to the first day of any Remarketing
Period, by 10:00 a.m., New York City time, the Custodial Agent shall notify the
Remarketing Agent of the number of such Separate Notes to be remarketed. The
Custodial Agent will hold such Separate Notes in an account separate from the
Collateral Account. A holder of Separate Notes electing to have its Separate
Notes remarketed will also have the right to withdraw such election by written
notice to the Custodial Agent, substantially in the form of Exhibit D hereto, on
or prior to the fifth Business Day immediately preceding the first day of any
Remarketing Period and any Subsequent Remarketing Period, upon which notice the
Custodial Agent will return such Separate Notes to such holder. On the third
Business Day immediately preceding the first day of any Remarketing Period and
any Subsequent Remarketing Period, the Custodial Agent at the written direction
of the Remarketing Agent will deliver to the Remarketing Agent for remarketing
all Separate Notes delivered to the Custodial Agent pursuant to this Section
4.5(d) and not withdrawn pursuant to the terms hereof prior to such date. The
portion of the proceeds from such remarketing equal to the amount calculated in
respect of such Separate Notes as set forth in Section 5.4(b) of the Purchase
Contract Agreement will automatically be remitted by the Remarketing Agent to
the Custodial Agent for the benefit of the holders of such Separate Notes. In
addition, after deducting as the remarketing fee an amount not exceeding 25
basis points (.25%) of the total proceeds of such remarketing of such Separate
Notes, the Remarketing Agent will remit to the Custodial Agent the remaining
portion of the proceeds, if any, for the benefit of such holders of such
Separate Notes. If, despite using its reasonable best efforts, the Remarketing
Agent advises the Custodial Agent in writing that there has been a Failed
Remarketing, the Remarketing Agent will promptly return such Separate Notes to
the Custodial Agent for redelivery to such holders of such Separate Notes.

                                      -15-
<PAGE>

                                   ARTICLE V

                             VOTING RIGHTS -- NOTES

     SECTION 5.1  Exercise by Purchase Contract Agent.
                  -----------------------------------

     The Purchase Contract Agent may exercise, or refrain from exercising, any
and all voting and other consensual rights pertaining to the Pledged Notes or
any part thereof for any purpose not inconsistent with the terms of this
Agreement and in accordance with the terms of the Purchase Contract Agreement;
provided, that the Purchase Contract Agent shall not exercise or, as the case
may be, shall not refrain from exercising such right if, in the judgment of the
Company, such action would impair or otherwise have a material adverse effect on
the value of all or any of the Pledged Notes; and provided, further, that the
Purchase Contract Agent shall give the Company and the Collateral Agent at least
five days' prior written notice of the manner in which it intends to exercise,
or its reasons for refraining from exercising, any such right.  Upon receipt of
any notices and other communications in respect of any Pledged Notes, including
notice of any meeting at which holders of Notes are entitled to vote or
solicitation of consents, waivers or proxies of holders of Notes, the Collateral
Agent shall use reasonable efforts to send promptly to the Purchase Contract
Agent such notice or communication, and as soon as reasonably practicable after
receipt of a written request therefor from the Purchase Contract Agent, execute
and deliver to the Purchase Contract Agent such proxies and other instruments in
respect of such Pledged Notes (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with respect to
the Pledged Notes.

                                  ARTICLE VI

                   RIGHTS AND REMEDIES; TAX EVENT REDEMPTION

     SECTION 6.1  Rights and Remedies of the Collateral Agent.
                  -------------------------------------------

     (a)  In addition to the rights and remedies available at law or in equity,
after an event of default under the Purchase Contracts, the Collateral Agent
shall have all of the rights and remedies with respect to the Collateral of a
secured party under the Uniform Commercial Code (or any successor thereto) as in
effect in the State of New York from time to time (the "Code") (whether or not
the Code is in effect in the jurisdiction where the rights and remedies are
asserted) and the TRADES Regulations and such additional rights and remedies to
which a secured party is entitled under the laws in effect in any jurisdiction
where any rights and remedies hereunder may be asserted. Wherever reference is
made in this Agreement to any section of the Code, such reference shall be
deemed to include a reference to any provision of the Code which is a successor
to, or amendment of, such section. Without limiting the generality of the
foregoing, such remedies may include, to the extent permitted by

                                      -16-
<PAGE>

applicable law, (i) retention of the Pledged Notes or other Collateral in full
satisfaction of the Holders' obligations under the Purchase Contracts or (ii)
sale of the Pledged Notes or other Collateral in one or more public or private
sales, in each case at the written direction of the Company.

