<PAGE>
As filed with the Securities and Exchange Commission on May 11, 1999
Registration No. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
NORTHROP GRUMMAN CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 95-1055798
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
1840 CENTURY PARK EAST
LOS ANGELES, CALIFORNIA 90067
(310) 553-6262
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
JOHN H. MULLAN, ESQ., CORPORATE VICE PRESIDENT AND SECRETARY
NORTHROP GRUMMAN CORPORATION
1840 CENTURY PARK EAST
LOS ANGELES, CALIFORNIA 90067
(310) 553-6262
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
COPIES TO:
John D. Hussey, Esq.
James M. Rene, Esq.
Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street, 48th Floor
Los Angeles, California 90071
(213) 620-1780
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
FROM TIME TO TIME AFTER THIS REGISTRATION STATEMENT IS DECLARED EFFECTIVE.
---------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
reinvestment plans, please check the following box. [X]
---------------
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Maximum
Proposed Maximum Aggregate Amount of
Title of Each Class of Amount to be Offering Price Offering Registration
Securities to be Registered Registered(1)(2) Per Unit(2) Price(1)(2) Fee
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities,
Preferred Stock, $1.00
par value, Common
Stock, $1.00 par
value(3)(4), Warrants
to Purchase Debt
Securities, Warrants to
Purchase Equity
Securities(4)......... $1,500,000,000 $417,000
- --------------------------------------------------------------------------------------------
Capital Securities..... (5) (5) (5) None
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
</TABLE>
(1) In no event will the aggregate initial offering price of the Debt
Securities, Preferred Stock, Common Stock, Warrants to Purchase Debt
Securities and Warrants to Purchase Equity Securities issued under this
Registration Statement exceed $1,500,000,000, or, if any securities are in
any foreign currency units, the U.S. dollar equivalent of $1,500,000,000,
and if any securities are issued at original issue discount, such greater
amount as shall result in an aggregate offering price not to exceed
$1,500,000,000.
(2) Not applicable pursuant to General Instruction II D to Form S-3.
(3) Includes Preferred Stock Purchase Rights ("Rights"). Prior to the
occurrence of certain events, the Rights will not be exercisable or
evidenced separately from the Common Stock.
(4) The aggregate amount of Common Stock registered hereunder is limited to
that which is permissible under Rule 415(a)(4) of the Securities Act.
(5) In addition to any Preferred Stock or Common Stock that may be issued
directly under this Registration Statement, there are being registered
hereunder an indeterminate number of shares of Preferred Stock or Common
Stock as may be issued upon conversion or exchange of Debt Securities or
Preferred Stock, as the case may be. No separate consideration will be
received for any shares of Preferred Stock or Common Stock so issued upon
conversion or exchange.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until our registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Prospectus, Subject to Completion, Dated May 11, 1999
Northrop Grumman Corporation
1840 Century Park East
Los Angeles, California 90067
(310) 553-6262
$1,500,000,000
Northrop Grumman Corporation
Debt Securities
Preferred Stock
Common Stock
Warrants to Purchase Debt Securities
Warrants to Purchase Equity Securities
You should read this prospectus and any supplement carefully before you
invest.
This prospectus describes debt and equity securities that we may issue and
sell at various times:
. our prospectus supplements will contain the specific terms of each
issuance of debt or equity securities.
. we can issue debt and equity securities with a total offering price of
up to $1,500,000,000 under this prospectus.
. we may sell the debt and equity securities to or through underwriters,
dealers or agents. We also may sell debt and equity securities directly
to investors.
Selling stockholders may also sell the securities covered by this prospectus
on the New York Stock Exchange, in ordinary brokerage transactions, in
negotiated transactions or otherwise at market prices prevailing at the time of
sale or at negotiated prices.
Our common shares are listed on the New York Stock Exchange and the Pacific
Stock Exchange under the trading symbol "NOC." The closing price of our common
stock on May 10, 1999, was $67 1/4 per share. We will not sell any of the
securities being offered without delivery of the applicable prospectus
supplement describing the method and terms of the offering of such series of
securities being offered. Any common stock sold pursuant to a prospectus
supplement will be listed on the New York Stock Exchange, subject to official
notice of issuance.
Neither the Securities and Exchange Commission nor any state securities
regulators has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
This Prospectus is dated , 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
About This Prospectus...................................................... 2
Where You Can Find More Information........................................ 2
Forward-Looking Statements................................................. 3
Northrop Grumman Corporation............................................... 4
Use of Proceeds............................................................ 5
Ratio of Earnings to Fixed Charges......................................... 5
Description of Debt Securities............................................. 5
Description of Preferred Stock............................................. 11
Description of Common Stock................................................ 14
Description of Warrants.................................................... 16
Plan of Distribution....................................................... 17
Validity of the Debt and Equity Securities................................. 19
Experts.................................................................... 19
</TABLE>
About This Prospectus
This prospectus is part of a registration statement that we filed with the
SEC using a "shelf" registration process. Under this shelf registration
process, we may sell any combination of the debt and equity securities
described in this prospectus in one or more offerings for total proceeds of up
to $1,500,000,000. This prospectus provides you with a general description of
the securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. This prospectus supplement may add, update or change information
contained in this prospectus. It is important for you to consider the
information contained in this prospectus and any prospectus supplement together
with additional information described under the next heading, "Where You Can
Find More Information."
Where You Can Find More Information
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. Our SEC filings are
available on the SEC's web site at http://www.sec.gov. You also may read and
copy any document we file at the SEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-
SEC-0330 for further information about their public reference rooms, including
copy charges. You also can obtain information about us from the New York Stock
Exchange at 20 Broad Street, New York, New York 10005.
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<PAGE>
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede information in this prospectus
and other filings with the SEC. We incorporate by reference the documents
listed below, which we already have filed with the SEC, and any future filings
we make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until we sell all of the debt and equity
securities:
. our Annual Report on Form 10-K for the year end December 31, 1998; and
. the description of the common stock set forth in the Registration
Statement on Form 8-B dated June 20, 1985.
You may read or copy these documents through our web site at
http://www.northgrum.com. You may request a copy of these filings at no cost,
by writing or calling us at the following address:
Northrop Grumman Corporation
1840 Century Park East
Los Angeles, California 90067
(310) 553-6262
You should rely only on the information contained in, or incorporated by
reference into, this prospectus or any applicable prospectus supplement. We
have not authorized anyone to provide you with additional or different
information. You should not assume that the information in this prospectus, any
prospectus supplement, or any document incorporated by reference is accurate as
of any date other than the date of those documents.
You may also obtain from the SEC a copy of the registration statement and
exhibits that we filed with the SEC when we registered the debt and equity
securities. The registration statement may contain additional information that
may be important to you.
Forward-Looking Statements
We make statements in this prospectus and the documents incorporated by
reference that are considered forward-looking statements under the federal
securities laws. Sometimes these statements will contain words such as
"believes," "expects," "intends," "plans," and other similar words. These
statements are not guarantees of our future performance and are subject to
risks, uncertainties and other important factors that could cause our actual
performance or achievements to be materially different from those we may
project. These forward-looking statements also represent our estimates and
assumptions only as of the date they were made.
These risks, uncertainties and factors include:
. our successful performance of internal plans;
. government customers' budgetary restraints;
. customer changes in short-range and long-range plans;
. domestic and international competition in both the defense and commercial
areas;
. product performance;
3
<PAGE>
. continued development and acceptance of new products;
. performance issues with key suppliers and subcontractors;
. government import and export policies;
. termination of government contracts;
. the outcome of political and legal processes;
. legal, financial and governmental risks related to international
transactions and global needs for military and commercial aircraft and
electronic systems and support; and
. other economic, political and technological risks and uncertainties.
Given these uncertainties, you should not place undue reliance on these
forward-looking statements. Please see the documents incorporated by reference
for more information on these factors.
Northrop Grumman Corporation
Northrop Grumman is an advanced technology company operating in the
Integrated Systems and Aerostructures (ISA), Electronic Sensors and Systems
(ESS), and Information Technology (Logicon) segments of a broadly defined
aerospace industry. The ISA segment includes the design, development and
manufacturing of aircraft and aircraft subassemblies. The ESS segment includes
the design, development, manufacturing and integration of electronic systems
and components for military and commercial use. The Information Technology
(Logicon) segment includes the design, development, operation and support of
computer systems for scientific and management information.
We are the prime contractor for the B-2 bomber and the principal
subcontractor to The Boeing Company on the F/A-18 program. We manufacture
portions of the Boeing 737, 747, 757, 767 and 777 jetliners, the Gulfstream IV
and V business jets, and the Boeing C-17 military transport. We are prime
contractor for the E-8 Joint Surveillance Target Radar System (Joint STARS). We
are also a major producer of airborne early warning and control systems,
including the all-weather E-2C Hawkeye aircraft. Our ESS segment's primary
expertise is the ability to conceive, design, produce and support high
performance sensors and intelligence systems operating in all environments from
underseas to outer space. Programs in the ESS segment include the AN/APG-66/68
airborne fire control radar aboard F-16 fighters; the AN/APG-77 radar system;
the Longbow fire control radar; the Longbow missile for the AH-64 Apache attack
helicopter, the AN/ALQ-135, an internally mounted radar jammer deployed on F-15
aircraft, the AN/ALQ-162 Shadowbox, a jammer built specifically to counter
continuous wave radars, the ALQ-165 airborne self-protection jammer, the three-
dimensional AN/TPS-70/75 radars and predecessor AN/TPS-43, and the ASR-12, a
solid-state, new generation derivative of the ASR-9 terminal radar. Logicon
designs, develops, operates and supports computer systems for scientific and
management information.
4
<PAGE>
Use of Proceeds
We will use the net proceeds from the sale of the debt and equity
securities for general corporate purposes. These purposes may include
repayment of debt, working capital needs, capital expenditures, acquisitions
and any other general corporate purpose. If we identify a specific purpose for
the net proceeds of an offering, we will describe that purpose in the
applicable prospectus supplement. We will not receive any proceeds from the
sale of securities by selling stockholders.
Ratio of Earnings to Fixed Charges
The following table shows ratios of earnings to fixed charges for each of
the periods indicated.
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
2.2 3.2 2.4 3.6 1.7
</TABLE>
For purposes of calculating the above ratios:
. earnings consist of income from continuing operations before income
taxes, and
. fixed charges consist of interest on all indebtedness, amortization of
debt issuance costs, and the portion of rental expense we consider
representative of an interest factor.
Description of Debt Securities
As used in this prospectus, "debt securities" means the senior and
subordinated debentures, notes, bonds and other evidences of indebtedness that
we issue and a trustee authenticates and delivers under the applicable
indenture. We will describe the particular terms of any series of debt
securities, and the extent to which the general terms summarized below may
apply, in the prospectus supplement relating to that series.
We will issue senior debt securities and subordinated debt securities under
separate indentures between us and The Chase Manhattan Bank, as trustee. We
have summarized selected provisions of the indentures on the following pages.
The summary is not complete. We filed the forms of both the senior indenture
and the subordinated indenture as exhibits to this registration statement and
you should read the indentures for provisions that may be important to you. If
you would like more information on these provisions, see "Where You Can Find
More Information" on how to locate the indentures.
If we use another trustee or another indenture for a series of debt
securities, we will provide the details in a prospectus supplement. We will
file the forms of any other indentures with the SEC at the time we use them.
5
<PAGE>
Terms
The indenture provides for the issuance of debt securities in one or more
series. A prospectus supplement relating to a series of debt securities will
include specific terms relating to the offering. These terms will include some
or all of the following:
. the title and type of the debt securities;
. whether the debt securities will be senior or subordinated debt
securities and the terms of the subordination provisions;
. any limit on the total principal amount of the debt securities;
. the person who will receive interest payments on any debt securities if
other than the registered holder;
. the price or prices at which we will sell the debt securities;
. the maturity date or dates of the debt securities;
. the rate or rates, which may be fixed or variable, per annum at which the
debt securities will bear interest and the date from which such interest
will accrue;
. the dates on which interest will be payable and the related record dates;
. whether any index, formula or other method will determine payments of
principal or interest and the manner of determining the amount of such
payments;
. the place or places of payments on the debt securities;
. whether the debt securities are redeemable;
. any redemption dates, prices, obligations and restrictions on the debt
securities;
. any mandatory or optional sinking fund or purchase fund or analogous
provisions;
. the denominations of the debt securities if other than $1,000 or
multiples of $1,000;
. the currency of principal and interest payments if other than US Dollars;
. any provisions granting special rights if certain events happen;
. any deletions from, changes in or additions to the events of default or
the covenants specified in the indenture;
. any trustees, authenticating or paying agents, transfer agents,
registrars or other agents for the debt securities if other than The
Chase Manhattan Bank;
. any conversion or exchange features of the debt securities;
. whether we will issue the debt securities as original issue discount
securities for federal income tax purposes;
. any special tax implications of the debt securities;
. the terms of payment upon acceleration; and
. any other material terms of the debt securities.
We may issue debt securities that are convertible into or exchangeable for
our common stock or other securities, or the debt or equity of another company.
If we issue these types of debt securities, we will provide additional
information in a prospectus supplement.
6
<PAGE>
We may sell debt securities at a discount below their stated principal
amount, bearing no interest or interest at a rate that, at the time of
issuance, is different than market rates. When we refer to the principal and
interest on debt securities, we also mean the payment of any additional amounts
that we must pay under the indenture or the debt securities, including amounts
for certain taxes, assessments or other governmental charges which holders of
debt securities must pay.
Denomination, Form, Payment and Transfer
Normally, we will denominate and make payments on debt securities in U.S.
dollars. If we issue debt securities denominated, or with payments, in a
foreign or composite currency, a prospectus supplement will specify the
currency or composite currency.
We may from time to time issue debt securities as registered securities.
This means that holders will be entitled to receive certificates representing
the debt securities registered in their name. You can transfer or exchange debt
securities in registered form without service charge, upon reimbursement of any
taxes or government charges. You can make this transfer or exchange at the
trustee's corporate trust office or at any other office we maintain for such
purposes. If the debt securities are in registered form, we can pay interest by
check mailed to the person in whose name the debt securities are registered on
the days specified in the indenture.
As a general rule, however, we will issue debt securities in book-entry
form. This means that one or more permanent global certificates registered in
the name of a depositary, or a nominee of the depositary, will represent the
debt securities. Only persons who have accounts with depositaries, which are
known as participants, or persons that may hold interests through participants,
can have beneficial ownership interests in global certificates representing a
series of debt securities. The depositary will maintain a computerized book-
entry and transfer system that keeps track of the principal amounts of debt
securities held in the accounts of participants. Participants keep records of
the interests of their clients who have purchased debt securities through them.
Beneficial ownership interests in debt securities issued in book-entry form may
be shown only on, and may be transferred only through, records maintained by
the depositary and its participants. Some states require that certain
purchasers receive securities only in certificate form. These state laws may
limit the ability of beneficial owners to transfer their interests.
The Depositary Trust Company, or DTC, frequently acts as the depositary for
debt securities. DTC is owned by a number of its participants and by the NYSE,
AMEX and the NASD. The information below regarding DTC, which DTC provides, is
included for informational purposes only. You should not treat it as a
representation, warranty or contract modification of any kind. If we issue the
debt securities of any series in book-entry form and the depositary is someone
other than DTC, we will provide you with additional information in a prospectus
supplement.
DTC holds securities that its participants deposit. Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and other organizations. DTC's book-entry system is also available to other
organizations such as securities brokers and dealers, banks and trust companies
that work through a participant. DTC electronically records the settlement
among participants of their securities transactions in deposited securities.
Issuers make interest and principal payments to DTC, which in turn credits
payments to participants' accounts according to their beneficial ownership
interests as reflected in DTC's records. In addition, DTC currently assigns any
voting rights to participants by using an omnibus proxy. These payments and
voting rights are governed by the customary practices between the participants
and holders of beneficial interests.
7
<PAGE>
DTC will be the sole owner of the global certificates. We, the trustee and
the paying agent have no responsibility or liability for the records relating
to beneficial ownership interests in the global certificates or for the
payments of principal and interest due for the accounts of beneficial holders
of interests in the global certificates. The global certificates representing a
series of debt securities normally may not be transferred except by DTC to its
nominees or successors in accordance with the indenture. A series of debt
securities represented by global certificates will be exchangeable for debt
securities in registered form with the same terms in authorized denominations
if:
. DTC notifies us that it is unwilling or unable to continue as depositary
or if DTC ceases to be a clearing agency registered under applicable law
and we do not appoint a successor depositary within 90 days; or
. we decide not to require all of the debt securities of a series to be
represented by global certificates and notify the trustee of that
decision.
Events of Default
Unless we indicate otherwise in a prospectus supplement, the following are
events of default under the indenture with respect to any issued debt
securities:
. failure to pay the principal or any premium on any debt security of that
series when due;
. failure for 30 days to pay interest on any debt security of that series
when due;
. failure to deposit any sinking fund payment on any debt security of that
series when due;
. failure to perform any other covenant in the indenture that continues for
90 days after we have been given written notice of such failure; or
. certain events in bankruptcy, insolvency or reorganization.
An event of default for one series of debt securities does not necessarily
constitute an event of default for any other series. The trustee may withhold
notice to the debt securities holders of any default, except a payment default,
if it considers such action to be in the holders' interests.
If an event of default occurs and continues, the trustee, or the holders of
at least 25% in aggregate principal amount of the debt securities of the
series, may declare the entire principal of all the debt securities of that
series to be due and payable immediately. If this happens, subject to certain
conditions, the holders of a majority of the aggregate principal amount of the
debt securities of that series can void the acceleration of payment.
The indenture provides that the trustee has no obligation to exercise any of
its rights at the direction of any holders, unless the holders offer the
trustee reasonable indemnity. If they provide this indemnification, the holders
of a majority in principal amount of any series of debt securities have the
right to direct any proceeding, remedy, or power available to the trustee with
respect to that series.
Subordination
The subordinated debt securities will be subordinated and junior in right of
payment to all our senior indebtedness to the extent set forth in the
applicable prospectus supplement.
