As filed with the Securities and Exchange Commission on May 23, 2001
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Northrop Grumman Systems Corporation
(formerly Northrop Grumman Corporation)
Northrop Grumman Corporation (formerly NNG, Inc.)
Litton Industries, Inc.
(Exact names of registrants as specified in their charters)
95-1055798
95-4840775
Delaware 3812 95-1775499
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Identification Numbers)
incorporation or organization) Classification Code Number)
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Northrop Grumman Corporation
1840 Century Park East
Los Angeles, California 90067
(310) 553-6262
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
W. Burks Terry
Corporate Vice President and General Counsel
Northrop Grumman Corporation
Northrop Grumman Systems Corporation
Litton Industries, Inc.
1840 Century Park East
Los Angeles, California 90067
(310) 553-6262
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies To:
John D. Hussey, Esquire
Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street, 48th Floor
Los Angeles, California 90071
(213) 620-1780
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this registration statement becomes
effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
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The registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended, or until this
registration statement shall become effective on such date as the commission,
acting pursuant to said Section 8(a), may determine.
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum
Title of each class of Proposed Maximum Aggregate
securities to be Amount to be Offering Price Offering Amount of
registered Registered Per Unit(1) Price(1) Registration Fee
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7 1/8% Exchange Notes
due 2011(2)........... $ 750,000,000 100% $ 750,000,000 $187,500
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7 3/4% Exchange
Debentures due
2031(3)............... $ 750,000,000 100% $ 750,000,000 $187,500
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Guarantees of Northrop
Grumman Corporation and
Litton Industries, Inc.
with respect to the
Exchange Notes and
Exchange
Debentures(4)......... (5)
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TOTAL.................. $1,500,000,000 100% $1,500,000,000 $375,000(6)
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(1) Based on the book value of the securities as of the latest practicable date
pursuant to Rule 457(f)(2) under the Securities Act of 1933.
(2) The 7 1/8% Exchange Notes due 2011 being registered hereby are being
offered by us in exchange for our 7 1/8% Notes due 2011.
(3) The 7 3/4% Exchange Debentures due 2031 being registered hereby are being
offered by us in exchange for our 7 3/4% Debentures due 2031.
(4) The obligations of Northrop Grumman Systems Corporation under the Exchange
Notes and Exchange Debentures registered hereunder will be fully and
unconditionally guaranteed by Northrop Grumman Corporation and Litton
Industries, Inc. as described in the registration statement.
(5) Pursuant to Rule 457(n) under the Securities Act, no separate fee is
payable with respect to the guarantees of the Exchange Notes and Exchange
Debentures being registered.
(6) Pursuant to Rule 457(p) under the Securities Act, $375,000 of the filing
fee paid with respect to Registration Statement #333-78251 initially filed
by registrant Northrop Grumman Systems Corporation (formerly Northrop
Grumman Corporation) on May 11, 1999 is offset against the currently due
filing fee. No securities have been offered or sold pursuant to
Registration Statement #333-78251.
SUBJECT TO COMPLETION, DATED , 2001
PRELIMINARY PROSPECTUS
NORTHROP GRUMMAN SYSTEMS CORPORATION
(formerly Northrop Grumman Corporation)
OFFER TO EXCHANGE ITS
7 1/8 EXCHANGE NOTES DUE 2011 FOR ITS OUTSTANDING 7 1/8 NOTES DUE 2011
7 3/4% EXCHANGE DEBENTURES DUE 2031 FOR ITS OUTSTANDING 7 3/4% DEBENTURES DUE
2031
THE EXCHANGE NOTES AND EXCHANGE DEBENTURES TO BE UNCONDITIONALLY GUARANTEED BY
NORTHROP GRUMMAN CORPORATION
(formerly NNG, Inc.)
and
LITTON INDUSTRIES, INC.
The Exchange Securities:
. We hereby offer up to $750 million aggregate principal amount of our 7
1/8 Exchange Notes due 2011 in exchange for an equal aggregate principal
amount of our outstanding 7 1/8 Notes due 2011, and up to $750 million
aggregate principal amount of our 7 3/4% Exchange Debentures due 2031 in
exchange for an equal aggregate principal amount of our outstanding 7
3/4% Debentures due 2031.
. The terms of the Exchange Notes and Exchange Debentures are substantially
identical to the terms of the Outstanding Notes and Debentures for which
they are to be exchanged, except that the Exchange Notes and Debentures
will be free of restrictive legends and registration rights.
. The Exchange Notes and Exchange Debentures are direct senior unsecured
obligations and are equal in right of payment to any other existing and
future senior unsecured obligations of Northrop Grumman Systems
Corporation.
The Exchange Offer:
. The exchange offer will expire at 5:00 p.m., New York City time on ,
2001 unless extended by us.
. The exchange offer is subject to conditions, which we may waive.
. You may withdraw your tender of Outstanding Notes or Debentures at any
time before the expiration of the exchange offer.
. All Outstanding Notes and Debentures that are validly tendered and not
validly withdrawn will be exchanged for an equal principal amount of
Exchange Notes and Exchange Debentures that are registered under the
Securities Act of 1933.
. We will not receive any cash proceeds from the exchange offer.
The Outstanding Notes and Debentures listed above are referred to
collectively in this prospectus as the Outstanding Securities. The Exchange
Notes and Exchange Debentures we are offering in the exchange for the
Outstanding Securities are referred to collectively in this prospectus as the
Exchange Securities. The Exchange Securities and the Outstanding Securities are
referred to collectively in this prospectus as the Securities.
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Each broker-dealer that receives Exchange Securities for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of those Exchange Securities. The
letter of transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-
dealer in connection with resales of Exchange Securities received in exchange
for Outstanding Securities where such Outstanding Securities were acquired by
such broker-dealer as a result of market-making activities or other trading
activities. The issuers have agreed that, for a period of 180 days after the
expiration date of the exchange offer, it will make this prospectus available
to any broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is , 2001
TABLE OF CONTENTS
Page
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SUMMARY.................................................................... 3
WHERE YOU CAN FIND MORE INFORMATION........................................ 8
FORWARD-LOOKING STATEMENTS AND IMPORTANT FACTORS........................... 9
NORTHROP GRUMMAN........................................................... 11
THE LITTON ACQUISITION..................................................... 13
NEW CREDIT FACILITIES...................................................... 13
USE OF PROCEEDS............................................................ 14
CAPITALIZATION............................................................. 14
RATIO OF EARNINGS TO FIXED CHARGES......................................... 15
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA............................ 16
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA...................... 18
THE EXCHANGE OFFER......................................................... 22
DESCRIPTION OF THE SECURITIES.............................................. 29
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS........................... 43
PLAN OF DISTRIBUTION....................................................... 47
LEGAL MATTERS.............................................................. 48
EXPERTS.................................................................... 48
EXCHANGE AGENT............................................................. 48
SUMMARY
This summary highlights certain information appearing elsewhere in this
prospectus. This summary is not complete and does not contain all of the
information that you should consider before exchanging the Outstanding
Securities for the Exchange Securities. References to "Northrop Systems" refer
to Northrop Grumman Systems Corporation, formerly Northrop Grumman Corporation;
references to "Northrop Grumman" refer to Northrop Grumman Corporation,
formerly NNG, Inc.; references to "Litton" refer to Litton Industries, Inc.