     (b)  Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of any Pledged Treasury
Consideration, Pledged Applicable Ownership Interest of the Treasury Portfolio
or Pledged Treasury Securities as provided in Article III hereof in satisfaction
of the obligations of the Holder of the Units of which such Pledged Treasury
Consideration or Pledged Treasury Securities, as applicable, is a part under the
related Purchase Contracts, the inability to make such payments shall constitute
an event of default under the Purchase Contracts and the Collateral Agent shall
have and may exercise, with reference to such Pledged Treasury Securities,
Pledged Applicable Ownership Interest of the Treasury Portfolio or Pledged
Treasury Consideration, as applicable, and such obligations of such Holder, any
and all of the rights and remedies available to a secured party under the Code
and the TRADES Regulations after default by a debtor, and as otherwise granted
herein or under any other law.

     (c)  Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the principal amount of,
or interest on, the Pledged Notes, or (ii) the principal amount of, or interest
(if any) on, the Pledged Treasury Consideration, Pledged Applicable Ownership
Interest of the Treasury Portfolio or Pledged Treasury Securities, subject, in
each case, to the provisions of Article III, and as otherwise granted herein.

     (d)  The Purchase Contract Agent, individually and as attorney-in-fact for
each Holder of Units, agrees that, from time to time, upon the written request
of the Company or the Collateral Agent (acting upon the written request of the
Company), the Purchase Contract Agent or such Holder shall execute and deliver
such further documents and do such other acts and things as the Company or the
Collateral Agent (acting upon the written request of the Company) may reasonably
request in order to maintain the Pledge, and the perfection and priority
thereof, and to confirm the rights of the Collateral Agent hereunder. The
Purchase Contract Agent shall have no liability to any Holder for executing any
documents or taking any such acts requested by the Company or the Collateral
Agent (acting upon the written request of the Company) hereunder, except for
liability for its own negligent act, its own negligent failure to act, its bad
faith or its own willful misconduct.

                                      -17-
<PAGE>

     SECTION 6.2  Substitutions.
                  -------------

     Whenever a Holder has the right to substitute Treasury Securities, Notes,
Treasury Consideration or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, for Collateral held by the Collateral
Agent, such substitution shall not constitute a novation of the security
interest created hereby.

     SECTION 6.3  Tax Event Redemption.
                  --------------------

     Upon the occurrence of a Tax Event Redemption prior to a successful
remarketing of the Pledged Notes, the aggregate Redemption Price payable on the
Tax Event Redemption Date with respect to such Pledged Notes shall be delivered
to the Collateral Agent by the Trustee on or prior to 12:00 p.m., New York City
time, by wire transfer in immediately available funds at such place and at such
account as may be designated by the Collateral Agent in exchange for the Pledged
Notes.  In the event the Collateral Agent receives such Redemption Price, the
Collateral Agent will, at the written direction of the Company, apply an amount,
out of such Redemption Price, equal to the aggregate Redemption Amount with
respect to the Pledged Notes to purchase from the Quotation Agent the Treasury
Portfolio and promptly remit the remaining portion of such Redemption Price to
the Purchase Contract Agent for payment to the Holders of Normal Units.  The
Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account
to secure the obligation of all Holders of Normal Units to purchase Common Stock
of the Company under the Purchase Contracts constituting a part of such Normal
Units, in substitution for the Pledged Notes.  Thereafter the Collateral Agent
shall have such security interests, rights and obligations with respect to the
Treasury Portfolio as it had in respect of the Pledged Notes as provided in
Articles II, III, IV, V and VI, and any reference herein to the Notes shall be
deemed to be reference to such Treasury Portfolio, and any reference herein to
interest on the Notes shall be deemed to be a reference to distributions on such
Treasury Portfolio.

                                  ARTICLE VII

                   REPRESENTATIONS AND WARRANTIES; COVENANTS

     SECTION 7.1  Representations and Warranties.
                  ------------------------------

     The Holders from time to time, acting through the Purchase Contract Agent
as their attorney-in-fact (it being understood that the Purchase Contract Agent
shall not be liable for any representation or warranty made by or on behalf of a
Holder), hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on each day a Holder
Transfers Collateral that:

                                      -18-
<PAGE>

     (a)  such Holder has the power to grant a security interest in and lien on
the Collateral;

     (b)  such Holder is the sole beneficial owner of the Collateral and, in the
case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent, free and clear of any
security interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under Section 2.1
hereof;

     (c)  upon the Transfer of the Collateral to the Collateral Account, the
Collateral Agent, for the benefit of the Company, will have a valid and
perfected first priority security interest therein (assuming that any central
clearing operation or any Intermediary or other entity not within the control of
the Holder involved in the Transfer of the Collateral, including the Collateral
Agent, gives the notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the establishment
and exercise of control pursuant to Section 2.2 hereof); and

     (d)  the execution and performance by the Holder of its obligations under
this Agreement will not result in the creation of any security interest, lien or
other encumbrance on the Collateral other than the security interest and lien
granted under Section 2.1 hereof or violate any provision of any existing law or
regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.