8
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Conversion Rights
We will describe the terms upon which debt securities may be convertible
into our common stock or other securities in a prospectus supplement. These
terms will include provisions as to whether conversion is mandatory or
optional. They may also include provisions adjusting the number of shares of
our common stock or other securities.
Certain Covenants
Under the indenture, we will agree to the following:
Limitations on Liens. The indenture restricts our ability and the ability of
certain of our subsidiaries to encumber assets. If we, or any restricted
subsidiary, pledge or mortgage any of our property to secure any debt, then we
will, unless an exception applies, pledge or mortgage the same property to the
trustee to secure the debt securities for as long as such debt is secured by
such property. Restricted subsidiary means one of our subsidiaries that has
substantially all of its assets located in, or carries on substantially all of
its business in, the United States.
This restriction will not apply in certain situations. We may encumber
assets if the encumbrance is a permitted lien, as defined below, without regard
to the amount of debt secured by the encumbrance. We may also encumber assets
if the amount of all debt secured by encumbrances (other than certain permitted
encumbrances) does not exceed the greater of $300,000,000 or 10% of our
consolidated net tangible assets. Consolidated net tangible assets means our
total assets, including the assets of our subsidiaries, as reflected in our
most recent balance sheet, less current liabilities, goodwill, patents and
trademarks. Permitted liens include:
. liens on a corporation's property, stock or debt at the time it becomes a
restricted subsidiary;
. liens on property at the time we or a restricted subsidiary acquires the
property;
. liens securing debt owing by a restricted subsidiary to us or another
restricted subsidiary;
. liens existing at the time the indenture became effective;
. liens on property of an entity at the time such entity is merged into or
consolidated with us or a restricted subsidiary or at the time we or a
restricted subsidiary acquire all or substantially all of the assets of
the entity;
. liens in favor of any governmental customer to secure payments or
performance pursuant to any contract or statute, or to secure
indebtedness we incur with respect to the acquisition or construction of
the property subject to the liens, any related indebtedness, or debt
guaranteed by a government or governmental authority; and
. any renewal, extension or replacement for any lien permitted by one of
the exceptions described above.
Limitations on Sale Leaseback Arrangements. Except in certain circumstances,
the indenture also restricts our ability and the abilities of certain of our
subsidiaries to enter into sale-leaseback transactions. Such an arrangement is
permissible if we or our restricted subsidiary would be permitted to incur
indebtedness secured by a principal property at least equal in amount to the
attributable debt with respect to such arrangement. Sale-leaseback transaction
means, subject to certain exceptions, an arrangement pursuant to which we, or a
restricted subsidiary, transfer a principal property to a person and
contemporaneously lease it back from that person. Principal property means,
with certain exceptions, any manufacturing plant or facility located in the
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United States which we or one or more of our restricted subsidiaries owns,
except any plant or facility which our board of directors determines is not of
material importance to our total business. Attributable debt for a sale and
leaseback transaction means the lesser of the fair value of such property as
determined by our board of directors or the present value of the obligation of
the lessee for net rental payments during the remaining term of the lease.
Funded Debt of Restricted Subsidiaries. Except in certain circumstances, the
indenture restricts the ability of any restricted subsidiary to issue, assume
or guarantee any funded debt unless the funded debt of all restricted
subsidiaries does not exceed 10% of our consolidated net tangible assets.
Funded debt means any indebtedness for money borrowed which matures more than
one year from the date of its creation.
The applicable indenture will not otherwise limit our ability to incur
additional debt, unless we tell you this in a prospectus supplement.
Consolidation, Merger or Sale
We may neither consolidate with nor merge into another corporation nor
transfer all or substantially all of our assets to another corporation unless:
. the successor corporation assumes all of our obligations under the debt
securities and the indenture;
. immediately following the transaction, no event of default and no
circumstances which, after notice or lapse of time or both, would become
an event of default, shall have happened and be continuing; and
. we have delivered to the trustee an officers' certificate and a legal
opinion confirming that we have complied with the indenture.
Redemption, Sinking Fund and Defeasance
We may redeem some or all of the debt securities at our option, subject to
the conditions stated in the applicable prospectus supplement. If a series of
debt securities is subject to a sinking fund, the prospectus supplement will
describe those terms.
The indenture permits us to discharge or defease certain of our obligations
for any series of debt securities at any time. We may defease a series of debt
securities by depositing with the trustee cash or government securities
sufficient to pay all sums due on that series. Under certain circumstances, if
we defease a series of debt securities, we will no longer have a legal
obligation to pay principal, interest and any premium on that series. We can
defease one series of debt securities without defeasing any other series.
Under U.S. federal income tax law, a discharge of our obligation to pay
principal, interest and any premium on the debt securities would be treated as
an exchange of the debt securities for a new security representing an interest
in the trust. Each holder would have to recognize gain or loss equal to any
difference between the holder's cost or other tax basis for the debt securities
and the value of the holder's interest in the trust. Holders would not have to
recognize gain or loss in the event of a defeasance of certain contractual
obligations without a discharge of our legal obligation to pay principal,
interest and any premium on the debt securities. Prospective investors should
consult their own tax advisers as to the consequences of a discharge, including
the applicability and effect of tax laws other than U.S. federal income tax
law.
10
<PAGE>
Changes to the Indenture
Holders who own more than 50% in principal amount of the debt securities of
a series can agree with us to change the provisions of the indenture relating
to that series. However, no change can affect the payment terms or the
percentage required to change other terms without the consent of all holders of
debt securities of the affected series.
We may enter into supplemental indentures for other specified purposes and
to make changes that would not materially adversely affect your interests,
including the creation of any new series of debt securities, without the
consent of any holder of debt securities.
Governing Law
New York law will govern the indentures and the debt securities.
Trustee
The Chase Manhattan Bank will serve as trustee under each indenture. It is
the trustee under the existing senior debt securities indenture pursuant to
which our existing senior debt securities have been issued. If we use a
different trustee for any debt securities, we will let you know in a prospectus
supplement.
Description of Preferred Stock
The following description is a general summary of the terms of the preferred
stock which we may issue. The description below and in any prospectus
supplement is not complete. Our Certificate of Incorporation, as amended, and
the applicable Certificate of Designation to our Certificate of Incorporation
describe the terms of the related series of preferred stock. We will provide
you copies of these documents upon request.
General. Our Certificate of Incorporation authorizes our board of directors,
from time to time and without further stockholder action, to provide for the
issuance of up to 10,000,000 shares of preferred stock, par value $1.00 per
share. Our board of directors may authorize the issuance of preferred stock in
one or more series and may fix the relative rights and preferences of the
shares, including voting powers, dividend rights, liquidation preferences,
redemption rights and conversion privileges.
As of the date of this prospectus, no shares of preferred stock are
outstanding, the board of directors has not provided for the issuance of any
series of preferred stock, and there are no agreements or understandings for
the issuance of any preferred stock, except for the issuance of Series A Junior
Participating Preferred Stock in connection with preferred share purchase
rights. These rights were declared as a dividend on our common stock
outstanding in October, 1998, and common stock issued after that date.
The shares of any series of preferred stock will be, when issued, fully paid
and non-assessable and holders of preferred stock will not have preemptive
rights.
You should refer to the prospectus supplement relating to the class or
series of preferred stock being offered for the specific terms of that class or
series, including:
. the title and stated value of the preferred stock being offered;
. the number of shares of preferred stock being offered, their liquidation
preference per share and their purchase price;
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. the dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculating the payment date(s) applicable to the preferred stock being
offered;
. whether dividends shall be cumulative or non-cumulative and, if
cumulative, the date from which dividends on the preferred stock being
offered shall accumulate;
. the procedures for any auction and remarketing, if any, for the preferred
stock being offered;
. the provisions for a sinking fund, if any, for the preferred stock being
offered;
. the provisions for redemption, if applicable, of the preferred stock
being offered;
. any listing of the preferred stock being offered on any securities
exchange or market;
. the terms and conditions, if applicable, upon which the preferred stock
being offered will be convertible into our common stock, including the
conversion price, or the manner of calculating the conversion price, and
the conversion period;
. the terms and conditions, if applicable, upon which the preferred stock
being offered will be exchangeable into debt or equity securities,
including the exchange price, or the manner of calculating the exchange
price, and the exchange period;
. voting rights, if any, of the preferred stock being offered;
. whether interests in the preferred stock being offered will be
represented by depositary shares;
. a discussion of any material and/or special United States federal income
tax considerations applicable to the preferred stock being offered;
. the relative ranking and preferences of the preferred stock being offered
as to dividend rights and rights upon our liquidation, dissolution or
winding up of our affairs;
. any limitations on the issuance of any class or series of preferred stock
ranking senior to or on a parity with the series of preferred stock being
offered as to dividend rights and rights upon our liquidation,
dissolution or winding up of our affairs; and
. any other specific terms, preferences, rights, limitations or
restrictions of the preferred stock being offered.
Rank. Unless otherwise specified in the applicable prospectus supplement,
the preferred stock will, with respect to distribution rights and rights upon
our liquidation, dissolution or winding up of our affairs, rank:
(1) senior to all classes or series of our common stock and to all
equity securities the terms of which specifically provide that such equity
securities rank junior to the preferred stock being offered;
(2) on a parity with all equity securities issued by us other than those
referred to in clauses (1) and (3) of this subheading; and
(3) junior to all equity securities issued by us the terms of which
specifically provide that such equity securities rank senior to the
preferred stock being offered.
Distributions. A prospectus supplement will describe the circumstances
relating to distributions on our preferred stock. If our board of directors
approves distributions, holders of our preferred stock of each series will be
entitled to receive distributions out of our assets legally available for
payment to stockholders. These distributions may be cash distributions, or
distributions in kind or in other
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property. The prospectus supplement will describe the rates of the
distributions and the dates we will make distributions. Each distribution shall
be payable to holders of record as they appear on our stock transfer books on
such record dates as shall be fixed by our board of directors. Distributions on
any series of preferred stock, if cumulative, will be cumulative from and after
the date set forth in the applicable prospectus supplement.
Redemption. A prospectus supplement may provide that the preferred stock
will be subject to mandatory redemption or redemption at our option, in whole
or in part. The prospectus supplement will describe the terms, the times and
the redemption prices of the preferred stock.
Liquidation Preference. If we liquidate, dissolve or wind up our affairs,
then, before we make distributions to holders of common stock or any other
class or series of shares of our capital stock ranking junior to the preferred
stock in the distribution of assets, the holders of each series of preferred
stock shall be entitled to receive liquidating distributions out of our assets
legally available for distribution to stockholders. We will make liquidating
distributions in the amount of the liquidation preference set forth in the
applicable prospectus supplement plus an amount equal to all accumulated and
unpaid distributions. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of shares of preferred
stock will have no right or claim to any of our remaining assets.
If we liquidate, dissolve or wind up and we do not have enough legally
available assets to pay the amount of the liquidating distributions on all
outstanding shares of preferred stock and other classes of capital stock
ranking equally with the preferred stock in the distribution of assets, then
the holders of the preferred stock and all other such classes or series of
shares of capital stock shall share ratably in any such distribution of assets
in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
Voting Rights. Holders of preferred stock will not have any voting rights,
except as set forth below or as otherwise from time to time required by law, or
as indicated in the applicable prospectus supplement.
Under the Delaware General Corporation Law, holders of outstanding shares of
a series of preferred stock may be entitled to vote as a separate class on a
proposed amendment to the terms of that series of preferred stock or our
Certificate of Incorporation if the amendment would:
(a) increase or decrease the aggregate number of authorized shares of
that series of preferred stock;
(b) increase or decrease the par value of that series of preferred
stock; or
(c) alter or change the powers, preferences or special rights of the
shares of such class so as to affect them adversely,
in which case the approval of proposed amendment would require the affirmative
vote of at least a majority of the outstanding shares of that series of
preferred stock.
Conversion Rights. The terms and conditions, if any, upon which any series
of preferred stock is convertible into common stock will be set forth in the
applicable prospectus supplement. These terms will include the following:
(a) the number of shares of common stock into which the shares of
preferred stock are convertible;
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<PAGE>
(b) the conversion price or the manner of calculating the conversion
price;
(c) the conversion date(s) or period(s);
(d) provisions as to whether conversion will be at the option of the
holders of the preferred stock or at our option; and
(e) the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such
series of preferred stock.
Transfer Agent and Registrar. The transfer agent and registrar for the
preferred stock will be set forth in the applicable prospectus supplement.
Description of Common Stock
Our Certificate of Incorporation provides that we have authority to issue
200,000,000 shares of common stock, par value $1.00 per share. As of April 30,
1999, 68,908,626 shares of common stock were outstanding. Our common stock is
listed on the New York Stock Exchange and the Pacific Stock Exchange.
Dividends. Dividends may be paid on the common stock and on any class or
series of stock entitled to participate with the common stock as to dividends,
but only when and as declared by our board of directors.
Voting Rights. Each holder of our common stock is entitled to one vote per
share on all matters submitted to a vote of stockholders and does not have
cumulative voting rights.
Liquidation. If we liquidate, holders of common stock are entitled to
receive all remaining assets available for distribution to stockholders after
satisfaction of our liabilities and the preferential rights of any preferred
stock that may be outstanding at that time. Our outstanding common shares are
fully paid and nonassessable. The holders of our common stock do not have any
preemptive, conversion or redemption rights. The registrar and transfer agent
for our common stock is ChaseMellon Shareholder Services, L.L.C.
Preferred Stock Purchase Rights. On September 16, 1998, our board of
directors declared a dividend distribution of one preferred share purchase
right for each outstanding share of common stock. Each right, when it becomes
exercisable, entitles the registered holder to purchase from us one one-
thousandth of a share of our Series A Junior Participating Preferred Stock,
$1.00 per value per share, at a price of $250.00 per one one-thousandth of a
preferred share, subject to adjustment. These rights attached to all
certificates representing our common shares outstanding on October 2, 1998, and
attach to common shares issued after that date until the distribution date
described in the next sentence. No separate right certificates will be
distributed. The rights will separate from our common shares on the
distribution date. Distribution date means the date which is the earliest to
occur of (i) a person or group of affiliated or associated persons having
acquired beneficial ownership of 15% or more of our outstanding common shares
(except pursuant to a permitted offer); or (ii) 10 days (or such later date as
our board of directors may determine) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer, the
consummation of which would result in a person or group acquiring 15% of our
outstanding voting power. We may redeem the rights at the option of our board
of directors for $0.01 per right at any time prior to the earlier of the
expiration of the rights or on the date that a person or persons acquire 15% of
our voting power.
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Our board of directors may amend the rights at any time without stockholder
approval. The Rights will expire by their terms on October 31, 2008.
Some Important Charter and Statutory Provisions. Our Certificate of
Incorporation provides for the division of our board of directors into 3
classes of directors, each serving staggered, 3-year terms. Our Certificate of
Incorporation further provides generally that any alteration, amendment or
repeal of the following sections of our Certificate of Incorporation requires
the approval of the holders of at least 80% of our outstanding voting power,
unless such action is approved by a majority of our board of directors:
(a) the election and classification of the board of directors;
(b) liability of directors; and
(c) the vote requirements for amendments to our Certificate of
Incorporation.
If any of these changes to our Certificate of Incorporation are approved by our
Board of Directors, the approval of a majority of our outstanding voting power
is required to make these changes effective.
These provisions may have the effect of deterring hostile takeovers or
delaying changes in our control or our management.
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. In general, the statute prohibits a publicly held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless:
(1) prior to that date, the board of directors approved either the
business combination or the transaction that resulted in the stockholder
becoming an interested stockholder;
(2) when the transaction that resulted in such person becoming an
interested stockholder is completed, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time
the transaction began, excluding, for purposes of determining the number of
shares outstanding, shares owned by certain directors or certain employee
stock plans; or
(3) on or after the date the stockholder became an interested
stockholder, the business combination is approved by the board of directors
and authorized by the affirmative vote, and not by the written consent, of
at least two-thirds of the outstanding voting stock, excluding the stock
owned by the interested stockholder.
A "business combination" includes a merger, asset sale, or other transaction
resulting in a financial benefit to the interested stockholder. An "interested
stockholder" is a person who, other than the corporation and any direct or
indirect majority-owned subsidiary of the corporation, together with affiliates
and associates, owns or, as an affiliate or associate, within three years
prior, did own, 15% or more of the corporation's outstanding voting stock.
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<PAGE>
Description of Warrants
General. We may issue warrants to purchase our debt or equity securities. We
may issue warrants independently or together with any offered securities and
may be attached to or separate from those offered securities. We will issue the
warrants under warrant agreements to be entered into between us and a bank or
trust company, as warrant agent, all as described in the applicable prospectus
supplement. The warrant agent will act solely as our agent in connection with
the warrants of the series being offered and will not assume any obligation or
relationship of agency or trust for or with any holders or beneficial owners of
warrants.
The applicable prospectus supplement will describe the following terms,
where applicable, of warrants in respect of which this prospectus is being
delivered:
. the title of the warrants;
. the designation, amount and terms of the securities for which the
warrants are exercisable;
. the designation and terms of the other securities, if any, with which the
warrants are to be issued and the number of warrants issued with each
such security;
. the price or prices at which the warrants will be issued;
. the aggregate number of warrants;
. any provisions for adjustment of the number or amount of securities
receivable upon exercise of the warrants or the exercise price of the
warrants;
. the price or prices at which the securities purchasable upon exercise of
the warrants may be purchased;
. if applicable, the date on and after which the warrants and the
securities purchasable upon exercise of the warrants will be separately
transferable;
. if applicable, a discussion of the material United States federal income
tax considerations applicable to the exercise of the warrants;
. any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants;
. the date on which the right to exercise the warrants shall commence, and
the date on which the right shall expire;
. the maximum or minimum number of warrants which may be exercised at any
time; and
. information with respect to book-entry procedures, if any.
Exercise of Warrants. Each warrant will entitle the holder of warrants to
purchase for cash the amount of debt or equity securities, at the exercise
price as shall be set forth in, or be determinable as set forth in, the
prospectus supplement relating to the warrants. Warrants may be exercised at
any time up to the close of business on the expiration date set forth in the
prospectus supplement relating to the warrants. After the close of business on
the expiration date, unexercised warrants will become void.