Unless the context requires otherwise, references to "we," "us" or "our" refer
collectively to Northrop Grumman and its subsidiaries.
The Companies
Northrop Grumman
We are a leading global aerospace and defense company providing products and
services in defense and commercial electronics, systems integration,
information technology and non-nuclear shipbuilding and systems. Northrop
Grumman is a holding company formed in connection with the Litton acquisition.
Northrop Systems is a wholly-owned subsidiary of Northrop Grumman. Litton is a
97% owned subsidiary of Northrop Grumman.
Northrop Systems
Northrop Systems is a leading defense electronics, systems integration and
information technology company with strong capabilities in military aircraft
systems and modifications and marine systems. As a prime contractor, principal
subcontractor, partner, or preferred supplier, Northrop Systems participates in
many high-priority defense and commercial programs in the United States and
abroad.
Northrop Systems is aligned into three business sectors as follows:
The Integrated Systems Sector (ISS) is a leader in design, development and
production of airborne early warning, electronic warfare and surveillance and
battlefield management systems. ISS is the prime contractor for the Joint STARS
advanced airborne targeting and battle management system and the U.S. Air
Force's B-2 Spirit stealth bomber. ISS has a principal role in producing the
U.S. Navy's F/A-18 Hornet strike fighter, unmanned vehicles including The
Global Hawk, and the EA-6B Prowler electronic countermeasures aircraft, and is
upgrading the E-2C Hawkeye early warning aircraft.
The Electronic Sensors and Systems Sector (ES/3/) designs and manufactures a
wide variety of defense electronics and systems, airspace management systems,
precision weapons, marine systems, logistics systems, space systems, and
automation and information systems. Significant programs include fire control
radars for the F-16 and F-22 fighter aircraft and the Longbow Apache
helicopter, the AWACS airborne early warning radar, the Joint STARS air-to-
ground surveillance radar sensor, the Longbow Hellfire missile and the BAT
"brilliant" antiarmor submunition. ES3 also provides tactical military radars
and country-wide air defense systems, plus airborne electronic countermeasures
systems intended to jam enemy aircraft and weapons systems.
Logicon, Inc. is a leader in advanced information technologies, systems and
services. Logicon has extensive expertise in command, control, communications,
computers, intelligence, surveillance and reconnaissance (C4ISR). It is a key
management support element for major weapons systems, such as the U.S. Navy's
AEGIS class destroyer and also provides mission planning for the U.S. Navy, Air
Force and Special Operations Command. Logicon provides base operations support
for NASA's Kennedy Space Center, Cape Canaveral Air Station and Patrick Air
Force Base, among others. In addition, Logicon provides information technology
services to commercial customers and to the other Northrop Systems sectors.
3
Litton
Litton designs, builds and overhauls non-nuclear surface ships and is a
provider of defense and commercial electronics technology, components and
materials for government and commercial customers world wide. In addition,
Litton is a prime contractor to the U.S. Government for information technology
services and provides specialized information technology services to commercial
customers and governments in local and foreign jurisdictions.
The principal executive offices of Northrop Grumman, Northrop Systems and
Litton are located at 1840 Century Park East, Los Angeles, California 90067 and
their telephone number is (310) 553-6262.
The Litton Acquisition
On April 3, 2001, pursuant to the Offer to Purchase or Exchange all
outstanding shares of the Common Stock and Preferred Stock of Litton made by
Northrop Grumman, we purchased approximately 97.3% of the outstanding shares of
common stock of Litton and approximately 58.6% of the preferred stock of
Litton. The offer was made pursuant to an Amended and Restated Agreement and
Plan of Merger dated as of January 23, 2001 among Northrop Systems, Litton,
Northrop Grumman and LII Acquisition Corp. Pursuant to the plan of merger, a
subsidiary of Northrop Grumman will be merged into Litton and the remaining
holders of common shares of Litton will receive $80.00 in cash per common
share. Subsequently, another newly-organized subsidiary of Northrop Grumman
will be merged into Litton in a short-form merger and the remaining holders of
preferred shares will receive $35.00 in cash per preferred share. The value of
the Litton acquisition, when completed, is expected to be approximately $5.3
billion, which includes the assumption of Litton's approximately $1.4 billion
in net debt. We refer to these transactions as the Litton acquisition.
Summary of the Exchange Offer
The Exchange Offer...... In the exchange offer, Northrop Systems will issue:
. up to $750 million aggregate principal amount of
7 1/8% Exchange Notes due 2011 in exchange for an
equal aggregate principal amount of outstanding
7 1/8% Notes due 2011; and
. up to $750 million aggregate principal amount of
7 3/4% Exchange Debentures due 2031 in exchange for
an equal aggregate principal amount of outstanding
7 3/4% Debentures due 2031;
which Exchange Notes and Exchange Debentures will be
guaranteed by Northrop Grumman and Litton.
Resale.................. Based on an interpretation by the staff of the SEC
set forth in no-action letters issued to third
parties, we believe that, after issuance, the
Exchange Securities may be offered for resale, resold
and otherwise transferred by you (unless you are a
broker-dealer as discussed below) without compliance
with the registration and prospectus delivery
provisions of the Securities Act. The Outstanding
Securities, however, must have been acquired by you
in the ordinary course of your business and you must
have no arrangement or understanding with any person
to participate in the distribution of the Exchange
Securities.
Each broker-dealer that receives Exchange Securities
issued in this exchange offer for its own account in
exchange for Outstanding
4
Securities that were acquired as a result of market-
making or other trading activity must follow the
procedures set forth in the section of this
prospectus called "Plan of Distribution."
The exchange offer is not being made to, nor will
tenders be accepted from, holders of Outstanding
Securities in any jurisdiction in which this exchange
offer would not be in compliance with the securities
laws of such jurisdiction.
Expiration Date......... 5:00 p.m., New York City time, , 2001,
unless the exchange offer is extended. Any
extension, if made, will be publicly announced
through a release to PR Newswire and as otherwise
required by applicable law or regulations. We may
extend the expiration date in our sole and
absolute discretion.
Conditions to the
Exchange Offer......... The only conditions to the exchange offer are
that it not violate applicable law, any
applicable interpretation of the staff of the SEC
or any standing order or judgment. The exchange
offer is not conditioned upon any minimum
principal amount of Outstanding Securities being
tendered.