     SECTION 7.2  Covenants.
                  ---------

     The Holders from time to time, acting through the Purchase Contract Agent
as their attorney-in-fact (it being understood that the Purchase Contract Agent
shall not be liable for any covenant made by or on behalf of a Holder), hereby
covenant to the Collateral Agent that for so long as the Collateral remains
subject to the Pledge:

     (a)  neither the Purchase Contract Agent nor such Holders will create or
purport to create or allow to subsist any mortgage, charge, lien, pledge or any
other security interest whatsoever over the Collateral or any part of it other
than pursuant to this Agreement; and

     (b)  neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the pledge hereunder,
transferred in connection with the Transfer of the Units.

                                      -19-
<PAGE>

                                 ARTICLE VIII

                             THE COLLATERAL AGENT

     SECTION 8.1  Appointment, Powers and Immunities.
                  ----------------------------------

     (a)  The Collateral Agent shall act as agent for the Company hereunder with
such powers as are specifically vested in the Collateral Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Each of the Collateral Agent, the Custodial Agent and the Securities
Intermediary:

          (i)    shall have no duties or responsibilities except those expressly
     set forth in this Agreement and no implied covenants or obligations shall
     be inferred from this Agreement against any of them, nor shall any of them
     be bound by the provisions of any agreement by any party hereto beyond the
     specific terms hereof;

          (ii)   shall not be responsible for any recitals contained in this
     Agreement, or in any certificate or other document referred to or provided
     for in, or received by it under, this Agreement, the Units or the Purchase
     Contract Agreement, or for the value, validity, effectiveness, genuineness,
     enforceability or sufficiency of this Agreement (other than as against the
     Collateral Agent), the Units or the Purchase Contract Agreement or any
     other document referred to or provided for herein or therein or for any
     failure by the Company or any other Person (except the Collateral Agent,
     the Custodial Agent or the Securities Intermediary, as the case may be) 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
     hereunder;

          (iii)  shall not be required to initiate or conduct any litigation or
     collection proceedings hereunder (except in the case of the Collateral
     Agent, pursuant to written directions furnished under Section 8.2 hereof,
     subject to Section 8.6 hereof);

          (iv)   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 or willful misconduct; and

          (v)    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 property deposited hereunder.

                                      -20-
<PAGE>

     Subject to the foregoing, during the term of this Agreement, the Collateral
Agent shall take all reasonable action in connection with the safekeeping and
preservation of the Collateral hereunder.

     (b)  No provision of this Agreement shall require the Collateral Agent, the
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or
the Securities Intermediary be liable for any amount in excess of the value of
the Collateral or for any special, indirect, individual, consequential damages
or lost profits or loss of business, arising in connection with this Agreement
even if the Collateral Agent, the Custodial Agent or the Securities Intermediary
has been advised of the likelihood of such loss or damage being incurred and
regardless of the form of action. Notwithstanding the foregoing, the Collateral
Agent, the Custodial Agent, the Purchase Contract Agent and Securities
Intermediary, each in its individual capacity, hereby waive any right of setoff,
bankers lien, liens or perfection rights as securities intermediary or any
counterclaim with respect to any of the Collateral.

     (c)  The Collateral Agent, Custodial Agent and Securities Intermediary
shall have no liability whatsoever for the action or inaction of any Clearing
Agency or any book-entry system thereof. In no event shall any Clearing Agency
or any book-entry system thereof be deemed an agent or subcustodian of the
Collateral Agent, Custodial Agent and Securities Intermediary. The Collateral
Agent, Custodial Agent and Securities Intermediary shall not be responsible or
liable for any failure or delay in the performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including, without limitation, acts of God;
earthquakes; fires; floods; war (whether declared or undeclared); terrorism;
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 8.2  Instructions of the Company.
                  ---------------------------

     The Company shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be, to direct the time, method and
place of conducting any proceeding for the realization of any right or remedy
available to the Collateral Agent, or of exercising any power conferred on the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, or to direct the taking or refraining from taking of any action
authorized by this Agreement; provided, however, that (i) such direction shall
not conflict with the provisions of any law or of this Agreement and (ii) the
Collateral Agent, the Custodial Agent and the Securities

                                      -21-
<PAGE>

Intermediary shall each receive indemnity reasonably satisfactory to it as
provided herein. Nothing in this Section 8.2 shall impair the right of the
Collateral Agent in its discretion to take any action or omit to take any action
which it deems proper and which is not inconsistent with such direction.