Warrants may be exercised as set forth in the prospectus supplement relating
to the warrants. When the warrant holder makes the payment and properly
completes and signs the warrant certificate at the corporate trust office of
the warrant agent or any other office indicated in the prospectus
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supplement, we will, as soon as possible, forward the debt or equity
securities which the warrant holder has purchased. If the warrant holder
exercises the warrant for less than all of the warrants represented by the
warrant certificates, we will issue a new warrant certificate for the
remaining warrants.
Plan of Distribution
Offerings by Northrop Grumman. We may sell any series of debt or equity
securities:
. through underwriters or dealers;
. through agents;
. directly to one or more purchasers; or
. directly to stockholders.
We may effect the distribution of the debt or equity securities from time
to time in one or more transactions either:
. at a fixed price or prices which may be changed;
. at market prices prevailing at the time of sale;
. at prices relating to such prevailing market prices; or
. at negotiated prices.
For each offering of debt or equity securities, the prospectus supplement
will describe the plan of distribution.
If we use underwriters in the sale, they will buy the debt or equity
securities for their own account. The underwriters may then resell the debt or
equity securities in one or more transactions at a fixed public offering price
or at varying prices determined at the time of sale or after the sale. The
obligations of the underwriters to purchase the debt or equity securities will
be subject to certain conditions. The underwriters will be obligated to
purchase all the debt or equity securities offered if they purchase any debt
or equity securities. Any initial public offering price and any discounts or
concessions allowed or re-allowed or paid to dealers may be changed from time
to time.
If we use dealers in the sale, we will sell debt or equity securities to
such dealers as principals. The dealers may then resell the debt or equity
securities to the public at varying prices to be determined by these dealers
at the time of resale. If we use agents in the sale, they will use their
reasonable best efforts to solicit purchasers for the period of their
appointment. If we sell directly, no underwriters or agents would be involved.
We are not making an offer of debt securities in any state that does not
permit such an offer.
Underwriters, dealers and agents that participate in the debt or equity
securities distribution may be deemed to be underwriters as defined in the
Securities Act of 1933. Any discounts, commissions, or profit they receive
when they resell the debt securities may be treated as underwriting discounts
and commissions under that Act. We may have agreements with underwriters,
dealers and agents to indemnify them against certain civil liabilities,
including certain liabilities under the Securities Act of 1933, or to
contribute with respect to payments that they may be required to make.
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We may authorize underwriters, dealers or agents to solicit offers from
certain institutions whereby the institution contractually agrees to purchase
the debt or equity securities from us on a future date at a specified price.
This type of contract may be made only with institutions that we specifically
approve. Such institutions could include banks, insurance companies, pension
funds, investment companies and educational and charitable institutions. The
underwriters, dealers or agents will not be responsible for the validity or
performance of these contracts.
Underwriters, dealers and agents may be our customers or may engage in
transactions with us or perform services for us in the ordinary course of
business.
Offerings by Selling Stockholders. Certain of our stockholders may also sell
securities from time to time under this prospectus. We will not receive any
proceeds from the sales of our securities by selling stockholders. We will pay
all expenses in connection with the preparation of this prospectus and any
prospectus supplement.
The selling stockholders may offer our securities directly or through
pledgees, donees, transferees or other successors in interest. Our securities
may be disposed of from time to time by selling stockholders in one or more
transactions through any one of the following:
. the purchasers directly;
. in ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
. on any stock exchange on which the securities may be listed at the time
of sale, including the New York Stock Exchange;
. through underwriters or dealers who may receive compensation in the form
of underwriting discounts, concessions or commissions from the selling
stockholders or such successors in interest and/or from the purchasers of
the securities for whom they may act as agent;
. the writing of options on the securities;
. the pledge of the securities as security for any loan or obligations,
including pledges to brokers or dealers who may, from time to time,
themselves distribute the securities or interests in the securities;
. purchases by a broker or dealer as principal and resale by such broker or
dealer for its own account;
. a block trade in which the broker or dealer so engaged will attempt to
sell the securities as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
. privately negotiated transactions;
. short sales; or
. a combination of the any of the above transactions.
The selling stockholders may offer their shares at any of the following
prices:
. fixed prices which may be changed;
. market prices prevailing at the time of sale;
. prices related to such prevailing market prices; or
. at negotiated prices.
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The prospectus supplement will disclose the specific shares to be sold, the
names of the selling stockholders, the prices of the shares to be sold, the
names of any broker or dealer which the selling stockholders employ and any
applicable commission or discount with respect to a particular offer.
In their selling activities, selling stockholders will be subject to
applicable provisions of the Securities Exchange Act of 1934, as amended, and
that Act's rules and regulations, including Regulation M, which may limit the
selling stockholders' timing of purchases and sales of our securities.
The selling stockholders and any broker-dealers that act in connection with
the sale of our securities under this prospectus might be considered
"underwriters" as understood under Section 2(11) of the Securities Act of 1933.
Any commissions received by them and any profit on the resale of shares as
principal might be deemed to be underwriting discounts and commissions under
the Securities Act of 1933. Any of these commissions, as well as other expenses
incurred by the selling stockholders and applicable transfer taxes, are payable
by the selling stockholders.
Validity of the Debt and Equity Securities
Sheppard, Mullin, Richter & Hampton LLP, Los Angeles, California, will issue
an opinion about the legality of the debt and equity securities for us.
Underwriters, dealers or agents, who we will identify in a prospectus
supplement, may have their counsel opine about certain legal matters relating
to the debt and equity securities.
Experts
The consolidated financial statements and related financial statement
schedule incorporated in this prospectus by reference from Northrop Grumman's
Annual Report on Form 10-K for the year ended December 31, 1998, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference and has been so incorporated
in reliance upon the report of such firm, given upon their authority as experts
in accounting and auditing.
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You should rely only on the information incorporated by reference or
provided in the prospectus or a prospectus supplement. Northrop Grumman has
not authorized anyone else to provide you with different information. Neither
Northrop Grumman, nor any other person on behalf of Northrop Grumman, is
making an offer to sell or soliciting an offer to buy any of the securities
described in this prospectus or in a prospectus supplement in any state where
the offer is not permitted by law. You should not assume that the information
in this prospectus or a prospectus supplement is accurate as of any date other
than the date on the front of the documents. There may have been changes in
the affairs of Northrop Grumman since the date of the prospectus or a
prospectus supplement.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
About This Prospectus...................................................... 2
Where You Can Find More Information........................................ 2
Forward-Looking Statements................................................. 3
Northrop Grumman Corporation............................................... 4
Use of Proceeds............................................................ 5
Ratio of Earnings to Fixed Charges......................................... 5
Description of Debt Securities............................................. 5
Description of Preferred Stock............................................. 11
Description of Common Stock................................................ 14
Description of Warrants.................................................... 16
Plan of Distribution....................................................... 17
Validity of the Debt and Equity Securities................................. 19
Experts.................................................................... 19
</TABLE>
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Northrop Grumman Corporation
Debt Securities
Preferred Stock
Common Stock
Warrants to Purchase Debt Securities
Warrants to Purchase Equity Securities
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PROSPECTUS
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, 1999
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses, other than underwriting
discounts and commissions, expected to be incurred in connection with the
offering or offerings described in this registration statement. All amounts are
estimated except the Securities and Exchange Commission registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.............. $417,000
Trustee fees and expenses........................................
Legal fees and expenses..........................................
Accounting fees and expenses.....................................
Printing and engraving fees and expenses.........................
Rating agency fees...............................................
Blue Sky fees and expenses (including legal fees)................
Miscellaneous ...................................................
---------
Total.......................................................... $
=========
</TABLE>
Item 15. Indemnification of Directors and Officers.
The Delaware General Corporation Law (the "DGCL") authorizes corporations to
limit or eliminate the personal liability of directors to the corporation and
its stockholders for monetary damages in connection with the breach of a
director's fiduciary duty of care. The duty of care requires that, when acting
on behalf of the corporation, directors must exercise an informed business
judgment based on all material information reasonably available to them. Absent
the limitation authorized by the DGCL, directors could be accountable to
corporations and their stockholders for monetary damages for conduct that does
not satisfy such duty of care. Although the DGCL does not change a director's
duty of care, it enables corporations to limit available relief to equitable
remedies such as injunction or rescission. The Registrant's certificate of
incorporation limits the liability of directors to the Registrant or its
stockholders to the fullest extent permitted by the DGCL as in effect from time
to time. Specifically, directors of the Registrant will not be personally
liable for monetary damages for breach of a fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to
the Registrant or to its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the DGCL or (iv) for any transaction from which the
director derives any improper personal benefit.
The bylaws of the Registrant provide that the Registrant shall indemnify its
officers, directors and employees to the fullest extent permitted by the DGCL.
The Registrant believes that indemnification under its bylaws covers at least
negligence and gross negligence on the part of the indemnified parties.
The Registrant has entered into an agreement with each of its directors and
certain of its officers indemnifying them to the fullest extent permitted by
the foregoing. The Registrant has also purchased director and officer liability
insurance.
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Item 16. Exhibits
<TABLE>
<C> <S>
1-1 Form of Underwriting Agreement relating to common equity securities.
1-2 Form of Underwriting Agreement relating to preferred equity securities.
1-3 Form of Underwriting Agreement relating to debt securities.
4-1 Certificate of Incorporation, as amended (incorporated by reference to
Form S-3 Registration Statement filed August 18, 1994).
4-2 Bylaws, as amended and restated December 16, 1998 (incorporated by
reference to Form 10-K filed March 23, 1999).
4-3 Rights Plan (incorporated by reference to Form 8-A filed November 13,
1998).
4-4 Form of Senior Indenture (incorporated by reference to Amendment No. 1
to Form S-3 Registration Statement filed September 20, 1994).
4-5 Form of Subordinated Indenture (incorporated by reference to Form S-3
Registration Statement filed August 18, 1994).
4-6 Form of Warrant Agreement for Debt Securities (incorporated by
reference to Form S-3 Registration Statement filed August 18, 1994).
4-7 Form of Warrant Agreement for Equity Securities (incorporated by
reference to Form S-3 Registration Statement filed August 18, 1994).
4-8 Form of Certificate for Common Stock.
4-9 Form of Certificate of Designations of Preferred Stock (incorporated by
reference to Form S-3 Registration Statement filed August 18, 1994).
5-1 Opinion of Sheppard, Mullin, Richter & Hampton LLP.
12-1 Computation of Ratio of Earnings to Fixed Charges.
23-1 Consent of Deloitte & Touche LLP, independent auditors.
23-2 Consent of Sheppard, Mullin, Richter & Hampton LLP (included in Exhibit
5-1).
24-1 Powers of Attorney.
25-1 Form T-1 Statement of Eligibility and Qualification of Trustee under
the Trust Indenture Act of 1939.
</TABLE>
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(a) to file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any fact or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
II-2
<PAGE>
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in the registration statement;
provided, however, that the undertakings set forth in the paragraphs (i) and
(ii) above do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this registration
statement.
(b) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(d) that, if the registrant is a foreign private issuer, to file a post-
effective amendment to the Registration Statement to include any financial
statements required by Rule 3-19 at the start of any delayed offering or
throughout a continuous offering. Financial statements and information
otherwise required by Section 10(a) (3) of the Act need not be furnished,
provided, that the registrant includes in the prospectus, by means of a post-
effective statement, financial statements required pursuant to this paragraph
(a) (d) and other information necessary to ensure that all other information in
the prospectus is at least as current as the date of those financial
statements. Notwithstanding the foregoing, with respect to registration
statements on Form F-3, a post-effective amendment need not be filed to include
financial statements and information required by Section 10(a) (3) of the Act
or Rule 3-19 if such financial statements and information are contained in
periodic reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Form F-3.
(e) that, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(f) that, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in such Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in such Act and will be governed by the final adjudication of such
issue.
II-3
<PAGE>
(g) that, for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (a) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(h) that, for purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(i) to file an application for the purposes of determining the eligibility
of the trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act in accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of such Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on this 10th day
of May, 1999.
NORTHROP GRUMMAN CORPORATION
/s/ John H. Mullan
By: _________________________________
John H. Mullan
Corporate Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in their
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<C> <S> <C>
/s/ Kent Kresa Chairman of the Board, President May 10, 1999
______________________________________ and Chief Executive Officer and
Kent Kresa* Director (Principal Executive
Officer)
/s/ Richard B. Waugh, Jr. Corporate Vice President and May 10, 1999
______________________________________ Chief Financial Officer
Richard B. Waugh, Jr. (Principal Financial Officer)
/s/ Nelson F. Gibbs Corporate Vice President and May 10, 1999
______________________________________ Controller (Principal Accounting
Nelson F. Gibbs Officer)
/s/ Jack R. Borsting Director May 10, 1999
______________________________________
Jack R. Borsting*
/s/ John T. Chain, Jr. Director May 10, 1999
______________________________________
John T. Chain, Jr.*
/s/ Jack Edwards Director May 10, 1999
______________________________________
Jack Edwards*
/s/ Phillip Frost Director May 10, 1999
______________________________________
Phillip Frost*
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<C> <S> <C>
/s/ Robert A. Lutz Director May 10, 1999
______________________________________
Robert A. Lutz*
/s/ Aulana L. Peters Director May 10, 1999
______________________________________
Aulana L. Peters*
/s/ John E. Robson Director May 10, 1999
______________________________________
John E. Robson*
/s/ Richard M. Rosenberg Director May 10, 1999
______________________________________
Richard M. Rosenberg*
/s/ John Brooks Slaughter Director May 10, 1999
______________________________________
John Brooks Slaughter*
/s/ Richard J. Stegemeier Director May 10, 1999
______________________________________
Richard J. Stegemeier*
</TABLE>
- --------
* By authority of powers of attorney filed with this registration statement.
S-2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description Page
------- ----------- ----
<C> <S> <C>
1-1 Form of Underwriting Agreement relating to common equity
securities.
1-2 Form of Underwriting Agreement relating to preferred equity
securities.
1-3 Form of Underwriting Agreement relating to debt securities.
4-1 Certificate of Incorporation, as amended (incorporated by
reference to Form S-3 Registration Statement filed August 18,
1994).
4-2 Bylaws, as amended and restated December 16, 1998 (incorporated
by reference to Form 10-K filed March 23, 1999).
4-3 Rights Plan (incorporated by reference to Form 8-A filed
November 13, 1998).
4-4 Form of Senior Indenture (incorporated by reference to
Amendment No. 1 to Form S-3 Registration Statement filed
September 20, 1994).
4-5 Form of Subordinated Indenture (incorporated by reference to
Form S-3 Registration Statement filed August 18, 1994).
4-6 Form of Warrant Agreement for Debt Securities (incorporated by
reference to Form S-3 Registration Statement filed August 18,
1994).
4-7 Form of Warrant Agreement for Equity Securities (incorporated
by reference to Form S-3 Registration Statement filed August
18, 1994).
4-8 Form of Certificate for Common Stock.
4-9 Form of Certificate of Designations of Preferred Stock
(incorporated by reference to Form S-3 Registration Statement
filed August 18, 1994).
5-1 Opinion of Sheppard, Mullin, Richter & Hampton LLP.
12-1 Computation of Ratio of Earnings to Fixed Charges.
23-1 Consent of Deloitte & Touche LLP, independent auditors.
23-2 Consent of Sheppard, Mullin, Richter & Hampton LLP (included in
Exhibit 5-1).
24-1 Powers of Attorney.
25-1 Form T-1 Statement of Eligibility and Qualification of Trustee
under the Trust Indenture Act of 1939.
</TABLE>
<PAGE>
EXHIBIT 1-1
NORTHROP GRUMMAN CORPORATION
COMMON STOCK
[WARRANTS TO PURCHASE COMMON STOCK]
UNDERWRITING AGREEMENT
1. INTRODUCTORY. Northrop Grumman Corporation, a Delaware
corporation ("Company"), proposes to issue and sell from time to time [warrants
("Warrants") to purchase] shares of its ________________ ("Common Stock")
(including any [Warrants] [shares of Common Stock] issued and sold pursuant to
the terms of any over allotment option, if any) registered under the
registration statement referred to in Section 2(a) ("Registered Securities").
Particular offerings of the Registered Securities will be sold pursuant to a
Terms Agreement referred to in Section 3, for resale in accordance with terms of
offering determined at the time of sale.
The Registered Securities involved in any such offering are
hereinafter referred to as the "Securities". The firm or firms which agree to
purchase the Securities are hereinafter referred to as the "Underwriters" of
such Securities, and the representative or representatives of the Underwriters,
if any, specified in a Terms Agreement referred to in Section 3 are hereinafter
referred to as the "Representatives"; provided, however, that if the Terms
Agreement does not specify any representative of the Underwriters, the term
"Representatives", as used in this Agreement (other than in Sections 2(b), 5(c)
and 6 and the second sentence of Section 3), shall mean the Underwriters.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 333-_____), including a
prospectus, relating to the Registered Securities has been filed with the
Securities and Exchange Commission ("Commission") and has become effective;
no order preventing or suspending the use of such Prospectus has been
issued by the Commission and no proceeding for that purpose has been
threatened or initiated by the Commission. Such registration statement, as
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<PAGE>
amended at the time of any Terms Agreement referred to in Section 3, is
hereinafter referred to as the "Registration Statement," and the prospectus
included in such Registration Statement, as supplemented as contemplated by
Section 3 to reflect the terms of the Securities and the terms of offering
thereof, as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the Securities Act of 1933, as
amended (the "Act"), including all material filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference therein, is hereinafter referred to as the
"Prospectus."
(b) On the effective date of the registration statement relating
to the Registered Securities, such registration statement conformed in all
respects to the requirements of the Act and the rules and regulations of
the Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and on the date of each Terms Agreement referred to in Section
3, the Registration Statement and the Prospectus will conform in all
respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents will include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, except that the
foregoing does not apply to statements in or omissions from any of such
documents based upon written information furnished to the Company by any
Underwriter through the Representatives, if any, specifically for use
therein.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case
may be, conformed in all material respects to the requirements of the Act
and the Exchange Act, as applicable, and the Rules and Regulations, and
none of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein not
necessary to make the statements therein not misleading.