Procedures for
Tendering Outstanding
Securities............. If you wish to accept the exchange offer, you
must complete, sign and date the letter of
transmittal, or a facsimile copy, in accordance
with the instructions contained in this
prospectus and the letter of transmittal, and
mail or otherwise deliver the letter of
transmittal together with the Outstanding
Securities to be exchanged and any other required
documentation to The Chase Manhattan Bank.
Special Procedures for
Beneficial Owners...... If you are a beneficial owner whose Outstanding
Securities are registered in the name of a
broker, commercial bank, trust company or other
nominee, and you wish to tender in the exchange
offer, you should contact your registered holder
promptly and instruct the registered holder to
tender on your behalf.
Guaranteed Delivery
Procedures for
Outstanding
Securities............. If you wish to tender your Outstanding Securities
and they are not immediately available or you
cannot otherwise deliver your Outstanding
Securities and the required documentation to the
applicable exchange agent prior to the expiration
date, you may tender your Outstanding Securities
under a guaranteed delivery procedure. Under this
procedure, you must deliver to the exchange agent
a letter stating that a tender is being made and
guaranteeing that all the required documentation
will be delivered to the exchange agent within
three New York Stock Exchange trading days, and
then you must deliver your Outstanding Securities
and all other required documentation within that
time period.
5
Acceptance of
Outstanding Securities
and Delivery of
Exchange Securities.... Subject to certain qualifications, we will accept
for exchange any and all Outstanding Securities
which are properly tendered in the exchange offer
and not withdrawn, prior to 5:00 p.m., New York
City time, on the expiration date.
Withdrawal Rights....... Subject to the conditions set forth in this
prospectus, you may withdraw your tender of
Outstanding Securities at any time prior to 5:00
p.m., New York City time on the expiration date.
Certain United States
Federal Income Tax
Considerations.........
The exchange of Outstanding Securities for
Exchange Securities in the exchange offer does
not constitute a taxable exchange for federal
income tax purposes. Each Exchange Security will
be treated as having been originally issued as of
the date the Outstanding Security being exchanged
was originally issued. However, you should
consult your own tax advisor.
Paying and Exchange
Agent.................. The Chase Manhattan Bank, the trustee under the
Indenture, is serving as exchange agent and
paying agent with respect to the 7 1/8% Notes due
2011 and the 7 3/4% Debentures due 2031.
The Exchange Securities
The form and terms of each series of Exchange Securities will be the same as
the form and terms of the series of Outstanding Securities for which they are
exchanged, except that the Exchange Securities will be registered under the
Securities Act and, therefore, will not bear legends restricting their
transfer. The Exchange Securities will evidence the same debt as the
Outstanding Securities for which they are exchanged, and the Exchange
Securities will be entitled to the benefits of the Indenture. Upon consummation
of the exchange offer, any Outstanding Securities that are not exchanged for
Exchange Securities will not be entitled to further registration rights under
the registration rights agreement.
Maturity Dates:
7 1/8% Exchange Notes
due 2011............... February 15, 2011
7 3/4% Exchange
Debentures due 2031....
February 15, 2031
Guarantees.............. Northrop Grumman and Litton will fully and
unconditionally guarantee all the obligations of
Northrop Systems under the Exchange Securities.
Interest................ Interest on the Exchange Securities will accrue
from their date of issuance and will be paid on
the basis of a 360-day year comprised of twelve
30-day months. Interest on the Exchange
Securities will be payable semi-annually on
February 15 and August 15 of each year,
commencing August 15, 2001. Holders of
Outstanding Securities accepted for exchange will
be deemed to have waived the right to receive any
payments in respect of interest on the
Outstanding Securities accrued
6
from February 27, 2001 to the date of issuance of
the Exchange Securities and will receive interest
for that period pursuant to the Exchange
Securities.
Optional Redemption..... Northrop Systems may redeem all or part of the
Exchange Securities at any time at its option at a
redemption price equal to the greater of (1) the
principal amount of the Exchange Securities being
redeemed plus accrued and unpaid interest to the
redemption date or (2) the Make-Whole Amount for the
series of Exchange Securities being redeemed.
Make-Whole Amount....... "Make-Whole Amount" means the sum of the present
values of the principal amount of the Exchange
Securities to be redeemed, together with the
scheduled payments of interest (exclusive of interest
to the redemption date) from the redemption date to
the maturity date of the series of Exchange
Securities being redeemed, in each case discounted to
the redemption date on a semi-annual basis, assuming
a 360-day year consisting of twelve 30-day months, at
the Adjusted Treasury Rate, plus accrued and unpaid
interest on the principal amount of the Exchange
Securities being redeemed to the redemption date.
Ranking................. The Exchange Securities will be Northrop Systems'
senior unsecured obligations and will rank pari passu
with Northrop Systems' other existing and future
senior unsecured debt. The guarantees will be senior
unsecured obligations of Northrop Grumman and Litton
and will rank equally in right of payment with any
other existing and future senior unsecured debt of
each guarantor.
Limitation on Liens and
Restrictive
Covenants.............. The Indenture provides that neither Northrop Systems
nor its Restricted Subsidiaries will subject Northrop
Systems' Principal Properties to any mortgage or
other encumbrance securing indebtedness unless the
debt securities issued under the Indenture, including
the Exchange Securities, are secured equally with the
other indebtedness. The Indenture also contains
limitations on Northrop Systems' ability to enter
into certain sale and leaseback arrangements and
contains limitations on the issuance of indebtedness
by Northrop Systems' Restricted Subsidiaries. These
restrictive covenants are subject to exceptions
described in the Indenture.
Use of Proceeds......... We will not receive any cash proceeds from the
issuance of the Exchange Securities offered hereby.
In consideration for issuing the Exchange Securities
in exchange for the Outstanding Securities, we will
receive Outstanding Securities in like principal
amount. The Outstanding Securities surrendered in
exchange for the Exchange Securities will be retired
and cancelled.
The proceeds from the placement of the Outstanding
Securities were used by us to purchase Litton common
and preferred shares in the Litton acquisition.
For additional information regarding the Exchange Securities, see the
"Description of the Securities" section of this prospectus.
7
WHERE YOU CAN FIND MORE INFORMATION
Northrop Systems, Northrop Grumman and Litton have filed annual, quarterly
and current reports, proxy statements and other information with the SEC. You
may read and copy any such report, statement or other information at the SEC's
public reference rooms at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, Seven World Trade Center, Suite 1300, New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
You may obtain additional information about the public reference rooms by
calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a site on
the Internet at http://www.sec.gov that contains reports, proxy statements and
other information regarding issuers that file electronically with the SEC. You
may also read such reports, proxy statements and other documents at the
offices of the New York Stock Exchange at 20 Broad Street, New York, New York
10005.
We are "incorporating by reference" information into this prospectus. This
means that we are disclosing important information to you by referring you to
another document that has been filed separately with the SEC. The information
incorporated by reference is considered to be part of this prospectus.