     SECTION 8.3  Reliance.
                  --------

     Each of the Securities Intermediary, the Custodial Agent and the Collateral
Agent shall be entitled conclusively to rely upon 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), and upon advice and statements of legal counsel and other
experts selected by the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be.  As to any matters not expressly provided for
by this Agreement, the Collateral Agent, the Custodial Agent and the Securities
Intermediary shall in all cases be fully protected in acting, or in refraining
from acting, hereunder in accordance with instructions given by the Company in
accordance with this Agreement.

     SECTION 8.4  Rights in Other Capacities.
                  --------------------------

     The Collateral Agent, the Custodial Agent and the Securities Intermediary
and their affiliates may (without having to account therefor to the Company)
accept deposits from, lend money to, make their investments in and generally
engage in any kind of banking, trust or other business with the Purchase
Contract Agent, 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
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, and the Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent, any Holder of Units or any holder of Separate Notes
without having to account for the same to the Company; provided that each of the
Securities Intermediary, the Custodial Agent and the Collateral Agent covenants
and agrees with the Company that, except as provided in this Agreement, it shall
not accept, receive or permit there to be created in favor of itself (and waives
any right of set-off or banker's lien with respect to) and shall take no
affirmative action to permit there to be created in favor of any other Person,
any security interest, lien or other encumbrance of any kind in or upon the
Collateral and the Collateral shall not be commingled with any other assets of
any such Person.

     SECTION 8.5  Non-Reliance on Collateral Agent.
                  --------------------------------

     None of the Securities Intermediary, the Custodial Agent or the Collateral
Agent shall be required to keep itself informed as to the performance or
observance by

                                      -22-
<PAGE>

the Purchase Contract Agent or any Holder of Units of this Agreement, the
Purchase Contract Agreement, the Units or any other document referred to or
provided for herein or therein or to inspect the properties or books of the
Purchase Contract Agent or any Holder of Units. The Collateral Agent, the
Custodial Agent and the Securities Intermediary shall not have any duty or
responsibility to provide the Company or the Remarketing Agent with any credit
or other information concerning the affairs, financial condition or business of
the Purchase Contract Agent, any Holder of Units or any holder of Separate Notes
(or any of their respective subsidiaries or affiliates) that may come into the
possession of the Collateral Agent, the Custodial Agent or the Securities
Intermediary or any of their respective affiliates.

     SECTION 8.6  Compensation and Indemnity.
                  --------------------------

     The Company agrees:

     (a)  to pay each of the Collateral Agent, the Custodial Agent and the
Securities Intermediary from time to time such compensation as shall be agreed
in writing between the Company and the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, for all services rendered by each
of them hereunder, and

     (b)  to indemnify the Collateral Agent, the Custodial Agent, the Securities
Intermediary and their officers, directors and agents for, and to hold each of
them harmless from and against, any loss, liability or reasonable out-of-pocket
expense incurred without gross negligence or willful misconduct on its part,
arising out of or in connection with the acceptance or administration of its
powers and duties under this Agreement, including the out-of-pocket costs and
expenses (including fees and expenses of counsel) of defending itself against
any claim or liability in connection with the exercise or performance of such
powers and duties or collecting such amounts. The Collateral Agent, the
Custodial Agent and the Securities Intermediary shall each 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. The provisions of this Section 8.6 shall survive
the resignation or removal of the Collateral Agent, the Custodial Agent and the
Securities Intermediary or the termination of this Agreement.

     SECTION 8.7  Failure to Act.
                  --------------

     In the event of any ambiguity in the provisions of this Agreement or any
dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent, Custodial Agent and the Securities Intermediary shall be
entitled, after prompt notice to the

                                      -23-
<PAGE>

Company and the Purchase Contract Agent, at its sole option, to refuse to comply
with any and all claims, demands or instructions with respect to such property
or funds so long as such dispute or conflict shall continue, and none of the
Collateral Agent, Custodial Agent or the Securities Intermediary shall be or
become liable in any way to any of the parties hereto for its failure or refusal
to comply with such conflicting claims, demands or instructions. The Collateral
Agent, Custodial Agent and the Securities Intermediary 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 Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, or (ii) the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may be, shall have
received security or an indemnity reasonably satisfactory to the Collateral
Agent, Custodial Agent or the Securities Intermediary, as the case may be,
sufficient to save the Collateral Agent, Custodial Agent or the Securities
Intermediary, as the case may be, harmless from and against any and all loss,
liability or reasonable out-of-pocket expense which the Collateral Agent,
Custodial Agent or the Securities Intermediary, as the case may be, may incur by
reason of its acting without willful misconduct or gross negligence. The
Collateral Agent, Custodial Agent or the Securities Intermediary may in addition
elect to commence an interpleader action or seek other judicial relief or orders
as the Collateral Agent, Custodial Agent or the Securities Intermediary, as the
case may be, may deem necessary. Notwithstanding anything contained herein to
the contrary, none of the Collateral Agent, Custodial Agent or the Securities
Intermediary shall be required to take any action that is in its opinion
contrary to law or to the terms of this Agreement, or which would in its opinion
subject it or any of its officers, employees or directors to liability.