(d) Each of the Company and its significant subsidiaries listed
on Schedule A hereto (each, a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
organization and has the requisite corporate power and authority to carry
on its business as currently being conducted, to own, lease and operate its
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction where the
operation, ownership or leasing of
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<PAGE>
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not, singly or in the aggregate,
have a material adverse effect on the properties, business, results of
operations, condition (financial or otherwise), affairs or prospects of the
Company and the Subsidiaries, taken as a whole (a "Material Adverse
Effect").
(e) All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and non-
assessable, are not subject to any preemptive rights and conform to the
description thereof contained in the Prospectus. All of the issued and
outstanding shares of capital stock of, or other ownership interest in,
each Subsidiary have been duly and validly authorized and issued and are
fully paid and non-assessable and not subject to any preemptive rights, and
all of the shares of capital stock of, or other ownership interests in,
each Subsidiary are owned, directly or through Subsidiaries, by the
Company. Except as set forth in the Prospectus, all such shares of capital
stock are owned free and clear of any security interest, mortgage, pledge,
claim, lien or encumbrance (each, a "Lien"). There are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments or sale or Liens related to or entitling any person to purchase
or otherwise to acquire any shares of the capital stock of, or other
ownership interest in, any Subsidiary.
(f) [The Securities have been duly authorized and validly issued,
are fully paid and nonassessable and free of preemptive rights;] [Upon the
exercise of the Securities and the payment of the exercise price contained
therein, the Common Stock to be issued upon such exercise will be duly
authorized, validly issued, fully paid and non-assessable and free of any
preemptive rights;] the Securities conform to the description thereof
contained in the Prospectus; the stockholders of the Company have no
preemptive rights with respect to the Securities; and the Securities when
so issued, delivered and sold, will conform, to the description thereof
contained in the Prospectus.
(g) The Warrant Agreement by and between the Company and
______________________, as warrant agent (the "Warrant Agreement"), has
been duly authorized and validly executed and delivered by the Company and
constitutes a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms.]
(h) Each of the firms of accountants that has certified or shall
certify the applicable consolidated financial statements and supporting
schedules of the Company, filed or to be filed with the Commission as part
of the Registration Statement and the Prospectus or incorporated by
reference
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<PAGE>
therein are independent public accountants with respect to the Company and
the Subsidiaries, as required by the Act. The consolidated historical and
PRO FORMA financial statements, together with related schedules and notes,
set forth in the Prospectus and the Registration Statement or incorporated
by reference therein comply as to form in all material respects with the
requirements of the Act. Such historical financial statements fairly
present the consolidated financial position of the Company and the
Subsidiaries at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated, in
accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout such periods. Such PRO FORMA financial
statements have been prepared on the basis consistent with such historical
statements, except for the PRO FORMA adjustments specified therein, and
give effect to assumptions made on a reasonable basis and present fairly
the historical and proposed transactions contemplated by the Prospectus and
this Agreement. The other financial and statistical information and data
included in the Prospectus and in the Registration Statement, historical
and PRO FORMA, are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books
and records of the Company.
(i) No holder of any security of the Company has or will have any
right to require the registration of such security by virtue of any
transaction contemplated by this Agreement [or the Warrant Agreement].
(j) The Company has not (i) taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities or (ii) since the initial filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Securities or (B) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
3. PURCHASE AND OFFERING OF SECURITIES. The obligation of the
Underwriters to purchase the Securities will be evidenced by an exchange of
telegraphic or other written communications ("Terms Agreement") at the time the
Company determines to sell the Securities. The Terms Agreement will incorporate
by reference the provisions of this Agreement, except as otherwise provided
therein, and will specify the firm or firms which will be Underwriters, the
names of any Representatives, the number of shares to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters, the amount of
the over allotment option, if any, and the terms of the Securities not already
specified,
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<PAGE>
including, but not limited to dividends. The Terms Agreement will also specify
the time and date of delivery and payment (such time and date, or such other
time not later than seven full business days thereafter as the Representatives
and the Company agree as the time for payment and delivery, being herein and in
the Terms Agreement referred to as the "Closing Date"), the place of delivery
and payment and any details of the terms of offering that should be reflected in
the prospectus supplement relating to the offering of the Securities. The
obligations of the Underwriters to purchase the Securities will be several and
not joint. It is understood that the Underwriters propose to offer the
Securities for sale as set forth in the Prospectus. The Securities delivered to
the Underwriters on the Closing Date will be in definitive, fully registered
form, in such denominations and registered in such names as the Underwriters may
request.
4. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters that it will furnish to _____________, counsel for the
Underwriters, one signed copy of the registration statement relating to the
Registered Securities, including all exhibits, in the form it became effective
and of all amendments thereto and that, in connection with each offering of
Securities:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable and if
consented to by the Representatives, subparagraph (5)) not later than the
second business day following the execution and delivery of the Terms
Agreement.
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will
also advise the Representatives promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the Prospectus to comply with the Act, the Company promptly
will prepare and file with the Commission an amendment or supplement which
will correct such statement or
-5-
<PAGE>
omission or an amendment which will effect such compliance. Neither the
Representatives' consent to, nor the Underwriters' delivery of, any such
amendment or supplement shall constitute a waiver of any of the conditions
set forth in Section 5.
(d) As soon as practicable following the issuance and sale of any
of the Registered Securities, the Company will make generally available to
its security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will comply with the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related Prospectus, any
related preliminary prospectus supplement, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as are reasonably requested.
(f) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Representatives designate and will continue such qualifications in effect
so long as required for the distribution.
(g) During the period of 5 years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year a copy of its annual report to
stockholders for such year, and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission under
the Exchange Act or mailed to stockholders, and (ii) from time to time,
such other information concerning the Company as the Representatives may
reasonably request.
(h) The Company will pay all expenses incident to the performance
of its obligations under this Agreement and will reimburse the Underwriters
for any expenses (including fees and disbursements of counsel) incurred by
them in connection with qualification of the Registered Securities for sale
and determination of their eligibility for investment under the laws of
such jurisdictions as the Representatives may designate pursuant to Section
4(f) hereof and the printing of memoranda relating thereto, for any fees
charged by investment rating agencies for the rating of the Securities, for
fees charged by the National Association of Securities Dealers, Inc. and
for expenses incurred in distributing the Prospectus, any preliminary
prospectuses and any preliminary
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<PAGE>
prospectus supplements to Underwriters. It is understood, however, that,
except as provided in this Section, Section 6 and Section 8 hereof, the
Underwriters will pay all of their own costs and expenses, including the
fees of their counsel, transfer taxes on resale of any of the Securities by
them, and any advertising expenses connected with any offers they may make.
(i) For a period beginning at the time of execution of the Terms
Agreement and ending 90 days after the Closing Date, without the prior
consent of the Representatives, the Company will not offer, sell, contract
to sell or otherwise dispose of any shares of capital stock of the Company.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Securities
will be subject to the accuracy of the representations and warranties on the
part of the Company herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of ________________________ confirming that they are independent
public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating in effect that:
(i) in their opinion, the consolidated financial
statements and schedules examined by them and incorporated by
reference in the Registration Statement relating to the Registered
Securities, as amended at the date of such letter, comply in form in
all material respects with the applicable accounting requirements of
the Act and the related published Rules and Regulations;
(ii) they have performed procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement on Auditing
Standards No. 71, "Interim Financial Information" on the unaudited
condensed consolidated financial statements incorporated by reference
in the Registration Statement;
(iii) on the basis of the procedures referred to in (ii)
above, and inquiries of officials of the Company who have
responsibility for financial and accounting matters, nothing came to
their attention that caused them to believe that: any modifications
should be made to the
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<PAGE>
unaudited condensed consolidated financial statements incorporated by
reference in the Registration Statement for them to be in conformity
with generally accepted accounting principles, and such unaudited
condensed financial statements incorporated by reference in the
Registration Statement do not comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(iv) on the basis of reading the unaudited pro forma
condensed consolidated statement of earnings for the year ended
December 31, 1998 and the three months ended March 31, 1999,
incorporated by reference in the Registration Statement, and inquiries
of certain officials of the Company who have responsibility for
financial and accounting matters, (x) nothing came to their attention
that caused them to believe that such unaudited pro forma condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X and (y) they have proven the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma condensed consolidated
financial statements; and
(v) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information, including the ratio of earnings to fixed charges,
contained in such prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
Subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into such prospectus shall be deemed included in such prospectus
for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for
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<PAGE>
that purpose shall have been instituted or, to the knowledge of the Company
or any Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or its Subsidiaries which, in the judgment of a majority in
interest of the Underwriters, including any Representatives, materially
impairs the investment quality of the Securities or the Registered
Securities; (ii) any downgrading in the rating of any debt securities or
preferred stock of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), or any public announce ment that any such organization has under
surveillance or review its rating of any debt securities or preferred stock
of the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters, including
any Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Securities.
(d) The Representatives shall have received an opinion, dated the
Closing Date, of ________________________________________, counsel for the
Company, to the effect that:
(i) Each of the Company and its Subsidiaries has been duly
incorporated and is an existing corporation in good standing under the
laws of the State of its jurisdiction of incorporation, with corporate
power and authority to own its properties and conduct its business as
described in the Prospectus; and, to the best of such counsel's
knowledge, each of the Company and its Subsidiaries is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which it owns or leases substantial properties or in
which the conduct of its business requires such qualification, except
where the failure to qualify would not have a Material Adverse Effect;
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<PAGE>
(ii) The Company has authorized capitalization as set forth
in the Prospectus;
(iii) [The Securities have been duly authorized and validly
issued, are fully paid and nonassessable and free of preemptive
rights;] [Upon the exercise of the Securities and the payment of the
exercise price contained therein, the Common Stock to be issued upon
such exercise will be duly authorized, validly issued, fully paid and
non-assessable and free of any preemptive rights;] the Securities
conform to the description thereof contained in the Prospectus; and
the stockholders of the Company have no preemptive rights with respect
to the Securities;
(iv) To the best of such counsel's knowledge, after due
inquiry, no holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security
of the Company;
(v) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by the Terms
Agreement (including the provisions of this Agreement) [or the Warrant
Agreement] in connection with the issuance or sale of the Securities
by the Company, except such as have been obtained and made under the
Act and such as may be required under state securities laws;
(vi) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement) [and the
Warrant Agreement] and the issuance and sale of the Securities and
compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any Federal, California or Delaware
statute, any rule, regulation or order of any governmental agency or
body or any court having jurisdiction over the Company or any of its
properties or any material agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of
the properties of the Company is subject, or the charter or by-laws of
the Company, and the Company has full power and authority to
authorize, issue and sell the Securities as contemplated by the Terms
Agreement (including the provisions of this Agreement);
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<PAGE>
(vii) After due inquiry, such counsel does not know of any
legal or governmental proceeding pending or threatened to which the
Company or any of its Subsidiaries is a party or to which any of their
respective property is subject which is required to be described in
the Registration Statement or the Prospectus and is not so described;
(viii) The Registration Statement has become effective
under the Act, the Prospectus was filed with the Commission pursuant
to the subparagraph of Rule 424(b) specified in such opinion on the
date specified therein, and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and the Registration Statement and the
Prospectus (other than the financial statements and notes thereto and
supporting schedules and other financial and statistical information
contained therein as to which such counsel need express no opinion)
complied as to form in all material respects with the requirements of
the Act and the Rules and Regulations; and
(ix) The Terms Agreement (including the provisions of
this Agreement) have been duly authorized, executed and delivered by
the Company.
Such counsel shall also state that on the basis of their involvement
in the preparation of the Registration Statement and although they have not
verified the accuracy or completeness of the statements contained therein or in
any amendment thereto, nothing has come to the attention of such counsel which
causes them to believe that the Registration Statement or the Prospectus (other
than the financial statements and notes thereto and supporting schedules and
other financial and statistical information contained therein) contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading; and such counsel does not know of any contracts or documents of a
character required to be described in the Registration Statement or Prospectus
or to be filed as exhibits to the Registration Statement which are not described
and filed as required; it being understood that such counsel need express no
opinion as to the financial statements or other financial data contained in the
Registration Statement or the Prospectus.
In rendering such opinion, such counsel shall opine as to the effect
of the federal laws of the United States, the internal laws of the States of
California and New York and the General Corporation Laws of the State of
Delaware. As to matters
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involving application of the laws of the State of New York, to the extent
specified in such opinion, such counsel may rely on the opinion of other counsel
of good standing believed to be reliable and who are satisfactory to counsel for
the Underwriters.
(e) The Representatives shall have received an opinion, dated the
Closing Date, of __________________, to the effect that:
(i) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement) [and the
Warrant Agreement] and the issuance and sale of the Securities and
compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any Federal, California or Delaware
statute or any rule, regulation or order of any governmental agency or
body or any court having jurisdiction over the Company or any of its
properties or any material agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of
its properties is subject, or the charter or by laws of the Company,
and the Company has the power and authority to authorize, issue and
sell the Securities as contemplated by the Terms Agreement (including
the provisions of this Agreement); and
(ii) Such counsel does not know of any legal or
governmental proceeding pending or threatened to which the Company or
any of its Subsidiaries is a party or to which any of their respective
properties is subject which is required to be described in the
Registration Statement or the Prospectus and is not so described, or
of any contract or other document which is required to be described in
the Registration Statement or the Prospectus or is required to be
filed as an exhibit to the Registration Statement which is not
described or filed as required.
In rendering such opinion, such counsel shall opine as to the effect of the
federal laws of the United States, the internal laws of the State of
California and the General Corporation Laws of the State of Delaware.
(f) The Representatives shall have received from __________,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus and other related
matters as they may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
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(g) The Representatives shall have received a certificate, dated
the Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Company in this Agreement
[and the Warrant Agreement] are true and correct, that the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date, that no
stop order suspending the effectiveness of the Registration Statement or of
any part thereof has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission and that, subsequent
to the date of the most recent financial statements in the Prospectus,
there has been no material adverse change in the financial position or
results of operation of the Company and its Subsidiaries except as set
forth in or contemplated by the Prospectus or as described in such
certificate.
(h) The Representatives shall have received a letter dated the
Closing Date, of _______________________ which reconfirms the matters set
forth in their letter delivered pursuant to subsection (a) of this Section
and which states in effect that:
(i) in their opinion, the consolidated financial
statements and schedules examined by them and incorporated by
reference in the Registration Statement relating to the Registered
Securities, as amended at the date of such letter, comply in form in
all material respects with the applicable accounting requirements of
the Act and the related published Rules and Regulations;
(ii) they have performed procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement on Auditing
Standards No. 71, "Interim Financial Information" on the unaudited
condensed consolidated financial statements incorporated by reference
in the Registration Statement;
(iii) on the basis of the procedures referred to in (ii)
above, and inquiries of officials of the Company who have
responsibility for financial and accounting matters, nothing came to
their attention that caused them to believe that: any modifications
should be made to the unaudited condensed consolidated financial
statements incorporated by reference in the Registration Statement for
them to be in conformity with generally accepted accounting
principles, and such unaudited condensed
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financial statements incorporated by reference in the Registration
Statement do not comply in form in all material respects with the
applicable accounting requirements of the Act and the related
published Rules and Regulations;
(iv) on the basis of reading the unaudited pro forma
condensed consolidated statement of earnings for the year ended
December 31, 1998 and the three months ended March 31, 1999,
incorporated by reference in the Registration Statement, and inquiries
of certain officials of the Company who have responsibility for
financial and accounting matters, (x) nothing came to their attention
that caused them to believe that such unaudited pro forma condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X and (y) they have proven the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma condensed combined
financial statements;
(v) on the basis of the review referred to in (ii) above,
a reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements, if any,
included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section do not
comply in form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included
in the Prospectus;
(B) the unaudited capsule information, if any, included
in the Prospectus does not agree with the amounts set forth in
the unaudited consolidated financial statements from which it was
derived or was not determined on a basis substantially consistent
with that of the audited financial statements included in the
Prospectus;
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(C) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date not
more than five days prior to the Closing Date, there was any
change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and consolidated
Subsidiaries or, at the date of the latest available balance
sheet read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared with
amounts shown on the latest balance sheet included in the
Prospectus; or
(D) for the period from the date of the latest income
statement included in the Prospectus to the closing date of the
latest available income statement read by such accountants there
were any decreases, as compared with the corresponding period of
the previous year and with the period of corresponding length
ended the date of the latest income statement included in the
Prospectus, in consolidated net sales, net operating income,
income before extraordinary items or net income or in the ratio
of earnings to fixed charges;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vi) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section (in each case to
the extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company and its Subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such records
by analysis or computation) with the results obtained from inquiries,
a reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for the purposes of this subsection.
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The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as they reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus or preliminary prospectus supplement, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein.
(b) Each Underwriter will, severally and not jointly, indemnify
and hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through the Representatives, if any, specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred
by the Company in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred.
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(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under subsection (a) or (b) above, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under subsection (a) or (b) above. In
case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. In any such
action, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such action (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any action or
related actions in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all such indemnified parties and that all such fees and expenses shall
be reimbursed as they are incurred. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement
of any pending or threatened action in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses,
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claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on
the other from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of
this subsection (d). Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are several
in proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the
Company, to each officer of
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the Company who has signed the Registration Statement and to each person,
if any, who controls the Company within the meaning of the Act.
7. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters
default in their obligations to purchase Securities under the Terms Agreement
and the number of shares of the Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
number of shares of the Securities, the Representatives may make arrangements
satisfactory to the Company for the purchase of such Securities by other
persons, including any of the Underwriters, but if no such arrangements are made
by the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments under this Agreement
and the Terms Agreement, to purchase the Securities that such defaulting
Underwriters agreed but failed to purchase. If any Underwriter or Underwriters
so default and the number of shares of the Securities with respect to which such
default or defaults occur exceeds 10% of the total number of shares of the
Securities and arrangements satisfactory to the Representatives and the Company
for the purchase of such Securities by other persons are not made within 36
hours after such default, such Terms Agreement will terminate without liability
on the part of any nondefaulting Underwriter or the Company, except as provided
in Section 8. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section.