Information that is filed with the SEC after the date of this prospectus will
automatically modify and supersede the information included or incorporated by
reference in this prospectus to the extent that the subsequently filed
information modifies or supersedes the existing information. We incorporate by
reference Northrop Systems', Northrop Grumman's and Litton's future filings
with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 until we complete the offering of the Exchange
Securities.
The following documents filed with the SEC by Northrop Systems are hereby
incorporated by reference:
. Annual Report on Form 10-K/A for the fiscal year ended December 31,
2000; and
. Current Report on Form 8-K dated and filed April 17, 2001.
The following documents filed with the SEC by Litton (SEC File Number 1-
3998) are hereby incorporated by reference:
. Annual Report on Form 10-K for the fiscal year ended July 31, 2000;
. Quarterly Reports on Form 10-Q for the fiscal quarters ended October
31, 2000 and January 31, 2001; and
. Current Reports on Form 8-K filed January 30, 2001 and April 17, 2001.
The following documents filed with the SEC by Northrop Grumman (SEC file
Number 1-16411) are hereby incorporated by reference:
. Current Report on Form 8-K dated and filed April 17, 2001; and
. Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2001.
You may request a copy of any of these filings at no cost by writing to or
telephoning us at the following address and telephone number: John H. Mullan,
Corporate Vice President and Secretary, 1840 Century Park East, Los Angeles,
California 90067, telephone (310) 201-3081.
We maintain an Internet site at http://www.northgrum.com. The information
contained at our Internet site is not incorporated by reference in this
prospectus, and you should not consider it a part of this prospectus.
Any statement made in this prospectus concerning the contents of any
contract, agreement or other document is only a summary of the actual
document. You may obtain a copy of any document summarized in this prospectus
at no cost by writing to or telephoning us at the address and telephone number
given above. Each statement regarding a contract, agreement or other document
is qualified in its entirety by reference to the actual document.
8
FORWARD-LOOKING STATEMENTS AND IMPORTANT FACTORS
Some of the information included in this prospectus and in the documents
incorporated by reference are forward-looking statements within the meaning of
the securities laws. These statements concern our plans, expectations and
objectives for future operations. These include statements and assumptions with
respect to expected future revenues, margins, program performance, earnings and
cash flows, acquisitions of new contracts, the outcome of competitions for new
programs, the outcome of contingencies including litigation and environmental
remediation, the effect of completed and planned acquisitions and divestitures
of businesses or business assets, the anticipated costs of capital investments,
and anticipated industry trends. Our actual results and trends may differ
materially from the information, statements and assumptions as described, and
actual results could be materially less than our planned results.
Important factors that could cause actual results to differ materially from
those suggested by the forward-looking statements include:
. We depend on a limited number of customers. We are heavily dependent on
government contracts many of which are only partially funded; the
termination or failure to fund one or more significant contracts could
have a negative impact on our operations. We are a supplier, either
directly or as a subcontractor or team member, to the U.S. Government
and its agencies as well as foreign governments and agencies. These
contracts are subject to each customers' political and budgetary
constraints, changes in short-range and long-range plans, the timing of
contract awards, the congressional budget authorization and
appropriation processes, the government's ability to terminate
contracts for convenience or for default, as well as other risks such
as contractor debarment in the event of certain violations of legal and
regulatory requirements.
. Many of our contracts are fixed price contracts. While firm, fixed
price contracts allow us to benefit from cost savings, they also expose
us to the risk of cost overruns. If our initial estimates used for
calculating the contract price are incorrect, we can incur losses on
those contracts. In addition, some of our contracts have provisions
relating to cost controls and audit rights and if we fail to meet the
terms specified in those contracts then we may not realize their full
benefits. Our ability to manage costs on these contracts may effect our
financial condition. Lower earnings caused by cost overruns and cost
controls would have an adverse effect on our financial results.
. We are subject to significant competition. Our markets include defense
and commercial areas where we compete with companies of substantial
size and resources. Our success or failure in winning new contracts or
follow on orders for our existing or future products may cause material
fluctuations in our future revenues and operating results.
. Our operations may be subject to events that cause adverse effects on
our ability to meet contract obligations within anticipated cost and
time parameters. We may encounter internal problems and delays in
delivery as a result of issues with respect to design, technology,
licensing and patent rights, labor or materials and components that
prevent us from achieving contract requirements. We may be affected by
delivery or performance issues with key suppliers and subcontractors,
as well as other factors inherent in our businesses which may cause
operating results to be adversely affected. Changes in inventory
requirements or other production cost increases may also have a
negative impact on our operating results.
. We must integrate our acquisitions successfully. Acquiring businesses
is a significant challenge. If we do not execute our acquisition and
integration plans for these businesses in accordance with our strategic
timetable, our operating results may be adversely affected. We acquired
several businesses in 2000 and we have acquired Litton. We believe our
integration processes are well-suited to achieve the anticipated
strategic and operating benefits of these acquisitions, but if we do
not perform our plans as intended, or if we encounter unforeseen
problems in the acquired businesses, or problems in those businesses
develop subsequent to acquisition, our operating results may be
adversely affected. Among the factors that may be involved would be
unforeseen costs and expenses, previously undisclosed
9
liabilities, diversion of management focus, and any effects of complying
with government-imposed organizational conflicts of interest rules as a
result of the acquisitions.
. We rely on continuous innovation. We are dependent upon our ability to
anticipate changing needs for defense products, military and civilian
electronic systems and support, and information technology. Our success
is dependent on designing new products which will respond to such
requirements within customers' price limitations.
. We face significant challenges in the international marketplace. Our
international business is subject to changes in import and export
policies, technology transfer restrictions, limitations imposed by
United States law that are not applicable to our foreign competitors,
and other legal, financial and governmental risks.
. We assume that any divestiture of non-core businesses and assets will
be completed successfully. Our performance may be affected by our
inability to successfully dispose of assets and businesses that do not
fit with or are no longer appropriate to our strategic plan. If any
sales of such businesses or assets can only be made at a loss, our
earnings will be negatively impacted.
. We are subject to environmental and other liabilities. Our performance
may be affected by known environmental risks, pending litigation and
other loss contingencies, if not resolved within the parameters of our
internal plans, and by unanticipated environmental or other
liabilities.
. Our pension income may fluctuate. Pension income, a non-cash item which
is included in our earnings, is based on assumptions of market
performance and actual performance may differ. If an event causes us to
revalue our pension income during the calendar year, the portion of our
earnings attributed to pension income could vary significantly.
. Our indebtedness, incurred in connection with the Litton acquisition,
is higher than our indebtedness at December 31, 2000. The increase in
debt will increase demands on our cash resources.
Additional information with respect to risks and uncertainties in our
business is contained in our SEC filings, including, without limitation,
Northrop Systems' Annual Report on Form 10-K/A for the year ended December 31,
2000 and Northrop Grumman's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2001.
