EXHIBIT 1-3
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NORTHROP GRUMMAN CORPORATION
DEBT SECURITIES
UNDERWRITING AGREEMENT
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1. Introductory. Northrop Grumman Corporation, a Delaware corporation
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("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
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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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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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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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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.
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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
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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.
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(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.
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(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
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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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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
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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.
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(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
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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.
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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
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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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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-
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-
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.
-16-
(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-
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
-18-
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
-19-
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, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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.
-20-
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:
-21-
SCHEDULE A
-22-
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:
-23-
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-
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-