The foregoing obligations and agreements set forth in this Section
will not apply if the Terms Agreement specifies that such obligations and
agreements will not apply.
8. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the Company or any of their respective
representatives, officers or directors or any controlling person and will
survive delivery of and payment for the Securities. If the Terms Agreement is
terminated pursuant to Section 7 or if for any reason the purchase of the
Securities by the Underwriters under the Terms Agreement is not consummated, the
Company shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 4 and the respective obligations of the Company and the
Underwriters pursuant to Section 6 shall remain in effect. If the purchase of
the Securities by the Underwriters is not consummated for any reason other than
solely because of the termination of this Agreement pursuant to Section 7 or the
occurrence of any event specified in clause (iii), (iv) or (v) of Section 5(c),
the Company will reimburse the Underwriters for all out-of-pocket
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expenses (including fees and disbursements of counsel) reasonably incurred by
them in connection with the offering of the Securities.
9. NOTICES. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to them at their addresses furnished to the Company in writing for the purpose
of communications hereunder or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at Northrop Grumman Corporation,
1840 Century Park East, Los Angeles, California 90067, Attention:
_________________.
10. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the Company and such Underwriters as are identified in Terms
Agreements and their respective successors and the officers and directors and
controlling persons referred to in Section 6, and no other person will have any
right or obligation hereunder.
11. APPLICABLE LAW. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
NORTHROP GRUMMAN CORPORATION
By ____________________________
Name:
Title:
[INSERT NAMES(S) OF UNDERWRITERS AND
OTHER REPRESENTATIVES OR UNDERWRITERS]
[On behalf of--themselves--itself--and
as Representative[s] of the Several]
[As] Underwriter[s]
[By ___________________________]
By ______________________________
Name:
Title:
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SCHEDULE A
----------
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EXHIBIT 1-2
NORTHROP GRUMMAN CORPORATION
PREFERRED STOCK
[WARRANTS TO PURCHASE PREFERRED STOCK]
UNDERWRITING AGREEMENT
1. INTRODUCTORY. Northrop Grumman Corporation, a Delaware corporation
("Company"), proposes to issue and sell from time to time [warrants ("Warrants")
to purchase] shares of its preferred stock [(including any shares of preferred
stock issued and sold pursuant to the terms of any over allotment option, if
any)] registered under the registration statement referred to in Section 2(a)
("Registered Securities"). The Registered Securities may be issued in one or
more series, which series may vary as to dividend rates, redemption provisions,
selling prices and other terms, with all such terms for any particular series of
the Registered Securities being determined at the time of sale. Particular
series of the Registered Securities will be sold pursuant to a Terms Agreement
referred to in Section 3, for resale in accordance with terms of offering
determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Securities". The firm or firms which agree to purchase the
Securities are hereinafter referred to as the "Underwriters" of such Securities,
and the representative or representatives of the Underwriters, if any, specified
in a Terms Agreement referred to in Section 3 are hereinafter referred to as the
"Representatives"; provided, however, that if the Terms Agreement does not
specify any representative of the Underwriters, the term "Representatives", as
used in this Agreement (other than in Sections 2(b), 5(c) and 6 and the second
sentence of Section 3), shall mean the Underwriters.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 333-_____), including a
prospectus, relating to the Registered Securities has been filed with the
Securities and Exchange Commission ("Commission") and has become effective;
no order preventing or suspending the use of such Prospectus has been
issued by the Commission and no proceeding for that purpose has been
threatened or initiated by the Commission. Such registration statement, as
amended at the time of any Terms Agreement referred to in Section 3, is
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hereinafter referred to as the "Registration Statement", and the prospectus
included in such Registration Statement, as supplemented as contemplated by
Section 3 to reflect terms of the Securities and the terms of offering
thereof, as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the Securities Act of 1933, as
amended, (the "Act"), including all material filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference therein, is hereinafter referred to as the
"Prospectus".
(b) On the effective date of the registration statement relating
to the Registered Securities, such registration statement conformed in all
respects to the requirements of the Act and the rules and regulations of
the Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and on the date of each Terms Agreement referred to in Section
3, the Registration Statement and the Prospectus will conform in all
respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents will include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, except that the
foregoing does not apply to statements in or omissions from any of such
documents based upon written information furnished to the Company by any
Underwriter through the Representatives, if any, specifically for use
therein.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case
may be, conformed in all material respects to the requirements of the Act
and the Exchange Act, as applicable, and the Rules and Regulations, and
none of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
(d) Each of the Company and its significant subsidiaries listed
on Schedule A hereto (each, a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
organization and has the requisite corporate power and authority to carry
on its business as currently being conducted, to own, lease and operate its
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction where the
operation, ownership or leasing of property or the conduct of its business
requires such qualification, except where
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the failure to be so qualified would not, singly or in the aggregate, have
a material adverse effect on the properties, business, results of
operations, condition (financial or otherwise), affairs or prospects of the
Company and the Subsidiaries, taken as a whole (a "Material Adverse
Effect").
(e) All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and non-
assessable, are not subject to any preemptive rights and conform to the
description thereof contained in the Prospectus. All of the issued and
outstanding shares of capital stock of, or other ownership interest in,
each Subsidiary have been duly and validly authorized and issued and are
fully paid and non-assessable and not subject to any preemptive rights, and
all of the shares of capital stock of, or other ownership interests in,
each Subsidiary are owned, directly or through Subsidiaries, by the
Company. Except as set forth in the Prospectus, all such shares of capital
stock are owned free and clear of any security interest, mortgage, pledge,
claim, lien or encumbrance (each, a "Lien"). There are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments or sale or Liens related to or entitling any person to purchase
or otherwise to acquire any shares of the capital stock of, or other
ownership interest in, any Subsidiary.
(f) [The Securities have been duly authorized; the Securities
other than any Contract Securities have been validly issued and are fully
paid and nonassessable; any Contract Securities, when issued, delivered and
sold pursuant to Delayed Delivery Contracts, will be validly issued, fully
paid and nonassessable; and the Securities other than any Contract
Securities conform, and any Contract Securities, when so issued, delivered
and sold, will conform, to the description thereof contained in the
Prospectus.] [Upon the exercise of the Securities and the payment of the
exercise price contained therein the Preferred Stock to be issued upon such
exercise will be duly authorized, validly issued, fully paid and non-
assessable and free of any preemptive rights;] the Securities conform to
the description thereof contained in the Prospectus; and the stockholders
of the Company have no preemptive rights with respect to the Securities.
(g) [The Warrant Agreement by and between the Company and
__________________, as warrant agent (the "Warrant Agreement"), has been
duly authorized and validly executed and delivered by the Company and
constitutes a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms.]
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(h) Each of the firms of accountants that has certified or shall
certify the applicable consolidated financial statements and supporting
schedules of the Company filed or to be filed with the Commission as part
of the Registration Statement and the Prospectus or incorporated by
reference therein are independent public accountants with respect to the
Company and the Subsidiaries, as required by the Act. The consolidated
historical and PRO FORMA financial statements, together with related
schedules and notes, set forth in the Prospectus and the Registration
Statement or incorporated by reference therein comply as to form in all
material respects with the requirements of the Act. Such historical
financial statements fairly present the consolidated financial position of
the Company and the Subsidiaries at the respective dates indicated and the
results of their operations and their cash flows for the respective periods
indicated, in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout such periods. Such PRO FORMA
financial statements have been prepared on the basis consistent with such
historical statements, except for the PRO FORMA adjustments specified
therein, and give effect to assumptions made on a reasonable basis and
present fairly the historical and proposed transactions contemplated by the
Prospectus and this Agreement. The other financial and statistical
information and data included in the Prospectus and in the Registration
Statement, historical and PRO FORMA, are, in all material respects,
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Company.
(i) No holder of any security of the Company has or will have any
right to require the registration of such security by virtue of any
transaction contemplated by this Agreement [or the Warrant Agreement].
(j) The Company has not (i) taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities or (ii) since the initial filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Securities or (B) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
3. PURCHASE AND OFFERING OF SECURITIES. The obligation of the
Underwriters to purchase the Securities will be evidenced by an exchange of
telegraphic or other written communications ("Terms Agreement") at the time the
Company determines to sell the Securities. The Terms Agreement will incorporate
by reference the provisions of this Agreement, except as otherwise provided
therein, and
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<PAGE>
will specify the firm or firms which will be Underwriters, the names of any
Representatives, the number of shares to be purchased by each Underwriter, the
purchase price to be paid by the Underwriters, the amount of the over allotment
option, if any, and the terms of the Securities not already specified,
including, but not limited to dividends, any redemption provisions, any sinking
fund requirements, any conversion rights and provisions and whether any of the
Securities may be sold to institutional investors pursuant to Delayed Delivery
Contracts (as defined below). The Terms Agreement will also specify the time and
date of delivery and payment (such time and date, or such other time not later
than seven full business days thereafter as the Representatives and the Company
agree as the time for payment and delivery, being herein and in the Terms
Agreement referred to as the "Closing Date"), the place of delivery and payment
and any details of the terms of offering that should be reflected in the
prospectus supplement relating to the offering of the Securities. The
obligations of the Underwriters to purchase the Securities will be several and
not joint. It is understood that the Underwriters propose to offer the
Securities for sale as set forth in the Prospectus. The Securities delivered to
the Underwriters on the Closing Date will be in definitive, fully registered
form, in such denominations and registered in such names as the Underwriters may
request.
If the Terms Agreement provides for sales of Securities pursuant to delayed
delivery contracts, the Company authorizes the Underwriters to solicit offers to
purchase Securities pursuant to delayed delivery contracts substantially in the
form of Annex I attached hereto ("Delayed Delivery Contracts") with such changes
therein as the Company may authorize or approve. Delayed Delivery Contracts are
to be with institutional investors, including commercial and savings banks,
insurance companies, pension funds, investment companies and educational and
charitable institutions. On the Closing Date the Company will pay, as
compensation, to the Representatives for the accounts of the Underwriters, the
fee set forth in such Terms Agreement in respect of the number of shares of
Securities to be sold pursuant to Delayed Delivery Contracts ("Contract
Securities"). The Underwriters will not have any responsibility in respect of
the validity or the performance of Delayed Delivery Contracts. If the Company
executes and delivers Delayed Delivery Contracts, the Contract Securities will
be deducted from the Securities to be purchased by the several Underwriters and
the number of shares of Securities to be purchased by each Underwriter will be
reduced pro rata in proportion to the number of shares of Securities set forth
opposite each Underwriter's name in such Terms Agreement, except to the extent
that the Representatives determine that such reduction shall be otherwise than
pro rata and so advise the Company. The Company will advise the Representatives
not later than the business day prior to the Closing Date of the number of
shares of Contract Securities.
4. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters that it will furnish to _______________, counsel
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for the Underwriters, one signed copy of the registration statement relating to
the Registered Securities, including all exhibits, in the form it became
effective and of all amendments thereto and that, in connection with each
offering of Securities:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable and if
consented to by the Representatives, subparagraph (5)) not later than the
second business day following the execution and delivery of the Terms
Agreement.
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will
also advise the Representatives promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the Prospectus to comply with the Act, the Company promptly
will prepare and file with the Commission an amendment or supplement which
will correct such statement or omission or an amendment which will effect
such compliance. Neither the Representatives' consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5.
(d) As soon as practicable following the issuance and sale of any
of the Registered Securities, the Company will make generally available to
its security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will comply with the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related Prospectus, any
related preliminary prospectus supplement, the Prospectus and all
amendments
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and supplements to such documents, in each case as soon as available and in
such quantities as are reasonably requested.
(f) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Representatives designate and will continue such qualifications in effect
so long as required for the distribution.
(g) During the period of 5 years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year a copy of its annual report to
stockholders for such year, and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission under
the Exchange Act or mailed to stockholders, and (ii) from time to time,
such other information concerning the Company as the Representatives may
reasonably request.
(h) The Company will pay all expenses incident to the performance
of its obligations under this Agreement and will reimburse the Underwriters
for any expenses (including fees and disbursements of counsel) incurred by
them in connection with qualification of the Registered Securities for sale
and determination of their eligibility for investment under the laws of
such jurisdictions as the Representatives may designate pursuant to Section
4(f) hereof and the printing of memoranda relating thereto, for any fees
charged by investment rating agencies for the rating of the Securities, for
fees charged by the National Association of Securities Dealers, Inc. and
for expenses incurred in distributing the Prospectus, any preliminary
prospectuses and any preliminary prospectus supplements to the
Underwriters. It is understood, however, that, except as provided in this
Section, Section 6 and Section 8 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, transfer
taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
(i) For a period beginning at the time of execution of the Terms
Agreement and ending 90 days after the Closing Date, without the prior
consent of the Representatives, the Company will not offer, sell, contract
to sell or otherwise dispose of any shares of capital stock of the Company.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the several Underwriters to purchase and pay for the Securities will be subject
to the accuracy of the representations and warranties on the part of the
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Company herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of ________________________, respectively, confirming that they
are independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating in effect
that:
(i) in their opinion, the consolidated financial statements
and schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement on Auditing
Standards No. 71, "Interim Financial Information" on the unaudited
condensed consolidated financial statements incorporated by reference
in the Registration Statement;
(iii) on the basis of the procedures referred to in (ii)
above, and inquiries of officials of the Company who have
responsibility for financial and accounting matters, nothing came to
their attention that caused them to believe that: any modifications
should be made to the unaudited condensed consolidated financial
statements incorporated by reference in the Registration Statement for
them to be in conformity with generally accepted accounting
principles, and such unaudited condensed financial statements
incorporated by reference in the Registration Statement do not comply
in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(iv) on the basis of reading the unaudited pro forma
condensed consolidated statement of earnings for the year ended
December 31, 1998 and the three months ended March 31, 1999,
incorporated by reference in the Registration Statement, and inquiries
of certain officials of the Company who have responsibility for
financial and accounting matters, (x) nothing came to their attention
that caused
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<PAGE>
them to believe that such unaudited pro forma condensed consolidated
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of Rule 11-02 of
Regulation S-X and (y) they have proven the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
the unaudited pro forma condensed consolidated financial statements;
and
(v) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information, including the ratio of earnings to fixed charges,
contained in such prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
Subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into such prospectus shall be deemed included in such prospectus
for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or its Subsidiaries which, in the judgment of a majority in
interest of the Underwriters, including any Representatives, materially
impairs the investment quality of the Securities or the Registered
Securities; (ii) any downgrading in the rating of any debt securities or
preferred stock of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), or any public announce ment that any such organization has under
surveillance or review its rating of any debt securities or preferred stock
of the Company (other than an
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<PAGE>
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Company on
any exchange or in the over-the-counter market; (iv) any banking moratorium
declared by Federal or New York authorities; or (v) any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters, including any Representatives, the effect of
any such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and
payment for the Securities.
(d) The Representatives shall have received an opinion, dated the
Closing Date, of________________________________________, counsel for the
Company, to the effect that:
(i) Each of the Company and its Subsidiaries has been duly
incorporated and is an existing corporation in good standing under the
laws of the State of its jurisdiction of incorporation, with corporate
power and authority to own its properties and conduct its business as
described in the Prospectus; and, to the best of such counsel's
knowledge, each of the Company and its Subsidiaries is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which it owns or leases substantial properties or in
which the conduct of its business requires such qualification, except
where the failure to qualify would not have a Material Adverse Effect;
(ii) The Company has authorized capitalization as set forth
in the Prospectus;
(iii) To the best of such counsel's knowledge, after due
inquiry, no holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security
of the Company;
(iv) [The Securities have been duly authorized; the
Securities other than any Contract Securities have been validly issued
and are fully paid and nonassessable; any Contract Securities, when
issued, delivered and sold pursuant to Delayed Delivery Contracts,
will be validly issued, fully paid and nonassessable; and the
Securities other
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<PAGE>
than any Contract Securities conform, and any Contract Securities,
when so issued, delivered and sold, will conform, to the description
thereof contained in the Prospectus.] [Upon the exercise of the
Securities and the payment of the exercise price contained therein the
Preferred Stock to be issued upon such exercise will be duly
authorized, validly issued, fully paid and non-assessable and free of
any preemptive rights;] the Securities conform to the description
thereof contained in the Prospectus; and the stockholders of the
Company have no preemptive rights with respect to the Securities.
(v) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by the Terms
Agreement (including the provisions of this Agreement) [or the Warrant
Agreement] in connection with the issuance or sale of the Securities
by the Company, except such as have been obtained and made under the
Act and such as may be required under state securities laws;
(vi) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement) [, the Warrant
Agreement] and any Delayed Delivery Contracts and the issuance and
sale of the Securities and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any Federal,
California or Delaware statute or any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the
Company or any of its properties or any material agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the properties of the Company is subject, or
the charter or by-laws of the Company, and the Company has the power
and authority to authorize, issue and sell the Securities as
contemplated by the Terms Agreement (including the provisions of this
Agreement);
(vii) After due inquiry, such counsel does not know of any
legal or governmental proceeding pending or threatened to which the
Company or any of its Subsidiaries is a party or to which any of their
respective property is subject which is required to be described in
the Registration Statement or the Prospectus and is not so described;
(viii) The Registration Statement has become effective under
the Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
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<PAGE>
specified therein, and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated
under the Act, and the Registration Statement and the Prospectus
(other than the financial statements and notes thereto and supporting
schedules and other financial and statistical information contained
therein as to which such counsel need express no opinion) complied as
to form in all material respects with the requirements of the Act and
the Rules and Regulations; and
(ix) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
Such counsel shall also state that on the basis of their involvement in the
preparation of the Registration Statement and although they have not verified
the accuracy or completeness of the statements contained therein or in any
amendment thereto, nothing has come to the attention of such counsel which
causes them to believe that the Registration Statement or the Prospectus (other
than the financial statements and notes thereto and supporting schedules and
other financial and statistical information contained therein) contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading; and such counsel does not know of any contracts or documents of a
character required to be described in the Registration Statement or Prospectus
or to be filed as exhibits to the Registration Statement which are not described
and filed as required; it being understood that such counsel need express no
opinion as to the financial statements or other financial data contained in the
Registration Statement or the Prospectus.