Accordingly, you should not rely on the accuracy of predictions contained in
forward-looking statements. These statements speak only as of the date of this
prospectus, or, in the case of documents incorporated by reference, the date of
those documents. We cannot undertake any obligation to update our forward-
looking statements to reflect events, circumstances, changes in expectations or
the occurrence of unanticipated events occurring after the date of those
statements.
10
NORTHROP GRUMMAN
We are a leading global aerospace and defense company providing products and
services in defense and commercial electronics, systems integration,
information technology and non-nuclear shipbuilding and systems. As a prime
contractor, principal subcontractor, partner, or preferred supplier, we
participate in many high-priority defense and commercial technology programs in
the United States and abroad.
Business Segments
Northrop Systems is aligned into three business sectors: the Integrated
Systems Sector, based in Dallas, Texas; the Electronic Sensors and Systems
Sector, headquartered in Baltimore, Maryland; and Logicon, Inc., based in
Herndon, Virginia.
The Integrated Systems Sector (ISS) is a leader in design, development and
production of airborne early warning, electronic warfare and surveillance and
battlefield management systems. ISS is the prime contractor for the Joint STARS
advanced airborne targeting and battle management system and the U.S. Air
Force's B-2 Spirit stealth bomber. ISS has a principal role in producing the
U.S. Navy's F/A-18 Hornet strike fighter. The sector also produces the EA-6B
Prowler electronic countermeasures aircraft and is upgrading the E-2C Hawkeye
early-warning aircraft. We have a principal role in the Global Hawk program, a
development stage integrated unmanned aerial vehicle for reconnaissance and
surveillance. We are also a principal subcontractor to Lockheed Martin in the
joint strike fighter competition, a competition expected to be decided in 2001.
The Electronic Sensors and Systems Sector (ES/3/) designs, develops and
manufactures a wide variety of defense electronics and systems, airspace
management systems, precision weapons, marine systems, logistic systems, space
systems, and automation and information systems. These include fire control
radars for the F-16 fighter aircraft, the F-22 fighter aircraft, and the
Longbow Apache helicopter. Other key programs include the AWACS airborne early
warning radar, the Joint STARS air-to-ground surveillance radar sensor, the
Longbow Hellfire missile and the BAT "brilliant" antiarmor submunition. ES/3/
also provides tactical military radars and countrywide air defense systems, as
well as airborne electronic countermeasures systems intended to jam enemy
aircraft and weapons systems. ES/3/ is a world leader in airspace management as
a producer of civilian air traffic control systems. The sector also makes
sophisticated undersea warfare systems, and naval propulsion and power
generation systems. Additionally, ES/3/ provides postal automation, image
processing, material management, asset track and trace, and data communication
systems.
Logicon, Inc. is a leader in advanced information technologies, systems and
services. Logicon is the prime contractor with the General Services
Administration ANSWER and Millennia programs. Logicon is also part of a team
working with the Internal Revenue Service to modernize the nation's tax system.
Logicon has extensive expertise in command, control, communications, computers,
intelligence, surveillance and reconnaissance (C4ISR). It is a key management
support element for major weapons systems, such as the U.S. Navy's AEGIS class
destroyer as well as mission planning for the U.S. Navy, Air Force and Special
Operations Command. Logicon provides base operations support for NASA's Kennedy
Space Center, Cape Canaveral Air Station and Patrick Air Force Base, among
others. In addition, Logicon provides information technology services to
commercial customers and to the other Northrop Systems sectors.
Litton will initially constitute a separate business segment. Litton
designs, builds and overhauls non-nuclear surface ships and is a provider of
defense and commercial electronics technology, components and materials for
government and commercial customers worldwide. In addition, Litton is a prime
contractor to the U.S. Government for information technology services and
provides specialized information technology services to commercial customers
and governments in local and foreign jurisdictions. We plan to integrate Litton
operations other than ship systems and electronic components into the existing
Northrop Systems business segments during 2001 and expect to operate in five
segments when this integration is accomplished.
11
Strategy
We expect the Litton acquisition to further strengthen the position of the
combined company as a leader in the defense industry as it pursues the
following business strategies:
. Transforming the combined company into a systems integrator, defense
electronics leader and information technology provider;
. Positioning the combined company to meet the emerging defense needs of
the United States and foreign allied governments;
. Reinforcing leading competitive positions in niche markets:
. Key business areas with significant growth prospects;
. Growth positions in niche business areas;
. Preferred contracts as a systems integrator, principal subcontractor,
teammate or preferred supplier;
. Enhancing the combined company's importance to customers; and
. Diversifying the combined company's program positions and sources of
revenues.
Recent Acquisition and Disposition History
Strategic acquisitions have played a critical role in our transformation to
a leading diversified technology company to the U.S. Department of Defense. In
1992 we acquired 49% of Vought Aircraft Company. In 1994 we made the first of
our major acquisitions by purchasing Grumman Corporation and we also acquired
the remaining 51% of Vought. This was followed by the acquisition of the
defense electronic systems group of Westinghouse Electric Corporation in 1996.
In August 1997, we consummated our merger with Logicon, Inc.
Since 1997, we have continued to sharpen our focus through several smaller
significant strategic acquisitions as well as the divestiture of non-core
businesses. In 1998, we acquired Inter-National Research Institute Inc. (INRI).
In 1999, we acquired the Information Systems Division of California Microwave,
Inc., Data Procurement Corporation (DPC), and Ryan Aeronautical, an operating
unit of Allegheny Teledyne Inc. In 2000, we acquired Navia Aviation SA, Comptek
Research, Federal Data Corporation and Sterling Software FSG. Also in 2000, we
divested our Commercial Aerostructures business, which generated $1.38 billion
in net sales in 1999. In April 2001 we acquired Litton. See "The Litton
Acquisition" for more information on the Litton acquisition.
In April, 2001, we announced that we had signed a definitive agreement to
acquire the Electronics and Information Systems Group of Aerojet-General
Corporation for $315 million in cash. This Aerojet General unit had year 2000
revenues of approximately $323 million and specialized in space-borne sensing
for early warning systems, ground systems that process data from space-based
platforms and smart weapons technology for U.S. Government national security
programs. Completion of this transaction is subject to conditions including
antitrust review.
On May 9, 2001, we announced our intention to offer to acquire Newport News
Shipbuilding for $67.50 per share for all of the outstanding shares of common
stock of Newport News, payable 75% in our stock and the remainder in cash. Our
exchange offer is subject to various conditions including the acceptance of our
offer by at least a majority of the Newport News shareholders, the termination
of the definitive acquisition agreement between Newport News and General
Dynamics, the execution of a definitive merger agreement with Newport News and
the receipt of regulatory approvals.