     SECTION 8.8  Resignation.
                  -----------

     Subject to the appointment and acceptance of a successor Collateral Agent,
Custodial Agent or Securities Intermediary, as provided below, (a) the
Collateral Agent, Custodial Agent and the Securities Intermediary may resign at
any time by giving notice thereof to the Company and the Purchase Contract Agent
as attorney-in-fact for the Holders of Units, (b) the Collateral Agent,
Custodial Agent and the Securities Intermediary may be removed at any time by
the Company and (c) if the Collateral Agent, Custodial Agent or the Securities
Intermediary fails to perform any of its material obligations hereunder in any
material respect for a period of not less than 20 days after receiving written
notice of such failure by the Purchase Contract Agent and such failure shall be
continuing, the Collateral Agent, Custodial Agent or the Securities Intermediary
may be removed by the Purchase Contract Agent.  The Purchase Contract Agent
shall promptly notify the Company of any removal of the Collateral Agent, the
Custodial Agent or the Securities Intermediary pursuant to clause (c) of the
immediately preceding sentence.  The Company shall promptly notify

                                      -24-
<PAGE>

the Purchase Contract Agent of any removal of the Collateral Agent, the
Custodial Agent or the Securities Intermediary pursuant to clause (b) of the
second preceding sentence. Upon any such resignation or removal, the Company
shall have the right to appoint a successor Collateral Agent, Custodial Agent or
Securities Intermediary, as the case may be. If no successor Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, shall have been
so appointed and shall have accepted such appointment within 30 days after the
retiring Collateral Agent's, Custodial Agent's or Securities Intermediary's
giving of notice of resignation or such removal, then the retiring Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, may at
the Company's expense petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be. Each of the Collateral Agent, Custodial Agent
and the Securities Intermediary shall be a bank which has an office in New York,
New York with a combined capital and surplus of at least $50,000,000. Upon the
acceptance of any appointment as Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, hereunder by a successor Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, such successor
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent, Custodial Agent or
Securities Intermediary, as the case may be, and the retiring Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, shall take all
appropriate action to transfer any money and property held by it hereunder
(including the Collateral) to such successor after the payment of any
outstanding fees, expenses and indemnities due and owing to such remaining
party. The retiring Collateral Agent, Custodial Agent or Securities Intermediary
shall, upon such succession, be discharged from its duties and obligations as
Collateral Agent, Custodial Agent or Securities Intermediary hereunder. After
any retiring Collateral Agent's, Custodial Agent's or Securities Intermediary's
resignation hereunder as Collateral Agent, Custodial Agent or Securities
Intermediary, the provisions of this Section 8.8, and Section 8.6 hereof, shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Collateral Agent, Custodial Agent or
Securities Intermediary. Any resignation or removal of the Collateral Agent
hereunder shall be deemed for all purposes of this Agreement as the simultaneous
resignation or removal of the Custodial Agent and the Securities Intermediary
hereunder.

     SECTION 8.9  Right to Appoint Agent or Advisor.
                  ---------------------------------

     The Collateral Agent shall have the right to appoint or consult with agents
or advisors in connection with any of its duties hereunder, and the Collateral
Agent shall not be liable for any action taken or omitted by, or in reliance
upon the advice of, such agents or advisors selected in good faith.  The
appointment of agents (other than legal counsel) pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.

                                      -25-
<PAGE>

     SECTION 8.10 Survival.
                  --------

     The provisions of this Article VIII shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent, the Custodial
Agent or the Securities Intermediary.

     SECTION 8.11 Exculpation.
                  -----------

     Anything in this Agreement to the contrary notwithstanding, in no event
shall any of the Collateral Agent, the Custodial Agent or the Securities
Intermediary or their officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Collateral Agent, the
Custodial Agent or the Securities Intermediary, or any of them, and regardless
of the form of action.