In rendering such opinion, such counsel shall opine as to the effect of the
federal laws of the United States, the internal laws of the States of California
and New York and the General Corporation Laws of the State of Delaware. As to
matters involving application of the laws of the State of New York, to the
extent specified in such opinion, such counsel may rely on the opinion of other
counsel of good standing believed to be reliable and who are satisfactory to
counsel for the Underwriters.
(e) The Representatives shall have received an opinion, dated the
Closing Date, of ______________, to the effect that:
(i) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement) [, the
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Warrant Agreement] and any Delayed Delivery Contracts and the issuance
and sale of the Securities and compliance with the terms and
provisions thereof will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
Federal, California or Delaware statute or any rule, regulation or
order of any governmental agency or body or any court having
jurisdiction over the Company or any of its properties or any material
agreement or instrument to which the Company is a party or by which
the Company is bound or to which any of its properties is subject, or
the charter or by-laws of the Company, and the Company has the power
and authority to authorize, issue and sell the Securities as
contemplated by the Terms Agreement (including the provisions of this
Agreement); and
(ii) Such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company or any of its
Subsidiaries is a party or to which any of their respective properties
is subject which is required to be described in the Registration
Statement or the Prospectus and is not so described, or of any
contract or other document which is required to be described in the
Registration Statement or the Prospectus or is required to be filed as
an exhibit to the Registration Statement which is not described or
filed as required.
In rendering such opinion, such counsel shall opine as to the effect of the
federal laws of the United States, the internal laws of the State of
California and the General Corporation Laws of the State of Delaware.
(f) The Representatives shall have received from __________
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus and other related
matters as they may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(g) The Representatives shall have received a certificate, dated
the Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Company in this Agreement
[and the Warrant Agreement] are true and correct, that the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date, that no
stop order suspending the effectiveness of the Registration Statement or of
any part thereof has been
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<PAGE>
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission and that, subsequent to the date of the most
recent financial statements in the Prospectus, there has been no material
adverse change in the financial position or results of operation of the
Company and its Subsidiaries except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(h) The Representatives shall have received a letter, dated the
Closing Date, of ________________, which reconfirms the matters set forth
in their letter delivered pursuant to subsection (a) of this Section and
which state in effect that:
(i) in their opinion, the consolidated financial statements
and schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement on Auditing
Standards No. 71, "Interim Financial Information" on the unaudited
condensed consolidated financial statements incorporated by reference
in the Registration Statement;
(iii) on the basis of the procedures referred to in (ii)
above, and inquiries of officials of the Company who have
responsibility for financial and accounting matters, nothing came to
their attention that caused them to believe that: any modifications
should be made to the unaudited condensed consolidated financial
statements incorporated by reference in the Registration Statement for
them to be in conformity with generally accepted accounting
principles, and such unaudited condensed financial statements
incorporated by reference in the Registration Statement do not comply
in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(iv) on the basis of reading the unaudited pro forma
condensed consolidated statement of earnings for the year ended
December 31, 1998 and the three months ended March 31, 1999,
incorporated by reference in the Registration Statement, and inquiries
of
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certain officials of the Company who have responsibility for financial
and accounting matters, (x) nothing came to their attention that
caused them to believe that such unaudited pro forma condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X and (y) they have proven the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma condensed combined
financial statements;
(v) on the basis of the review referred to in (ii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements, if any,
included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section do not
comply in form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included
in the Prospectus;
(B) the unaudited capsule information, if any, included
in the Prospectus does not agree with the amounts set forth in
the unaudited consolidated financial statements from which it was
derived or was not determined on a basis substantially consistent
with that of the audited financial statements included in the
Prospectus;
(C) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date not
more than five days prior to the Closing Date, there was any
change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and consolidated
Subsidiaries or, at the date of the latest available balance
sheet read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared with
amounts shown on the latest balance sheet included in the
Prospectus; or
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(D) for the period from the date of the latest income
statement included in the Prospectus to the closing date of the
latest available income statement read by such accountants there
were any decreases, as compared with the corresponding period of
the previous year and with the period of corresponding length
ended the date of the latest income statement included in the
Prospectus, in consolidated net sales, net operating income,
income before extraordinary items or net income or in the ratio
of earnings to fixed charges;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vi they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section (in each case to
the extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company and its Subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such records
by analysis or computation) with the results obtained from inquiries,
a reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as they reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue
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<PAGE>
statement of any material fact contained in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus or preliminary prospectus supplement, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein.
(b) Each Underwriter will, severally and not jointly, indemnify
and hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through the Representatives, if any, specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred
by the Company in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under subsection (a) or (b) above, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under subsection (a) or (b) above. In
case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to
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participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. In any such action, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such action
(including any impleaded parties) include both the indemnifying party and
the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any action or related actions in the same jurisdiction, be
liable for the fees and expenses of more than one separate firm (in
addition to any local counsel) for all such indemnified parties and that
all such fees and expenses shall be reimbursed as they are incurred. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject
matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on
the other from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company
on the one hand
-18-
<PAGE>
and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim
which is the subject of this subsection (d). Notwithstanding the provisions
of this subsection (d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the
Company, to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Act.
7. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters default
in their obligations to purchase Securities under the Terms Agreement and the
number of shares of the Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
number of shares of the Securities, the Representatives may make arrangements
satisfactory to the Company for the purchase of such Securities by other
persons, including any of the Underwriters, but if no such arrangements are made
by the Closing Date, the
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<PAGE>
nondefaulting Underwriters shall be obligated severally, in proportion to their
respective commitments under this Agreement and the Terms Agreement, to purchase
the Securities that such defaulting Underwriters agreed but failed to purchase.
If any Underwriter or Underwriters so default and the number of shares of the
Securities with respect to which such default or defaults occur exceeds 10% of
the total number of shares of the Securities and arrangements satisfactory to
the Representatives and the Company for the purchase of such Securities by other
persons are not made within 36 hours after such default, such Terms Agreement
will terminate without liability on the part of any nondefaulting Underwriter or
the Company, except as provided in Section 8. As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default. The respective commitments of the several Underwriters for the
purposes of this Section shall be determined without regard to reduction in the
respective Underwriters' obligations to purchase the numbers of shares of the
Securities set forth opposite their names in the Terms Agreement as a result of
Delayed Delivery Contracts entered into by the Company.
The foregoing obligations and agreements set forth in this Section will not
apply if the Terms Agreement specifies that such obligations and agreements will
not apply.
8. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person and will survive delivery of and
payment for the Securities. If the Terms Agreement is terminated pursuant to
Section 7 or if for any reason the purchase of the Securities by the
Underwriters under the Terms Agreement is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4 and the respective obligations of the Company and the Underwriters
pursuant to Section 6 shall remain in effect. If the purchase of the Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 7 or the occurrence of
any event specified in clause (iii), (iv) or (v) of Section 5(c), the Company
will reimburse the Underwriters for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Securities.
9. NOTICES. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their addresses furnished to the Company in writing for the purpose of
communi-
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<PAGE>
cations hereunder or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at Northrop Grumman Corporation, 1840 Century
Park East, Los Angeles, California 90067, Attention: _______________.
10. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the Company and such Underwriters as are identified in Terms
Agreements and their respective successors and the officers and directors and
controlling persons referred to in Section 6, and no other person will have any
right or obligation hereunder.
11. APPLICABLE LAW. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
NORTHROP GRUMMAN CORPORATION
By _________________________________
Name:
Title:
[INSERT NAMES(S) OF UNDERWRITERS AND
OTHER REPRESENTATIVES OR
UNDERWRITERS] [On behalf of--themselves--itself--and
as Representative[s] of the Several]
[As] Underwriter[s ]
[By ___________________________]
By _________________________________
Name:
Title:
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<PAGE>
SCHEDULE A
<PAGE>
ANNEX I
(THREE COPIES OF THIS DELAYED DELIVERY CONTRACT SHOULD BE
SIGNED AND RETURNED TO THE ADDRESS SHOWN BELOW SO AS TO
ARRIVE NOT LATER THAN 9:00 A.M., NEW YORK TIME, ON
_______________ ____, 19____*)
DELAYED DELIVERY CONTRACT
[INSERT DATE OF PUBLIC OFFERING]
Northrop Grumman Corporation
c/o _________________________
Gentlemen:
The undersigned hereby agrees to purchase from Northrop Grumman
Corporation, a Delaware corporation ("Company"), and the Company agrees to sell
to the undersigned, [IF ONE DELAYED CLOSING, INSERT-as of the date hereof, for
delivery on ___________, 199__ ("Delivery Date"),]
____________ shares
of the Company's [INSERT TITLE OF SECURITIES] ("Securities"), offered by the
Company's Prospectus dated _______, 199___ and a Prospectus Supplement dated
______, 199__ relating thereto, receipt of copies of which is hereby
acknowledged, at $_____ per share plus accrued dividends, if any, and on the
further terms and conditions set forth in this Delayed Delivery Contract
("Contract").
The undersigned will purchase from the Company as of the date hereof, for
delivery on the dates set forth below, Securities in the--principal--amounts set
forth below:
____________________
* INSERT DATE WHICH IS THIRD FULL BUSINESS DAY PRIOR TO CLOSING DATE UNDER
THE TERMS AGREEMENT.
A-1
<PAGE>
[IF TWO OR MORE DELAYED CLOSING, INSERT THE FOLLOWING:
NUMBER
DELIVERY DATE OF SHARES
-------------- ---------
___________________________
___________________________
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to purchase for
delivery on--the--each--Delivery Date shall be made to the Company or its order
by certified or official bank check in New York Clearing House (next day) funds
at the offices of __________________ at ___ __. M. on--the--such--Delivery Date
upon delivery to the undersigned of the Securities to be purchased by the
undersigned--for delivery on such Delivery Date--in definitive form and in such
denominations and registered in such names as the undersigned may designate by
written or telegraphic communication addressed to the Company not less than five
full business days prior to--the--such--Delivery Date.
It is expressly agreed that the provisions for delayed delivery and payment
are for the sole convenience of the undersigned; that the purchase hereunder of
Securities is to be regarded in all respects as a purchase as of the date of
this Contract; that the obligation of the Company to make delivery of and accept
payment for, and the obligation of the undersigned to take delivery of and make
payment for, Securities on--the--each--Delivery Date shall be subject only to
the conditions that (1) investment in the Securities shall not at--the--such--
Delivery Date be prohibited under the laws of any jurisdiction in the United
States to which the undesigned is subject and (2) the Company shall have sold to
the Underwriters the total number of shares of the Securities less the number of
shares thereof covered by this and other similar Contracts. The undersigned
represents that its investment in the Securities is not, as of the date hereof,
prohibited under the laws of any jurisdiction to which the undersigned is
subject and which governs such investment.
Promptly after completion of the sale to the Underwriters the Company will
mail or deliver to the undersigned at the address set forth below notice to such
effect, accompanied by--a copy--copies--of the opinion[s] of counsel for the
Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
A-2
<PAGE>
It is understood that the acceptance of any such Contract is in the
company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
_______________________________________
(NAME OF PURCHASER)
BY ____________________________________
_______________________________________
(TITLE OF SIGNATORY)
_______________________________________
_______________________________________
(ADDRESS OF PURCHASER)
Accepted, as of the above date.
Northrop Grumman Corporation
By ____________________________
Name:
Title:
A-3
<PAGE>
EXHIBIT 1-3
-----------
NORTHROP GRUMMAN CORPORATION
DEBT SECURITIES
UNDERWRITING AGREEMENT
----------------------
1. Introductory. Northrop Grumman Corporation, a Delaware corporation
------------
("Company"), proposes to issue and sell from time to time certain of its debt
securities registered under the registration statement referred to in Section
2(a) ("Registered Securities"). The Registered Securities will be issued under
an indenture, dated as of __________, 199__ ("Indenture"), between the Company
and Chase Manhattan Bank, as Trustee, in one or more series, which series may
vary as to interest rates, maturities, redemption provisions, selling prices and
other terms, with all such terms for any particular series of the Registered
Securities being determined at the time of sale. Particular series of the
Registered Securities will be sold pursuant to a Terms Agreement referred to in
Section 3, for resale in accordance with terms of offering determined at the
time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Securities". The firm or firms which agree to purchase the
Securities are hereinafter referred to as the "Underwriters" of such Securities,
and the representative or representatives of the Underwriters, if any, specified
in a Terms Agreement referred to in Section 3 are hereinafter referred to as the
"Representatives"; provided, however, that if the Terms Agreement does not
specify any representative of the Underwriters, the term "Representatives", as
used in this Agreement (other than in Sections 2(b), 5(c) and 6 and the second
sentence of Section 3), shall mean the Underwriters.
2. Representations and Warranties of the Company. The Company represents
---------------------------------------------
and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 333-_____), including a
prospectus, relating to the Registered Securities has been filed with the
Securities and Exchange Commission ("Commission") and has become effective;
no order preventing or suspending the use of such Prospectus has been
issued by the Commission and no proceeding for that purpose has been
threatened or initiated by the Commission. Such registration statement, as
amended at the time of any Terms Agreement referred to in Section 3, is
hereinafter referred to as the "Registration Statement", and the prospectus
included in such Registration Statement, as supplemented as contemplated by
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<PAGE>
Section 3 to reflect the terms of the Securities and the terms of offering
thereof, as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the Securities Act of 1933, as
amended, (the "Act"), including all material filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
incorporated by reference therein, is hereinafter referred to as the
"Prospectus."
(b) On the effective date of the registration statement relating
to the Registered Securities, such registration statement conformed in all
respects to the requirements of the Act, the Trust Indenture Act of 1939,
as amended, (the "Trust Indenture Act") and the rules and regulations of
the Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and on the date of each Terms Agreement referred to in Section
3, the Registration Statement and the Prospectus will conform in all
respects to the requirements of the Act, the Trust Indenture Act and the
Rules and Regulations, and neither of such documents will include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, except that the foregoing does not apply to (i) statements
in or omissions from any of such documents based upon written information
furnished to the Company by any Underwriter through the Representatives, if
any, specifically for use therein and (ii) that part of the Registration
Statement which shall constitute the Statement of Eligibility and
Qualification (Form T-1) of the Trustee under the Trust Indenture Act.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case
may be, conformed in all material respects to the requirements of the Act
and the Exchange Act, as applicable, and the Rules and Regulations, and
none of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
(d) Each of the Company and its significant subsidiaries listed
on Schedule A hereto (each, a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
organization and has the requisite corporate power and authority to carry
on its business as currently being conducted, to own, lease and operate its
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction where the
operation, ownership or leasing of
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<PAGE>
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not, singly or in the aggregate,
have a material adverse effect on the properties, business, results of
operations, condition (financial or otherwise), affairs or prospects of the
Company and the Subsidiaries, taken as a whole (a "Material Adverse
Effect").
(e) All of the issued and outstanding shares of capital stock of,
or other ownership interest in, each Subsidiary have been duly and validly
authorized and issued and are fully paid and non-assessable and not subject
to any preemptive rights, and all of the shares of capital stock of, or
other ownership interests in, each Subsidiary are owned, directly or
through Subsidiaries, by the Company. Except as set forth in the
Prospectus, all such shares of capital stock are owned free and clear of
any security interest, mortgage, pledge, claim, lien or encumbrance (each,
a "Lien"). There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments or sale or Liens
related to or entitling any person to purchase or otherwise to acquire any
shares of the capital stock of, or other ownership interest in, any
Subsidiary.
(f) The Indenture has been duly authorized by the Company, and,
when duly executed and delivered in accordance with its terms, will be a
valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) or by any implied covenant
of good faith and fair dealing, and will conform to the description thereof
in the Prospectus. The Securities have been duly authorized by the Company
and, on the Closing Date, will have been duly executed by the Company and
will conform to the description thereof in the Prospectus. When the
Securities are issued, authenticated and delivered in accordance with the
Indenture and paid for in accordance with the terms of this Agreement, the
Securities will constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture.
(g) Each of the firms of accountants that has certified or shall
certify the applicable consolidated financial statements and supporting
schedules of the Company filed or to be filed with the Commission as part
of the Registration Statement and the Prospectus or incorporated by
reference therein are independent public accountants with respect to the
Company and the Subsidiaries, as required by the Act. The consolidated
historical and PRO
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<PAGE>
FORMA financial statements, together with related schedules and notes, set
forth in the Prospectus and the Registration Statement or incorporated by
reference therein comply as to form in all material respects with the
requirements of the Act. Such historical financial statements fairly
present the consolidated financial position of the Company and the
Subsidiaries at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated, in
accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout such periods. Such PRO FORMA financial
statements have been prepared on the basis consistent with such historical
statements, except for the PRO FORMA adjustments specified therein, and
give effect to assumptions made on a reasonable basis and present fairly
the historical and proposed transactions contemplated by the Prospectus and
this Agreement. The other financial and statistical information and data
included in the Prospectus and in the Registration Statement, historical
and PRO FORMA, are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books
and records of the Company.
3. Purchase and Offering of Securities. The obligation of the
Underwriters to purchase the Securities will be evidenced by an exchange of
telegraphic or other written communications ("Terms Agreement") at the time the
Company determines to sell the Securities. The Terms Agreement will incorporate
by reference the provisions of this Agreement, except as otherwise provided
therein, and will specify the firm or firms which will be Underwriters, the
names of any Representatives, the principal amount to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters and the terms of
the Securities not already specified in the Indenture, including, but not
limited to, interest, maturity, any redemption provisions, any sinking fund
requirements, any conversion rights or provisions and whether any of the
Securities may be sold to institutional investors pursuant to Delayed Delivery
Contracts (as defined below). The Terms Agreement will also specify the time
and date of delivery and payment (such time and date, or such other time not
later than seven full business days thereafter as the Representatives and the
Company agree as the time for payment and delivery, being herein and in the
Terms Agreement referred to as the "Closing Date"), the place of delivery and
payment and any details of the terms of offering that should be reflected in the
prospectus supplement relating to the offering of the Securities. The
obligations of the Underwriters to purchase the Securities will be several and
not joint. It is understood that the Underwriters propose to offer the
Securities for sale as set forth in the Prospectus. The Securities delivered to
the Underwriters on the Closing Date will be in definitive, fully registered
form, in such denominations and registered in such names as the Underwriters may
request.
