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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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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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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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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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
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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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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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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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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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(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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(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,
0000 Xxxxxxx Xxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, 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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