                                  ARTICLE IX

                                   AMENDMENT

     SECTION 9.1  Amendment Without Consent of Holders.
                  ------------------------------------

     Without the consent of any Holders or the holders of any Separate Notes,
the Company, when authorized by a Board Resolution, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent, at
any time and from time to time, may amend this Agreement, in form satisfactory
to the Company, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Purchase Contract Agent, for any of the following purposes:

          (i)    to evidence the succession of another Person to the Company,
     and the assumption by any such successor of the covenants of the Company;
     or

          (ii)   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 so long as such covenants or such surrender do not adversely affect
     the validity, perfection or priority of the security interests granted or
     created hereunder; or

          (iii)  to evidence and provide for the acceptance of appointment
     hereunder by a successor Collateral Agent, Custodial Agent, Securities
     Intermediary or Purchase Contract Agent; or

          (iv)   to cure any ambiguity, to correct or supplement any provisions
     herein which may be inconsistent with any other such provisions herein, or
     to make any other provisions with respect to such matters or questions
     arising

                                      -26-
<PAGE>

     under this Agreement, provided such action shall not adversely affect the
     interests of the Holders.

     SECTION 9.2  Amendment with Consent of Holders.
                  ---------------------------------

     With the consent of the Holders of not less than a majority of the Purchase
Contracts at the time outstanding, by Act of said Holders delivered to the
Company, the Purchase Contract Agent or the Collateral Agent, as the case may
be, the Company, when duly authorized by a Board Resolution, the Purchase
Contract Agent, the Collateral Agent, the Custodial Agent and the Securities
Intermediary may amend this Agreement for the purpose of modifying in any manner
the provisions of this Agreement or the rights of the Holders in respect of the
Units; provided, however, that no such supplemental agreement shall, without the
consent of the Holder of each Outstanding Unit adversely affected thereby,

          (i)    change the amount or type of Collateral underlying a Unit
     (except for the rights of holders of Normal Units to substitute the
     Treasury Securities for the Pledged Notes, Pledged Treasury Consideration
     or the appropriate Pledged Applicable Ownership Interest of the Treasury
     Portfolio, as the case may be, or the rights of Holders of Stripped Units
     to substitute Notes or the appropriate Treasury Consideration or the
     appropriate Applicable Ownership Interest of the Treasury Portfolio, as
     applicable, for the Pledged Treasury Securities), impair the right of the
     Holder of any Unit to receive distributions on the underlying Collateral or
     otherwise adversely affect the Holder's rights in or to such Collateral; or

          (ii)   otherwise effect any action that would require the consent of
     the Holder of each Outstanding Unit affected thereby pursuant to the
     Purchase Contract Agreement if such action were effected by an agreement
     supplemental thereto; or

          (iii)  reduce the percentage of Purchase Contracts the consent of
     whose Holders is required for any such amendment.

     It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.

     SECTION 9.3  Execution of Amendments.
                  -----------------------

     In executing any amendment permitted by this Section, the Collateral Agent,
the Custodial Agent, the Securities Intermediary and the Purchase Contract Agent
shall receive and (subject to Section 8.1 hereof, with respect to the Collateral
Agent, and Section 7.1 of the Purchase Contract Agreement, with respect to the
Purchase Contract

                                      -27-
<PAGE>

Agent) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement and that all conditions precedent, if any, to the execution and
delivery of such amendment have been satisfied and, in the case of an amendment
pursuant to Section 9.1, that such amendment does not adversely affect the
validity, perfection or priority of the security interests granted or created
hereunder.

     SECTION 9.4   Effect of Amendments.
                   --------------------

          Upon the execution of any amendment under this Article IX, this
Agreement shall be modified in accordance therewith, and such amendment 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 under the Purchase Contract Agreement shall be bound thereby.

     SECTION 9.5   Reference to Amendments.
                   -----------------------

     Certificates authenticated, executed on behalf of the Holders and delivered
after the execution of any amendment pursuant to this Section may, and shall if
required by the Collateral Agent or the Purchase Contract Agent, bear a notation
in form approved by the Purchase Contract Agent and the Collateral Agent as to
any matter provided for in such amendment.  If the Company shall so determine,
new Certificates so modified as to conform, in the opinion of the Collateral
Agent, the Purchase Contract Agent and the Company, to any such amendment may be
prepared and executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in accordance with the
Purchase Contract Agreement in exchange for outstanding Certificates.

                                   ARTICLE X

                                 MISCELLANEOUS

     SECTION 10.1  No Waiver.
                   ---------

     No failure on the part of any party hereto or any of its agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by any party hereto or any of its agents of
any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.  The remedies
herein are cumulative and are not exclusive of any remedies provided by law.