Overview of the Defense Industry
The defense requirements of the United States and NATO countries have
shifted from defending against threats imposed by the former Soviet Union to a
focus upon the management of one or more regional conflicts. These engagements
may require unilateral or cooperative initiatives, ranging from passive
surveillance to active engagement, deterrence, policing or peacekeeping. In
addition, the Department of Defense's strategy has been
12
impacted by the general public's increasing intolerance for military action
which puts military or civilian personnel at risk. As a result of these trends,
both the United States and NATO countries are increasingly relying on
sophisticated weapon systems which provide long-range surveillance and
intelligence, battle management and precision strike capabilities. Accordingly,
defense procurement spending is expected to be weighted towards the development
and procurement of advanced electronics and software that enhance the
capabilities of individual weapons systems and provide for the real-time
integration of individual surveillance, information management, strike and
battle management platforms.
United States defense contractors have also been influenced by two trends in
defense spending over recent years. First, following a period of budget
decreases in the post-Cold War era, the aggregate U.S. defense budget, as
appropriated by Congress, has increased for each of the past five years.
Second, equipment procurement and research and development spending have grown
more quickly than the overall defense budget over this same period and have
become an increasingly large portion of the overall budget as the Pentagon has
focused on the development and procurement of these next generation smart
weapons systems. Defense spending by other NATO countries has stabilized,
following decreases in the immediate post-Cold War era, while they continue to
increase their focus upon the development and procurement of advanced
electronics and information systems capabilities.
THE LITTON ACQUISITION
On April 3, 2001, pursuant to the Offer to Purchase or Exchange all
outstanding shares of the Common Stock and Preferred Stock of Litton made by
Northrop Grumman, Northrop Grumman purchased approximately 97.3% of the
outstanding shares of common stock of Litton and approximately 58.6% of the
preferred stock of Litton. The offer was made pursuant to Registration
Statement No. 333-54800 which became effective on March 28, 2001, and the
Amended and Restated Agreement and Plan of Merger dated as of January 23, 2001
among Northrop Systems, Litton, Northrop Grumman and LII Acquisition Corp.
Pursuant to the plan of merger, a subsidiary of Northrop Grumman will be merged
into Litton and the remaining holders of common shares of Litton will receive
$80.00 in cash per common share. Subsequently, another newly-organized
subsidiary of Northrop Grumman will be merged into Litton in a short-form
merger and the remaining holders of preferred shares will receive $35.00 in
cash per preferred share. The value of the Litton acquisition, when completed,
is expected to be approximately $5.3 billion, which includes the assumption of
Litton's approximately $1.4 billion in net debt. The consideration for the
common stock and preferred stock included cash, common stock of Northrop
Grumman and preferred stock of Northrop Grumman. Northrop Grumman obtained the
cash portion of the purchase price from the offering of the Outstanding
Securities and from advances under the New Credit Facilities.
NEW CREDIT FACILITIES
We have entered into unsecured senior credit facilities with lenders which
initially provided for borrowings of up to $5 billion (the "New Credit
Facilities"). The New Credit Facilities consist of a $2.5 billion five-year
revolving credit facility and a $2.5 billion 364-day revolving credit facility.
The availability under the 364-day revolving credit facility, as reduced by the
equity and other debt financing of the Litton acquisition, is now $527 million.
Borrowings under the New Credit Facilities along with the net proceeds of the
offering of the Outstanding Securities were used to finance the purchase of
shares in the Litton acquisition, to pay related expenses, and to retire and
refinance a portion of the former Litton debt. The New Credit Facilities will
be available to finance our continuing operations. Borrowings under the New
Credit Facilities will bear interest, at our option, at various rates of
interest, including adjusted LIBOR or an alternate base rate plus in each case
an incremental margin based on our credit rating. The New Credit Facilities
also provide for a facility fee on the daily aggregate amount of commitments
under the revolving facilities (whether or not utilized). The facility fee is
also based on our credit rating level. Northrop Grumman, Northrop Systems and
Litton are all co-borrowers on the New Credit Facilities.
13
USE OF PROCEEDS
Northrop Systems will not receive any cash proceeds from the issuance of the
Exchange Securities offered hereby. In consideration for issuing the Exchange
Securities in exchange for the Outstanding Securities, Northrop Systems will
receive Outstanding Securities in like principal amount. The Outstanding
Securities surrendered in exchange for the Exchange Securities will be retired
and cancelled. The proceeds from the placement of the Outstanding Securities
were used to purchase Litton common and preferred shares in the Litton
acquisition.
CAPITALIZATION
The following table sets forth:
. our capitalization as of March 31, 2001, and
. our capitalization as adjusted to reflect the Litton acquisition and the
New Credit Facilities.
The as adjusted pro forma amounts have been developed from (1) the unaudited
consolidated financial statements of Northrop Grumman contained in our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, which is
incorporated by reference in this prospectus and (b) the unaudited consolidated
financial statements for the period ended January 31, 2001 contained in
Litton's Quarterly Report on Form 10-Q which is incorporated by reference in
this prospectus. See "Unaudited Pro Forma Condensed Combined Financial Data."
As of March 31, 2001
--------------------------
As adjusted for the
Litton acquisition
and the New
Actual Credit Facilities
------ -------------------
Current portion of long-term debt................ $ -- $ 184
Long-term debt:
Notes and Debentures--Northrop Systems......... 3,100 3,100
Notes, Debentures and Bonds--Litton............ -- 1,184
Other.......................................... 5 114
Long Term Revolver............................. -- 882
Total long-term debt, less current maturities.... 3,105 5,280
Mandatorily redeemable preferred stock........... -- 350
Total debt....................................... 3,105 5,814
Shareholders' equity............................. 4,007 5,130
Total capitalization......................... $7,112 $10,944
14
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges of
Northrop Systems and Northrop Grumman for each of the fiscal years ended
December 31, 1996 through December 31, 2000 and for the three months ended
March 31, 2001 and the pro forma combined ratios of earnings to fixed charges
of Northrop Systems and Litton for the year ended December 31, 2000 and for
Northrop Grumman and Litton for the three months ended March 31, 2001.
The pro forma ratios of earnings to fixed charges are based upon the
historical financial statements of Northrop Systems, Northrop Grumman and
Litton adjusted to give effect to the Litton acquisition. The pro forma amounts
have been developed from (a) the audited consolidated financial statements of
Northrop Systems contained in Northrop Systems' Annual Report on Form 10-K/A
for the fiscal year ended December 31, 2000 and the unaudited consolidated
financial statements of Northrop Grumman contained in our Quarterly Report on
Form 10-Q for the fiscal quarter ended March 31, 2001, which are incorporated
by reference in this prospectus, and (b) the audited consolidated financial
statements contained in Litton's Annual Report on Form 10-K for the fiscal year
ended July 31, 2000 and from the unaudited consolidated financial statements
contained in Litton's Quarterly Report on Form 10-Q for the six months ended
January 31, 2001, incorporated by reference in this prospectus. In addition,
the audited consolidated financial statements contained in Litton's Annual
Report on Form 10-K for the fiscal year ended July 31, 1999 and the unaudited
consolidated financial statements of Litton contained in Litton's Quarterly
Report on Form 10-Q for the period ended January 31, 2001 have been used to
bring the financial reporting periods of Litton to within 90 days of those of
Northrop Systems and Northrop Grumman.