-4-
<PAGE>
If the Terms Agreement provides for sales of Securities pursuant to
delayed delivery contracts, the Company authorizes the Underwriters to solicit
offers to purchase Securities pursuant to delayed delivery contracts
substantially in the form of Annex I attached hereto ("Delayed Delivery
Contracts") with such changes therein as the Company may authorize or approve.
Delayed Delivery Contracts are to be with institutional investors, including
commercial and savings banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. On the Closing Date the
Company will pay, as compensation, to the Representatives for the accounts of
the Underwriters, the fee set forth in such Terms Agreement in respect of the
principal amount of Securities to be sold pursuant to Delayed Delivery Contracts
("Contract Securities"). The Underwriters will not have any responsibility in
respect of the validity or the performance of Delayed Delivery Contracts. If
the Company executes and delivers Delayed Delivery Contracts, the Contract
Securities will be deducted from the Securities to be purchased by the several
Underwriters and the aggregate principal amount of Securities to be purchased by
each Underwriter will be reduced pro rata in proportion to the principal amount
of Securities set forth opposite each Underwriter's name in such Terms
Agreement, except to the extent that the Representatives determine that such
reduction shall be otherwise than pro rata and so advise the Company. The
Company will advise the Representatives not later than the business day prior to
the Closing Date of the principal amount of Contract Securities.
4. Certain Agreements of the Company. The Company agrees with the
---------------------------------
several Underwriters that it will furnish to ________________, counsel for the
Underwriters, one signed copy of the registration statement relating to the
Registered Securities, including all exhibits, in the form it became effective
and of all amendments thereto and that, in connection with each offering of
Securities:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) or, if applicable and if
consented to by the Representatives, subparagraph (5), not later than the
second business day following the execution and delivery of the Terms
Agreement.
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will
also advise the Representatives promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if issued.
-5-
<PAGE>
(c) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the Prospectus to comply with the Act, the Company promptly
will prepare and file with the Commission an amendment or supplement which
will correct such statement or omission or an amendment which will effect
such compliance. Neither the Representatives' consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5.
(d) As soon as practicable following the issuance and sale of any
of the Registered Securities, the Company will make generally available to
its security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will comply with the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related Prospectus, any
related preliminary prospectus supplement, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as are reasonably requested.
(f) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Representatives designate and will continue such qualifications in effect
so long as required for the distribution.
(g) During the period of 5 years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year a copy of its annual report to
stockholders for such year, and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission under
the Exchange Act or mailed to stockholders, and (ii) from time to time,
such other information concerning the Company as the Representatives may
reasonably request.
-6-
<PAGE>
(h) The Company will pay all expenses incident to the performance
of its obligations under this Agreement and will reimburse the Underwriters
for any expenses (including fees and disbursements of counsel) incurred by
them in connection with qualification of the Registered Securities for sale
and determination of their eligibility for investment under the laws of
such jurisdictions as the Representatives may designate pursuant to Section
4(f) hereof and the printing of any memorandum relating thereto, for any
fees charged by investment rating agencies for the rating of the
Securities, for fees charged by the National Association of Securities
Dealers, Inc. and for expenses incurred in distributing the Prospectus, any
preliminary prospectuses and any preliminary prospectus supplements to the
Underwriters. It is understood, however, that, except as provided in this
Section, Section 6 and Section 8 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, transfer
taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
(i) For a period beginning at the time of execution of the Terms
Agreement and ending on the later of (x) the termination of the syndicate
of Underwriters in connection with the offering and sale of the Securities
or (y) the Closing Date, without the prior consent of the Representatives,
the Company will not offer, sell, contract to sell or otherwise dispose of
United States dollar-denominated debt securities issued or guaranteed by
the Company and having a maturity of more than one year from the date of
issue.
5. Conditions of the Obligations of the Underwriters. The obligations of
-------------------------------------------------
the several Underwriters to purchase and pay for the Securities will be subject
to the accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of ________________________ confirming that they are independent
public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating in effect that:
(i) in their opinion, the consolidated financial statements
and schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all
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<PAGE>
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations;
(ii) they have performed procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement on Auditing
Standards No. 71, "Interim Financial Information" on the unaudited
condensed consolidated financial statements incorporated by reference
in the Registration Statement;
(iii) on the basis of the procedures referred to in (ii)
above, and inquiries of officials of the Company who have
responsibility for financial and accounting matters, nothing came to
their attention that caused them to believe that: any modifications
should be made to the unaudited condensed consolidated financial
statements incorporated by reference in the Registration Statement for
them to be in conformity with generally accepted accounting
principles, and such unaudited condensed financial statements
incorporated by reference in the Registration Statement do not comply
in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(iv) on the basis of reading the unaudited pro forma
condensed consolidated statement of earnings for the year ended
December 31, 1998 and the three months ended March 31, 1999,
incorporated by reference in the Registration Statement, and inquiries
of certain officials of the Company who have responsibility for
financial and accounting matters, (x) nothing came to their attention
that caused them to believe that such unaudited pro forma condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X and (y) they have proven the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma condensed consolidated
financial statements; and
(v) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information, including the ratio of earnings to fixed charges,
contained in such prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
Subsidiaries subject to the internal controls of the Company's
accounting system or are derived
-8-
<PAGE>
directly from such records by analysis or computation) with the
results obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have found
such dollar amounts, percentages and other financial information to be
in agreement with such results, except as otherwise specified in such
letter.
All financial statements and schedules included in material incorporated by
reference into such prospectus shall be deemed included in such prospectus for
purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or its Subsidiaries which, in the judgment of a majority in
interest of the Underwriters, including any Representatives, materially
impairs the investment quality of the Securities or the Registered
Securities; (ii) any downgrading in the rating of any debt securities or
preferred stock of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities or preferred stock
of the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters, including
any Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Securities.
-9-
<PAGE>
(d) The Representatives shall have received an opinion, dated the
Closing Date, of _______________________________________, counsel for the
Company, to the effect that:
(i) Each of the Company and its Subsidiaries has been duly
incorporated and is an existing corporation in good standing under the
laws of the State of its jurisdiction of incorporation, with corporate
power and authority to own its properties and conduct its business as
described in the Prospectus; and, to the best of such counsel's
knowledge, each of the Company and its Subsidiaries is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which it owns or leases substantial properties or in
which the conduct of its business requires such qualification, except
where the failure to qualify would not have a Material Adverse Effect;
(ii) The Company has authorized capitalization as set forth
in the Prospectus;
(iii) The Indenture has been duly authorized, executed and
delivered by the Company and has been duly qualified under the Trust
Indenture Act; the Securities have been duly authorized; the
Securities other than any Contract Securities have been duly executed,
authenticated, issued and delivered; the Indenture and the Securities
other than any Contract Securities constitute, and any Contract
Securities, when executed, authenticated, issued and delivered in the
manner provided in the Indenture and sold pursuant to Delayed Delivery
Contracts, will constitute, valid and legally binding obligations of
the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) or by any implied covenant of good
faith and fair dealing; and the Securities other than any Contract
Securities conform, and any Contract Securities, when so issued and
delivered and sold, will conform, to the description thereof contained
in the Prospectus;
(iv) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by the Terms
Agreement (including the provisions of this Agreement) in connection
with the issuance or sale of the Securities by the Company, except
such
-10-
<PAGE>
as have been obtained and made under the Act and the Trust Indenture
Act and such as may be required under state securities laws;
(v) The execution, delivery and performance of the
Indenture, the Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts and the issuance and
sale of the Securities and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any Federal,
California or Delaware statute or any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the
Company or any of its properties or any material agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the properties of the Company is subject, or
the charter or by-laws of the Company, and the Company has the power
and authority to authorize, issue and sell the Securities as
contemplated by the Terms Agreement (including the provisions of this
Agreement);
(vi) After due inquiry, such counsel does not know of any
legal or governmental proceeding pending or threatened to which the
Company or any of its Subsidiaries is a party or to which any of their
respective property is subject which is required to be described in
the Registration Statement or the Prospectus and is not so described;
(vii) The Registration Statement has become effective under
the Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein, and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated
under the Act, and the Registration Statement and the Prospectus
(other than the financial statements and notes thereto and supporting
schedules and other financial and statistical information contained
therein as to which such counsel need express no opinion) complied as
to form in all material respects with the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations; and
(viii) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
-11-
<PAGE>
Such counsel shall also state that on the basis of their involvement
in the preparation of the Registration Statement and although they have not
verified the accuracy or completeness of the statements contained therein or in
any amendment thereto, nothing has come to the attention of such counsel which
causes them to believe that the Registration Statement or the Prospectus (other
than the financial statements and notes thereto and supporting schedules and
other financial and statistical information contained therein) contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading; and such counsel does not know of any contracts or documents of a
character required to be described in the Registration Statement or Prospectus
or to be filed as exhibits to the Registration Statement which are not described
and filed as required; it being understood that such counsel need express no
opinion as to the financial statements or other financial data contained in the
Registration Statement or the Prospectus.
In rendering such opinion, such counsel shall opine as to the effect
of the federal laws of the United States, the internal laws of the States of
California and New York and the General Corporation Laws of the State of
Delaware. As to matters involving application of the laws of the State of New
York, to the extent specified in such opinion, such counsel may rely on the
opinion of other counsel of good standing believed to be reliable and who are
satisfactory to counsel for the Underwriters.
(e) The Representatives shall have received an opinion, dated the
Closing Date, of __________________, to the effect that:
(i) The execution, delivery and performance of the
Indenture, the Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts and the issuance and
sale of the Securities and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any Federal,
California or Delaware statute or any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the
Company or any of its properties or any agreement or instrument to
which the Company is a party or by which the Company is bound or to
which any of its properties is subject, or the charter or by-laws of
the Company, and the Company has the power and authority to
authorize, issue and sell the Securities as contemplated by the Terms
Agreement (including the provisions of this Agreement);
(ii) Such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company
-12-
<PAGE>
or any of its Subsidiaries is a party or to which any of their
respective properties is subject which is required to be described in
the Registration Statement or the Prospectus and is not so described,
or of any contract or other document which is required to be described
in the Registration Statement or the Prospectus or is required to be
filed as an exhibit to the Registration Statement which is not
described or filed as required.
In rendering such opinion, such counsel shall opine as to the effect
of the federal laws of the United States, the internal laws of the State of
California and the General Corporation Laws of the State of Delaware.
(f) The Representatives shall have received from
________________, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the incorporation of the Company,
the validity of the Securities, the Registration Statement, the Prospectus
and other related matters as they may require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(g) The Representatives shall have received a certificate, dated
the Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Company in this Agreement
are true and correct, that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, that no stop order suspending the
effectiveness of the Registration Statement or of any part thereof has been
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission and that, subsequent to the date of the most
recent financial statements in the Prospectus, there has been no material
adverse change in the financial position or results of operation of the
Company and its Subsidiaries except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(h) The Representatives shall have received a letter, dated the
Closing Date, of _________________________, which reconfirms the matters
set forth in their letter delivered pursuant to subsection (a) of this
section and which states in effect that:
(i) in their opinion, the consolidated financial statements
and schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered
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<PAGE>
Securities, as amended at the date of such letter, comply in form in
all material respects with the applicable accounting requirements of
the Act and the related published Rules and Regulations;
(ii) they have performed procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement on Auditing
Standards No. 71, "Interim Financial Information" on the unaudited
condensed consolidated financial statements incorporated by reference
in the Registration Statement;
(iii) on the basis of the procedures referred to in (ii)
above, and inquiries of officials of the Company who have
responsibility for financial and accounting matters, nothing came to
their attention that caused them to believe that: any modifications
should be made to the unaudited condensed consolidated financial
statements incorporated by reference in the Registration Statement for
them to be in conformity with generally accepted accounting
principles, and such unaudited condensed financial statements
incorporated by reference in the Registration Statement do not comply
in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(iv) on the basis of reading the unaudited pro forma
condensed consolidated statement of earnings for the year ended
December 31, 1993 and the three months ended March 31, 1994,
incorporated by reference in the Registration Statement, and inquiries
of certain officials of the Company who have responsibility for
financial and accounting matters, (x) nothing came to their attention
that caused them to believe that such unaudited pro forma condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X and (y) they have proven the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma condensed combined
financial statements;
(v) on the basis of the review referred to in (ii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
-14-
<PAGE>
A. the unaudited financial statements, if any, included in
the Prospectus and not covered by their letter delivered pursuant
to subsection (a) of this Section do not comply in form in all
material respects with the applicable accounting requirements of
the Act and the related published Rules and Regulations or are not
in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the
audited financial statements included in the Prospectus;
B. the unaudited capsule information, if any, included in
the Prospectus does not agree with the amounts set forth in the
unaudited consolidated financial statements from which it was
derived or was not determined on a basis substantially consistent
with that of the audited financial statements included in the
Prospectus;
C. at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not more than
five days prior to the Closing Date, there was any change in the
capital stock or any increase in short-term indebtedness or long-
term debt of the Company and consolidated Subsidiaries or, at the
date of the latest available balance sheet read by such
accountants, there was any decrease in consolidated net current
assets or net assets, as compared with amounts shown on the latest
balance sheet included in the Prospectus; or
D. for the period from the date of the latest income
statement included in the Prospectus to the closing date of the
latest available income statement read by such accountants there
were any decreases, as compared with the corresponding period of
the previous year and with the period of corresponding length
ended the date of the latest income statement included in the
Prospectus, in consolidated net sales, net operating income,
income before extraordinary items or net income or in the ratio of
earnings to fixed charges;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vi) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
-15-
<PAGE>
information included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section (in each case to
the extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company and its Subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such records
by analysis or computation) with the results obtained from inquiries,
a reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus for the
purposes of this subsection.
The Company will furnish the Representatives with such conformed
copies of such opinions, certificates, letters and documents as they reasonably
request.
6. Indemnification and Contribution.
--------------------------------
(a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus or preliminary prospectus supplement, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein.
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<PAGE>
(b) Each Underwriter will, severally and not jointly, indemnify
and hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through the Representatives, if any, specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred
by the Company in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under subsection (a) or (b) above, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under subsection (a) or (b) above. In case
any such action is brought against any indemnified party and it notifies
the indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation. In any such action, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named parties
to any such action (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests
-17-
<PAGE>
between them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection with
any action or related actions in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. No indemnifying party
shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party unless such settlement
includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on
the other from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of
this subsection (d). Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
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<PAGE>
amount by which the total price at which the Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are several
in proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the
Company, to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters default in
-----------------------
their obligations to purchase Securities under the Terms Agreement and the
aggregate principal amount of the Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
principal amount of the Securities, the Representatives may make arrangements
satisfactory to the Company for the purchase of such Securities by other
persons, including any of the Underwriters, but if no such arrangements are made
by the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments under this Agreement
and the Terms Agreement, to purchase the Securities that such defaulting
Underwriters agreed but failed to purchase. If any Underwriter or Underwriters
so default and the aggregate principal amount of the Securities with respect to
which such default or defaults occur exceeds 10% of the total principal amount
of the Securities and arrangements satisfactory to the Representatives and the
Company for the purchase of such Securities by other persons are not made within
36 hours after such default, such Terms Agreement will terminate without
liability on the part of any nondefaulting Underwriter or the Company, except as
provided in Section 8. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default. The
respective commitments of the several Underwriters for the purposes of this
Section shall be determined without regard to reduction in the respective
Underwriters' obligations to purchase the principal amounts of the Securities
set forth opposite their names in the
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<PAGE>
Terms Agreement as a result of Delayed Delivery Contracts entered into by the
Company.
The foregoing obligations and agreements set forth in this Section
will not apply if the Terms Agreement specifies that such obligations and
agreements will not apply.
8. Survival of Certain Representations and Obligations. The respective
---------------------------------------------------
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person and will survive delivery of and
payment for the Securities. If the Terms Agreement is terminated pursuant to
Section 7 or if for any reason the purchase of the Securities by the
Underwriters under the Terms Agreement is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4 and the respective obligations of the Company and the Underwriters
pursuant to Section 6 shall remain in effect. If the purchase of the Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 7 or the occurrence of
any event specified in clause (iii), (iv) or (v) of Section 5(c), the Company
will reimburse the Underwriters for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Securities.
9. Notices. All communications hereunder will be in writing and, if sent
-------
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their addresses furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at Northrop Grumman Corporation, 1840 Century
Park East, Los Angeles, California 90067, Attention: __________________
10. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the Company and such Underwriters as are identified in Terms
Agreements and their respective successors and the officers and directors and
controlling persons referred to in Section 6, and no other person will have any
right or obligation hereunder.
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<PAGE>
11. Applicable Law. This Agreement and the Terms Agreement shall be
--------------
governed by, and construed in accordance with, the laws of the State of New
York.
NORTHROP GRUMMAN CORPORATION
By
-----------------------------------
Name:
Title:
[Insert names(s) of Underwriter and other
Representatives or Underwriters]
[On behalf of--themselves--itself--and as
Representative[s] of the Several][As]
Underwriter[s]
[By ___________________________]
By
-----------------------------------
Name:
Title:
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<PAGE>
SCHEDULE A
-22-
<PAGE>
ANNEX I
(THREE COPIES OF THIS DELAYED DELIVERY CONTRACT
SHOULD BE SIGNED AND RETURNED TO THE ADDRESS
SHOWN BELOW SO AS TO ARRIVE NOT LATER THAN
9:00 A.M., NEW YORK TIME, ON _______________19)
DELAYED DELIVERY CONTRACT
[INSERT DATE OF PUBLIC OFFERING]
Northrop Grumman Corporation
c/o _____________________
Gentlemen:
The undersigned hereby agrees to purchase from Northrop Grumman
Corporation, a Delaware corporation ("Company"), and the Company agrees to sell
to the undersigned, [IF ONE DELAYED CLOSING, INSERT-as of the date hereof, for
delivery on ______, 199__ ("Delivery Date"),]
[$]_________________
- - --principal amount--of the Company's [INSERT TITLE OF SECURITIES]
("Securities"), offered by the Company's Prospectus dated _______, 199___ and a
Prospectus Supplement dated ______, 199__ relating thereto, receipt of copies of
which is hereby acknowledged, at--__% of the principal amount thereof plus
accrued interest if any, and on the further terms and conditions set forth in
this Delayed Delivery Contract ("Contract").