                                      -28-
<PAGE>

     SECTION 10.2  GOVERNING LAW.
                   -------------

     THIS AGREEMENT 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.  Without limiting the foregoing, the above choice of law is expressly
agreed to by the Securities Intermediary, the Collateral Agent, the Custodial
Agent and the Holders from time to time acting through the Purchase Contract
Agent, as their attorney-in-fact, in connection with the establishment and
maintenance of the Collateral Account, which law, for purposes of the Code,
shall be deemed to be the law governing all Security Entitlements related
thereto.  In addition, such parties agree that, for purposes of the Code, New
York shall be the Securities Intermediary's jurisdiction.  The Company, the
Collateral Agent and the Holders from time to time of the Units, acting through
the Purchase Contract Agent as their attorney-in-fact, hereby submit to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York state court sitting in New York City
for the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby.  The Company, the Collateral
Agent and the Holders from time to time of the Units, acting through the
Purchase Contract Agent as their attorney-in-fact, irrevocably waive, to the
fullest extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum.

     SECTION 10.3  Notices.
                   -------

     Unless otherwise stated herein, all notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties.  Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when personally delivered or, in the case of a mailed notice or
notice transmitted by telecopier, upon receipt, in each case given or addressed
as aforesaid.

     SECTION 10.4  Successors and Assigns.
                   ----------------------

     This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
and the Holders from time to time of the Units, by their acceptance of the same,
shall be deemed to have agreed to

                                      -29-
<PAGE>

be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.

     SECTION 10.5  Counterparts.
                   ------------

     This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument, and any of the
parties hereto may execute this Agreement by signing any such counterpart.

     SECTION 10.6  Severability.
                   ------------

     If any provision hereof is invalid and unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.

     SECTION 10.7  Expenses, Etc.
                   -------------

     The Company agrees to reimburse the Collateral Agent, the Securities
Intermediary and the Custodial Agent for:

     (a)  all reasonable out-of-pocket costs and all reasonable expenses of the
Collateral Agent, the Custodial Agent and the Securities Intermediary
(including, without limitation, the reasonable fees and expenses of counsel to
the Collateral Agent, the Custodial Agent and the Securities Intermediary), in
connection with (i) the negotiation, preparation, execution and delivery or
performance of this Agreement and (ii) any modification, supplement or waiver of
any of the terms of this Agreement;

     (b)  all reasonable costs and expenses of the Collateral Agent (including,
without limitation, reasonable fees and expenses of counsel) in connection with
(i) any enforcement or proceedings resulting or incurred in connection with
causing any Holder of Units to satisfy its obligations under the Purchase
Contracts forming a part of the Units and (ii) the enforcement of this Section
10.7; and

     (c)  all transfer, stamp, documentary or other similar taxes, assessments
or charges levied by any governmental or revenue authority in respect of this
Agreement or any other document referred to herein and all costs, expenses,
taxes, assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated
hereby.

                                      -30-
<PAGE>

     SECTION 10.8  Security Interest Absolute.
                   --------------------------

     All rights of the Collateral Agent and security interests hereunder, and
all obligations of the Holders from time to time hereunder, shall be absolute
and unconditional irrespective of:

     (a)  any lack of validity or enforceability of any provision of the
Purchase Contracts or the Units or any other agreement or instrument relating
thereto;

     (b)  any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of Units under the related Purchase Contracts, or any other amendment or
waiver of any term of, or any consent to any departure from any requirement of,
the Purchase Contract Agreement or any Purchase Contract or any other agreement
or instrument relating thereto; or

     (c)  any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.

     SECTION 10.9  Waiver of Jury Trial.
                   --------------------

     EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                                      -31-
<PAGE>

     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

                                        Address for Notices:

                                        Northrop Grumman Corporation
                                        1840 Century Park East
                                        Los Angeles, California 90067
                                        Attention: Secretary
                                        Telecopy: (310) 556-4556

                                        JPMorgan Chase Bank, as Purchase
                                        Contract Agent and as attorney-in-fact
                                        of the Holders from time to time of the
                                        Units

                                        By:  /s/ James P. Freeman
                                             ----------------------------------
                                             Name: James P. Freeman
                                             Title: Vice President

                                        Address for Notices:

                                        JPMorgan Chase Bank
                                        450 West 33rd Street
                                        New York, New York, 10001
                                        Attention: Institutional Trust Services
                                        Telecopy: (212) 946-8160

                                      -32-
<PAGE>

                                       The Bank of New York, as Collateral
                                       Agent, Custodial Agent and Securities
                                       Intermediary

                                       By:  /s/ Remo J. Reale
                                            ----------------------------------
                                            Name: Remo J. Reale
                                            Title: Vice President

                                       Address for Notices:

                                       101 Barclay Street
                                       New York, NY 10286

                                      -33-
<PAGE>

                                   EXHIBIT A

                      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.