Pro Forma Actual
------------------------------------------------------------------
Three Months Fiscal Year
Ended Ended Three Months
March 31, December 31, Ended
2001 2000 March 31 Year Ended December 31
------------ ------------ ------------- ------------------------
2001 2000 2000 1999 1998 1997 1996
------ ------ ---- ---- ---- ---- ----
2.09 2.76 3.67 5.26 5.26 3.78 2.11 2.68 2.50
For purposes of computing the ratios of earnings to fixed charges, earnings
represent earnings from continuing operations before income taxes and fixed
charges, and fixed charges consist of interest expense, the portion of rental
expense calculated to be representative of the interest factor, amortization of
discounts and capitalized expenses related to indebtedness, and preferred stock
dividends. The ratios should be read in conjunction with the financial
statements and other financial data included or incorporated by reference in
this prospectus. See "Where You Can Find More Information."
15
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
Northrop Grumman and Northrop Systems
The following table sets forth selected consolidated financial data for
Northrop Systems and Northrop Grumman for each of the periods indicated.
Consolidated financial data for the years ended December 31, 2000, 1999, 1998
and 1997 have been derived from, and are qualified by reference to, the audited
consolidated financial statements and notes thereto filed by us with the SEC,
which are incorporated in this prospectus by reference. Consolidated financial
data for the year ended December 31, 1996 and for the three months ended March
31, 2001 and 2000 have been derived from unaudited consolidated financial
statements and notes thereto of Northrop Systems and Northrop Grumman. This
data does not give effect to the Litton acquisition or the New Credit
Facilities. See also "Where You Can Find More Information" and "Unaudited Pro
Forma Condensed Combined Financial Data."
Three Months
Ended
March 31, Year ended December 31,
--------------- ----------------------------------------
2001 2000 2000 1999 1998 1997 1996
------- ------ ------- ------ ------ ------ -------
(in millions, except per share)
Operating data:
Net sales............. $ 1,986 $1,802 $ 7,618 $7,616 $7,367 $7,798 $ 7,667
Operating margin...... 190 287 1,098 954 752 741 752
Interest expense
(net)................ (32) (44) (146) (206) (221) (240) (261)
Income from continuing
operations before
accounting changes... 103 156 625 474 193 318 330
Diluted earnings per
share from continuing
operations before
accounting change.... $ 1.42 $ 2.23 $ 8.82 $ 6.80 $ 2.78 $ 4.67 $ 5.18
Cash dividends per
common share......... .40 .40 1.60 1.60 1.60 1.60 1.60
Balance sheet data:
Total assets.......... $11,185 $9,389 $ 9,622 $9,285 $9,536 $9,677 $ 9,645
Net working capital... 1,382 269 (162) 329 666 221 106
Total debt............ 3,105 2,095 1,615 2,225 2,831 2,791 3,378
Shareholders' equity.. 4,007 3,409 3,919 3,257 2,850 2,623 2,282
Other data:
Net cash from
operations........... $ (33) $ 91 $ 1,010 $1,207 $ 244 $ 730 $ 743
Funded order backlog.. 10,320 8,156 10,106 8,499 8,415 9,700 10,451
Depreciation and
amortization......... 99 87 381 353 359 380 340
Earnings before
interest, taxes,
depreciation and
amortization
(EBITDA)(a).......... 291 374 1,502 1,306 889 1,132 1,079
- --------
(a) We calculated EBITDA by adding back net interest expense and depreciation
and amortization expense to income from continuing operations before taxes
and accounting change. Since all companies do not calculate EBITDA or
similarly titled financial measures in the same manner, disclosures by
other companies may not be comparable with EBITDA as defined herein. EBITDA
is a financial measure used by analysts to value companies. Therefore, our
management believes that the presentation of EBITDA provides relevant
information to investors. EBITDA should not be construed as an alternative
to operating income or cash flows from operating activities as determined
in accordance with United States generally accepted accounting principles
("GAAP") or as a measure of liquidity. Amounts reflected as EBITDA are not
necessarily available for discretionary use as a result of restrictions
imposed by applicable law upon the payment of dividends or distributions,
among other things.
16
Litton Industries, Inc.
The following is a summary of selected consolidated financial data of Litton
for each of the years in the five-year period ended July 31, 2000 and the six-
month periods ended January 31, 2001 and January 31, 2000. The operating
results for the six months ended January 31, 2001 are not necessarily
indicative of results for the full fiscal year ended July 31, 2001. This
information is derived from the audited consolidated financial statements of
Litton contained in its Annual Report on Form 10-K for the fiscal year ended
July 31, 2000, the unaudited consolidated financial statements of Litton
contained in its Quarterly Report on Form 10-Q for the period ended January 31,
2001, and from Litton's Quarterly Report on Form 10-Q for the period ended
January 31, 2000, and is qualified in its entirety by such documents. See
"Where You Can Find More Information." You should read this summary together
with the financial statements which are incorporated by reference in this
prospectus and their accompanying notes and in conjunction with management's
discussion and analysis of operations and financial conditions of Litton
contained in such reports.
Six months
ended January
31, Year ended July 31,
------------- ----------------------------------
2001 2000 2000 1999 1998 1997 1996
------ ------ ------ ------ ------ ------ ------
($ in millions, except per share)
Operating data:
Sales and service
revenues.................. $2,758 $2,720 $5,588 $4,828 $4,400 $4,176 $3,612
Total segment operating
profit.................... 245 238 562 339 410 370 320
Interest expense (net)..... 52 55 108 67 52 44 14
Income before accounting
change.................... 95 90 221 121 181 162 151
Diluted earnings per share
before accounting change.. $ 2.03 $ 1.93 $ 4.80 $ 2.58 $ 3.82 $ 3.40 $ 3.15
Cash dividends per common
share..................... 0 0 0 0 0 0 0
Balance sheet data:
Total assets............... $4,908 $4,967 $4,836 $4,260 $4,114 $3,545 $3,454
Net working capital........ 597 321 500 295 164 163 107
Total debt................. 1,477 1,690 1,399 1,033 1,046 680 787
Total stockholders'
investment................ 1,611 1,385 1,496 1,300 1,187 1,039 917
Other Data:
Net cash from operations... $ 20 $ (16) $ 250 $ 244 $ 228 $ 223 $ 70
Depreciation and
amortization.............. 92 96 190 161 148 138 114
Earnings before interest,
taxes, depreciation and
amortization (EBITDA)(a).. 304 302 683 441 502 452 381
- --------
(a) We calculated EBITDA by adding back net interest expense and depreciation
and amortization expense to income from continuing operations before taxes
and accounting change. Since all companies do not calculate EBITDA or
similarly titled financial measures in the same manner, disclosures by
other companies may not be comparable with EBITDA as defined herein. EBITDA
is a financial measure used by analysts to value companies. Therefore, our
management believes that the presentation of EBITDA provides relevant
information to investors. EBITDA should not be construed as an alternative
to operating income or cash flows from operating activities as determined
in accordance with GAAP or as a measure of liquidity. Amounts reflected as
EBITDA are not necessarily available for discretionary use as a result of
restrictions imposed by applicable law upon the payment of dividends or
distributions, among other things.