[IF TWO OR MORE DELAYED CLOSING, INSERT THE FOLLOWING:
The undersigned will purchase from the Company as of the date hereof,
for delivery on the dates set forth below, Securities in the--principal--amounts
set forth below:
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<PAGE>
DELIVERY DATE PRINCIPAL AMOUNT
---------------------------- -----------------------------
---------------------------- -----------------------------
Each of such delivery dates is hereinafter referred to as a Delivery Date.
Payment for the Securities that the undersigned has agreed to purchase
for delivery on--the--each--Delivery Date shall be made to the Company or its
order by certified or official bank check in New York Clearing House (next day)
funds at the offices of __________________ at ___ __. M. on--the--such--Delivery
Date upon delivery to the undersigned of the Securities to be purchased by the
undersigned--for delivery on such Delivery Date--in definitive fully registered
form and in such denominations and registered in such names as the undersigned
may designate by written or telegraphic communication addressed to the Company
not less than five full business days prior to--the--such--Delivery Date.
- ---------------------------
* INSERT DATE WHICH IS THIRD FULL BUSINESS DAY PRIOR TO CLOSING DATE UNDER THE
TERMS AGREEMENT.
It is expressly agreed that the provisions for delayed delivery and
payment are for the sole convenience of the undersigned; that the purchase
hereunder of Securities is to be regarded in all respects as a purchase as of
the date of this Contract; that the obligation of the Company to make delivery
of and accept payment for, and the obligation of the undersigned to take
delivery of and make payment for, Securities on each Delivery Date shall be
subject only to the conditions that (1) investment in the Securities shall not
at such Delivery Date be prohibited under the laws of any jurisdiction in the
United States to which the undesigned is subject and (2) the Company shall have
sold to the Underwriters the total principal amount of the Securities less the
principal amount thereof covered by this and other similar Contracts. The
undersigned represents that its investment in the Securities is not, as of the
date hereof, prohibited under the laws of any jurisdiction to which the
undersigned is subject and which governs such investment.
Promptly after completion of the sale to the Underwriters the Company
will mail or deliver to the undersigned at the address set forth below notice to
such effect, accompanied by copies of the opinion[s] of counsel for the Company
delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
-24-
<PAGE>
It is understood that the acceptance of any such Contract is in the
company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
---------------------------------
(NAME OF PURCHASER)
By
----------------------------
----------------------------
(TITLE OF SIGNATORY)
----------------------------
----------------------------
(ADDRESS OF PURCHASER)
Accepted, as of the above date.
Northrop Grumman Corporation
By
-----------------------------------
Name:
Title:
-25-
<PAGE>
EXHIBIT 4.8 - FORM OF CERTIFICATE FOR COMMON STOCK
COMMON STOCK
_________SHARES
NORTHROP GRUMMAN CORPORATION
THIS CERTIFICATE IS TRANSFERABLE IN THE CITIES OF NEW YORK, NY
AND RIDGEFIELD PARK, NJ
INCORPORATED UNDER THE LAWS CUSIP 666807 10 2
OF THE STATE OF DELAWARE SEE REVERSE FOR
CERTAIN DEFINITIONS
This Certifies that
is the record holder of
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK,
$1.00 PAR VALUE, OF NORTHROP GRUMMAN CORPORATION
transferable on the books of the Corporation by the holder hereof in
person or by duly authorized Attorney upon surrender of this
certificate properly endorsed. This certificate is not valid until
countersigned by the Transfer Agent and registered by the Registrar.
-1-
<PAGE>
WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated
/s/ John H. Mullan /s/ Kent Kresa
- ------------------------------ ------------------------------
SECRETARY CHAIRMAN OF THE BOARD
COUNTERSIGNED AND REGISTERED:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
TRANSFER AGENT AND REGISTRAR
BY ____________________________________
AUTHORIZED SIGNATURE
The Corporation shall furnish without charge to each stockholder who so
requests a statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock of the
Corporation or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Such requests shall be made to
the Corporation's Secretary at the principal office of the Corporation.
This certificate also entitles the holder hereof to certain rights as set
forth in a Rights Agreement between Northrop Grumman Corporation and ChaseMellon
Shareholder Services, L.L.C., dated as of September 23, 1998 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal executive offices of Northrop
Grumman Corporation. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. Northrop Grumman Corporation will mail
to the holder of this certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor from such holder. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or held by,
any Person who is, was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as defined in the Rights Agreement) and certain related
persons, whether currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
-2-
<PAGE>
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C> <C>
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
</TABLE>
-3-
<PAGE>
UNIF GIFT MIN ACT -- ___________________Custodian ____________________
(Cust) (Minor)
under Uniform Gifts to Minors
Act ____________________________________________
(State)
UNIF TRF MIN ACT -- __________________Custodian (until age____________)
(Cust)
___________________________ under Uniform Transfers
(Minor)
to Minors Act ___________________________________
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, ____________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
ASSIGNEE)
______________________________________________________________________
______________________________________________________________________
__________________________________________________________________Shares of the
common stock represented by the within Certificate, and do hereby irrevocably
constitute and appoint _________________________________________
-4-
<PAGE>
Attorney to transfer the said stock on the books of the within named Corporation
with full power of substitution in the premises.
Dated _______________________
X ____________________________________
X ____________________________________
THE SIGNATURE(S) TO THIS ASSIGNMENT MUST
CORRESPOND WITH NOTICE: THE NAME(S) AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN
EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.
Signature(s) Guaranteed
By _________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM, PURSUANT
TO S.E.C. RULE 17Ad-15.
-5-
<PAGE>
Exhibit 5-1
Sheppard, Mullin, Richter & Hampton LLP
May 10, 1999
Northrop Grumman Corporation
1840 Century Park East
Los Angeles, California 90067
Re: Northrop Grumman Corporation
----------------------------
Registration Statement on Form S-3
----------------------------------
Dear Ladies and Gentlemen:
We have acted as counsel for Northrop Grumman Corporation, a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of $1,500,000,000 aggregate
principal amount of the Company's senior and subordinated debt securities
(collectively, the "Debt Securities"); warrants to purchase Debt Securities
("Debt Warrants"); preferred stock, par value $1.00 per share ("Preferred
Stock"); common stock, par value $1.00 per share ("Common Stock"); and warrants
to purchase shares of Common Stock, Preferred Stock or other securities ("Equity
Warrants"). The Debt Securities, Debt Warrants, Preferred Stock, Common Stock
and Equity Warrants are herein referred to collectively as the "Securities".
The Securities may be issued from time to time by the Company after the
registration statement to which this opinion is an exhibit (the "Registration
Statement") becomes effective. The terms used herein, unless otherwise defined,
have the meanings assigned to them in the Registration Statement.
We have examined such documents as we have considered necessary for
purposes of this opinion, including (i) the form of Senior Indenture between the
Company and The Chase Manhattan Bank, as trustee (the "Senior Indenture"), (ii)
the
<PAGE>
form of Subordinated Indenture between the Company and The Chase Manhattan Bank,
as trustee (the "Subordinated Indenture"), (iii) the amended Certificate of
Incorporation and By-Laws of the Company, (iv) the forms of debt warrant
agreement and equity warrant agreement (the "Warrant Agreements"), each between
the Company and one or more warrant agents (each, a "Warrant Agent") relating to
the Debt Warrants of the Equity Warrants, as the case may be, and such other
documents and matters of law as we have deemed necessary in connection with the
opinions hereinafter expressed. In such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity to authentic originals of all documents
submitted to us as certified copies or photocopies. In rendering the opinions
expressed below, we have relied on factual representations by Company officials
and statements of fact contained in the documents we have examined, and have
assumed that the laws of the State of New York are identical to the laws of the
State of California.
On the basis of the foregoing and having regard for legal
considerations we deem relevant, we are of the opinion that:
(1) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware.
(2) Upon the taking of appropriate corporate action by the Company;
the effectiveness of the Registration Statement under the Act; the qualification
of the Senior Indenture or the Subordinated Indenture, as the case may be, under
the Trust Indenture Act of 1939; the compliance with the "blue sky" laws of
certain states; the due execution and delivery by the parties thereto of (a) the
Senior Indenture and Subordinated Indenture and each amendment of or supplement
thereto, as the case may be (each such Indenture, as so amended or supplemented,
being referred to as an "Indenture", and the Trustee under any Indenture being
referred to as a "Trustee") and (b) a Warrant Agreement relating to Debt
Warrants, and each amendment of or supplement thereto (each such Warrant
Agreement, as so amended or supplemented, being referred to as a "Debt Warrant
Agreement"), assuming that the relevant Indenture and Debt Warrant Agreement are
consistent with the forms thereof filed as exhibits to the Registration
Statement; and the due execution of the Debt Securities and the Debt Warrants on
behalf of the Company, the Debt Securities and the Debt Warrants will be duly
and validly authorized and, when the Debt Securities are duly authenticated by
the relevant Trustee and the Debt Warrants are duly authenticated by the
relevant Warrant Agent and sold and delivered at the price and in accordance
with the terms set forth in the Registration Statement and the supplement or
supplements to the relevant Prospectus included therein, the Debt Securities and
the Debt Warrants
-2-
<PAGE>
will be valid and binding obligations of the Company, entitled to the benefits
of the relevant Indenture and Debt Warrant Agreement, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(3) Upon the taking of appropriate corporate action by the Company and
its shareholders, including the approval of the terms of any class or series of
Securities; the effectiveness of the Registration Statement under the Act; the
due execution and delivery by the parties thereto of a Warrant Agreement
relating to Equity Warrants, and each amendment thereof or supplement thereto
(each such Warrant Agreement, as so amended or supplemented, being referred to
an "Equity Warrant Agreement"), assuming that the relevant Equity Warrant
Agreement is consistent with the form thereof filed as an exhibit to the
Registration Statement and the due execution of the Equity Warrants on behalf of
the Company, the Equity Warrants will be duly and validly authorized and, when
duly authenticated by the relevant Warrant Agent and sold and delivered at the
price and in accordance with the terms set forth in the Registration Statement
and the supplement or supplements to the relevant Prospectus included therein,
the Common Stock and the Preferred Stock will be validly issued, fully paid and
nonassessable and the Equity Warrants will be valid and binding obligations of
the Company, entitled to the benefits of the Equity Warrant Agreement except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Validity of the Debt and Equity Securities" in the Prospectus. In giving such
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
-3-
<PAGE>
EXHIBIT 12.1
Northrop Grumman Corporation
Ratio of Earnings to Fixed Charges
($ in millions of U.S. Dollars except ratios)
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
----------------------------------------
1998 1997 1996 1995 1994
----------------------------------------
<S> <C> <C> <C> <C> <C>
Earnings
Income from continuing operations
before income taxes $ 312 $ 651 $ 432 $ 448 $ 93
----------------------------------------
Fixed Charges
Portion of rentals representative
of interest factor 35 36 37 35 33
Interest Expenses 219 242 246 135 106
Amortization of debt issue costs
and other fees 14 15 24 2 3
----------------------------------------
Total Fixed Charges 268 293 307 172 142
----------------------------------------
Earnings Plus Fixed Charges $ 580 $ 944 $ 739 $ 620 $ 235
========================================
Ratio of Earnings to Fixed Charges 2.2 3.2 2.4 3.6 1.7
========================================
</TABLE>
<PAGE>
EXHIBIT 23-1
------------
INDEPENDENT AUDITORS CONSENT
We consent to the incorporation by reference in this Registration
Statement of Northrop Grumman Corporation on Form S-3 of our report dated March
22, 1999, appearing in the Annual Report on Form 10-K of Northrop Grumman
Corporation for the year ended December 31, 1998, and to the reference to us
under the heading "Experts" in such Registration Statement.
DELOITTE & TOUCHE LLP
Los Angeles, California
May 10, 1999
<PAGE>
EXHIBIT 24-1
POWER OF ATTORNEY
FILING OF REGISTRATION STATEMENT ON FORM S-3
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors and
officers of NORTHROP GRUMMAN CORPORATION, a Delaware corporation (the
"Company"), hereby nominate and appoint RICHARD B. WAUGH, JR., RICHARD R.
MOLLEUR and JOHN H. MULLAN, and each of them acting or signing singly, as his or
her agents and attorneys-in-fact (the "Agents"), in his or her respective name
and in the capacity or capacities indicated below to execute and/or file (1) a
registration statement on Form S-3 under the Securities Act of 1933, as amended,
(the "Act"), in connection with the registration under the Act of Debt
Securities, Preferred Stock, Common Stock, Warrants to purchase Debt Securities
and Warrants to purchase Equity Securities (including the final prospectus,
schedules and all exhibits and other documents filed therewith or constituting a
part thereof); and (2) any one or more amendments to any part of the foregoing
registration statement, including any post-effective amendments or appendices or
supplements that may be required to be filed under the Act to keep such
registration statement effective or to terminate its effectiveness.
Further, the undersigned do hereby authorize and direct the said agents and
attorneys-in-fact to take any and all actions and execute and file any and all
documents with the Securities and Exchange Commission (the "SEC"), or state
regulatory agencies, necessary, proper or convenient in their opinion to comply
with the Act and the rules and regulations or orders of the SEC, or state
regulatory agencies, adopted or issued pursuant thereto, including the making of
any requests for acceleration of the effective date of said registration
statement, to the end that the registration statement of the Company shall
become effective under the Act and any other applicable law.
Finally, each of the undersigned does hereby ratify, confirm and approve each
and every act and document which the said appointment agents and attorneys-in-
fact may take, execute or file pursuant thereto with the same force and effect
as though such action had been taken or such documents had been executed or
filed by the undersigned respectively.
This Power of Attorney shall remain in full force and effect until revoked or
superseded by written notice filed with the SEC.
-1-
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has subscribed these presents this
7th day of May, 1999.
<TABLE>
<CAPTION>
<S> <C>
/s/ Kent Kresa Chairman of the Board, President and Chief
- -------------------------- Executive
Kent Kresa Officer and Director (Principal Executive Officer)
/s/ Jack R. Borsting Director
- --------------------------
Jack R. Borsting
/s/ John T. Chain, Jr. Director
- --------------------------
John T. Chain, Jr.
/s/ Jack Edwards Director
- --------------------------
Jack Edwards
/s/ Phillip Frost Director
- --------------------------
Phillip Frost
/s/ Robert A. Lutz Director
- --------------------------
Robert A. Lutz
/s/ Aulana L. Peters Director
- --------------------------
Aulana L. Peters
/s/ John E. Robson Director
- --------------------------
John E. Robson
/s/ Richard M. Rosenberg Director
- --------------------------
Richard M. Rosenberg
/s/ John Brooks Slaughter Director
- --------------------------
John Brooks Slaughter
/s/ Richard J. Stegemeier Director
- --------------------------
Richard J. Stegemeier
Corporate Vice President and Chief Financial
- -------------------------- Officer (Principal Financial Officer)
Richard B. Waugh, Jr.
Corporate Vice President and Controller
- -------------------------- (Principal Financial Officer)
Nelson F. Gibbs
</TABLE>
-2-
<PAGE>
EXHIBIT 25.1
___________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
NORTHROP GRUMMAN CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 95-1055798
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1840 Century Park East
Los Angeles, California 90067
(Address of principal executive offices) (Zip Code)
-----------------------------------------
Debt Securities & Debt Warrants
(Title of the indenture securities)
---------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference. On July 14, 1996, in connection with
the merger of Chemical Bank and The Chase Manhattan Bank (National Association),
Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 9th day of April, 1999.
THE CHASE MANHATTAN BANK
By /s/ James P. Freeman
---------------------------
James P. Freeman
Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1998, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin................................. $ 13,915
Interest-bearing balances......................... 7,805
Securities:.........................................
Held to maturity securities......................... 1,429
Available for sale securities....................... 56,327
Federal funds sold and securities purchased under
agreements to resell.............................. 21,733
Loans and lease financing receivables:
Loans and leases, net of unearned income... $131,095
Less: Allowance for loan and lease losses.. 2,711
Less: Allocated transfer risk reserve...... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve............................ 128,384
Trading Assets...................................... 48,949
Premises and fixed assets (including capitalized
leases)........................................... 3,095
Other real estate owned............................. 239
Investments in unconsolidated subsidiaries and
associated companies.............................. 199
Customers' liability to this bank on acceptances
outstanding....................................... 1,209
Intangible assets................................... 2,081
Other assets........................................ 11,352
--------
TOTAL ASSETS........................................ $296,717
========
</TABLE>
- 4 -
<PAGE>
LIABILITIES
<TABLE>
<S> <C>
Deposits
In domestic offices.................................... $105,879
Noninterest-bearing.............................$39,175
Interest-bearing ..............................66,704
------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's................................. 79,294
Noninterest-bearing ............................$ 4,082
Interest-bearing.................................75,212
Federal funds purchased and securities sold under
agreements to repurchase................................. 32,546
Demand notes issued to the U.S. Treasury................. 629
Trading liabilities...................................... 36,807
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less.......... 4,478
With a remaining maturity of more than one year
through three years............................... 213
With a remaining maturity of more than three years..... 115
Bank's liability on acceptances executed and outstanding. 1,209
Subordinated notes and debentures........................ 5,408
Other liabilities........................................ 10,855
TOTAL LIABILITIES........................................ 277,433
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock............................................. 1,211
Surplus (exclude all surplus related to preferred stock) 11,016
Undivided profits and capital reserves................... 6,762
Net unrealized holding gains (losses)
on available-for-sale securities......................... 279
Cumulative foreign currency translation adjustments...... 16
TOTAL EQUITY CAPITAL..................................... 19,284
--------
TOTAL LIABILITIES AND EQUITY CAPITAL..................... $296,717
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named
bank, do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued
by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
-5-