                                      A-1
<PAGE>

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:

                                      A-2
<PAGE>

                                   EXHIBIT B

                    INSTRUCTION TO PURCHASE CONTRACT AGENT

JPMorgan Chase Bank,
As Purchase Contract Agent
450 West 33rd Street
New York, New York 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:

                                      B-1
<PAGE>

                                   EXHIBIT C

             INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING

The Bank of New York,
as Custodial Agent
101 Barclay Street
New York, NY 10286

          Re: Notes of Northrop Grumman Corporation (the "Company")

          The undersigned hereby notifies you in accordance with Section 4.5(d)
of the Pledge Agreement, dated as of November 21, 2001 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and JPMorgan Chase Bank, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Normal Units and Stripped Units from time to
time, that the undersigned elects to deliver $__________ aggregate principal
amount of Notes for delivery to the Remarketing Agent on the fourth Business Day
immediately preceding the first day of any Remarketing Period or any Subsequent
Remarketing Period for remarketing pursuant to Section 4.5(d) of the Pledge
Agreement.  The undersigned will, upon request of the Remarketing Agent, execute
and deliver any additional documents deemed by the Remarketing Agent or by the
Company to be necessary or desirable to complete the sale, assignment and
transfer of the Notes tendered hereby.

          The undersigned hereby instructs you, upon receipt of the proceeds of
such remarketing from the Remarketing Agent, net of amounts payable to the
Remarketing Agent in accordance with the Pledge Agreement, to deliver such
proceeds to the undersigned in accordance with the instructions indicated herein
under "A. Payment Instructions." The undersigned hereby instructs you, in the
event of a Failed Remarketing, upon receipt of the Notes tendered herewith from
the Remarketing Agent, to be delivered to the person(s) and the address(es)
indicated herein under "B. Delivery Instructions."

          With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Notes tendered hereby and that the undersigned is the record owner
of any Notes tendered herewith in physical form or a participant in The
Depositary Trust Company ("DTC") and the beneficial owner of any Notes tendered
herewith by book-entry transfer to your account at DTC and (ii) agrees to be
bound by the terms and

                                      C-1
<PAGE>

conditions of Section 4.5(d) of the Pledge Agreement. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.

Date: _______________              Signature:__________________________

                                   Signature Guarantee:

Name:          Social Security or other Taxpayer Identification Number, if any:

Address:

A. PAYMENT INSTRUCTIONS

Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.

Name(s):  ________________________________
              (Please Print)

Address:  ________________________________
              (Please Print)

          (Zip Code)

          (Tax Identification or Social Security Number):

B. DELIVERY INSTRUCTIONS

In the event of a Failed Remarketing, Notes which are in physical form should be
delivered to the person(s) set forth below and mailed to the address set forth
below.

Name(s):  ________________________________
              (Please Print)

                                      C-2
<PAGE>

Address:  ________________________________
              (Please Print)

          (Zip Code)

          (Tax Identification or Social Security Number):

In the event of a Failed Remarketing, Notes which are in book-entry form should
be credited to the account at The Depository Trust Company set forth below.

Name of Account Party:                  DTC Account Number:

                                      C-3
<PAGE>

                                   EXHIBIT D

                   INSTRUCTION TO CUSTODIAL AGENT REGARDING

                          WITHDRAWAL FROM REMARKETING

The Bank of New York
as Collateral Agent
101 Barclay Street
New York, NY 10286

          Re: Notes of Northrop Grumman Corporation (the "Company")

          The undersigned hereby notifies you in accordance with Section 4.5(d)
of the Pledge Agreement, dated as of November 21, 2001 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and JPMorgan Chase Bank, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Normal Units and Stripped Units from time to
time, that the undersigned elects to withdraw the $_____ aggregate principal
amount of Notes delivered to the Custodial Agent on ___________, 2004 for
remarketing pursuant to Section 4.5(d) of the Pledge Agreement.  The undersigned
hereby instructs you to return such Notes to the undersigned in accordance with
the undersigned's instructions.  With this notice, the Undersigned hereby agrees
to be bound by the terms and conditions of Section 4.5(d) of the Pledge
Agreement.  Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.

Date: _______________              Signature:__________________________

                                   Signature Guarantee:

Name:          Social Security or other Taxpayer Identification Number, if any:

Address:

                                      D-1
<PAGE>

A. DELIVERY INSTRUCTIONS

In the event of a Failed Remarketing, Notes which are in physical form should be
delivered to the person(s) set forth below and mailed to the address set forth
below.

Name(s):  ________________________________
          (Please Print)

Address:  ________________________________
          (Please Print)

          (Zip Code)

          (Tax Identification or Social Security Number):

In the event of a Failed Remarketing, Notes which are in book-entry form should
be credited to the account at The Depository Trust Company set forth below.

Name of Account Party:                  DTC Account Number:

                                      D-2

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