17
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The Unaudited Pro Forma Condensed Combined Financial Data presented below is
derived from the historical consolidated financial statements of each of
Northrop Systems, Northrop Grumman and Litton. The Unaudited Pro Forma
Condensed Combined Financial Data is prepared using the purchase method of
accounting, with Northrop Grumman treated as the acquiror and as if the Litton
acquisition had been completed as of the beginning of the periods presented for
statements of operations purposes and on March 31, 2001 for balance sheet
purposes.
For a summary of the business combination, see "The Litton Acquisition."
The Unaudited Pro Forma Condensed Combined Financial Data is based upon the
historical financial statements of Northrop Systems, Northrop Grumman and
Litton adjusted to give effect to the Litton acquisition. The pro forma
adjustments are described in the accompanying notes presented on the following
pages. The pro forma statements have been developed from (a) the audited
consolidated financial statements of Northrop Systems contained in the Annual
Report on Form 10-K/A for the year ended December 31, 2000 and the unaudited
consolidated financial statements of Northrop Grumman contained in the
Quarterly Report on Form 10-Q for the three months ended March 31, 2001, which
are incorporated by reference in this prospectus, and (b) the audited
consolidated financial statements contained in Litton's Annual Report on Form
10-K for the fiscal year ended July 31, 2000 and the unaudited consolidated
financial statements of Litton contained in its Quarterly Report on Form 10-Q
for the period ended January 31, 2001, which are incorporated by reference in
this prospectus. In addition, the audited consolidated financial statements
contained in Litton's Annual Report on Form 10-K for the fiscal year ended July
31, 1999 and the unaudited consolidated financial statements of Litton
contained in Litton's Quarterly Report on Form 10-Q for the period ended
January 31, 2001 have been used to bring the financial reporting periods of
Litton to within 90 days of those of Northrop Systems and Northrop Grumman.
The final determination and allocation of the purchase price paid for the
Litton acquisition may differ from the amounts assumed in this Unaudited Pro
Forma Condensed Combined Financial Data.
Under the purchase method of accounting, the purchase price will be
allocated to the underlying tangible and intangible assets and liabilities
acquired based on their respective fair market values, with the excess recorded
as goodwill. As of the date of this prospectus, Northrop Grumman has not
completed the valuation studies necessary to arrive at the required estimates
of the fair market value of the assets and liabilities to be acquired and the
related allocations of purchase price, nor has it identified the adjustments
necessary, if any, to conform Litton data to Northrop Grumman's accounting
policies. Accordingly, Northrop Grumman has used the historical book values of
the assets and liabilities of Litton and has used the historical revenue
recognition policies of Litton to prepare the unaudited pro forma financial
statements set forth herein, with the excess of the purchase price over the
historical net assets of Litton recorded as goodwill and other purchased
intangibles. Once Northrop Grumman has completed the valuation studies
necessary to finalize the required purchase price allocation and identified any
necessary conforming changes, such pro forma financial statements will be
subject to adjustment. Such adjustments will likely result in changes to the
pro forma statement of financial position to reflect the final allocation of
purchase price and the pro forma statement of income, and there can be no
assurance that such adjustments will not be material.
The Unaudited Pro Forma Condensed Combined Financial Data is provided for
illustrative purposes only and does not purport to represent what the actual
consolidated results of operations or the consolidated financial position of
Northrop Grumman would have been had the offer and the Litton acquisition
occurred on the date assumed, nor is it necessarily indicative of future
consolidated results of operations or financial position.
The Unaudited Pro Forma Condensed Combined Financial Data does not include
the realization of cost savings from operating efficiencies, synergies or other
restructurings resulting from the Litton acquisition.
The Unaudited Pro Forma Condensed Combined Financial Data should be read in
conjunction with the separate historical consolidated financial statements and
accompanying notes of Northrop Systems, Northrop Grumman and Litton that are
incorporated by reference in this prospectus.
18
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF FINANCIAL POSITION
March 31, 2001
($ in millions)
Pro
Northrop Pro Forma Forma
Grumman Litton Adjustments Combined
-------- ------ ----------- --------
ASSETS
Current assets
Cash and cash equivalents............ $ 1,636 $ 74 $(1,500)(a) $ 210
Accounts receivable.................. 1,493 794 2,287
Inventoried costs.................... 749 784 1,533
Deferred income taxes................ 22 372 394
Prepaid expenses..................... 66 33 99
------- ------ ------- -------
Total current assets............... 3,966 2,057 (1,500) 4,523
------- ------ ------- -------
Property, plant and equipment.......... 2,370 1,860 4,230
Accumulated depreciation............... (1,356) (990) (2,346)
------- ------ ------- -------
1,014 870 -- 1,884
------- ------ ------- -------
Other assets
Goodwill and other purchased
intangibles......................... 4,380 1,230 2,244 (a) 7,854
Prepaid retiree benefits cost and
intangible pension asset............ 1,469 1,469
Other assets......................... 356 751 1,107
------- ------ ------- -------
6,205 1,981 2,244 10,430
------- ------ ------- -------
$11,185 $4,908 $ 744 $16,837
======= ====== ======= =======
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities
Notes payable and current portion of
long term debt...................... $ -- $ 184 $ -- $ 184
Accounts payable..................... 491 310 801
Accrued employees' compensation...... 325 226 551
Advances on contracts................ 468 204 672
Income taxes......................... 769 62 831
Other current liabilities............ 531 474 1,005
------- ------ ------- -------
Total current liabilities.......... 2,584 1,460 4,044
------- ------ ------- -------
Long-term debt......................... 3,105 1,293 882 (a) 5,280
Accrued retiree benefits............... 1,108 303 1,411
Deferred tax and other long-term
liabilities........................... 381 241 622
Redeemable Preferred Stock............. -- -- 350 (a) 350
Shareholders' equity
Paid in Capital...................... 1,214 413 710 (a) 2,337
Retained earnings.................... 2,817 1,254 (1,254)(a) 2,817
Accumulated other comprehensive
loss................................ (24) (56) 56 (a) (24)
------- ------ ------- -------
4,007 1,611 (488) 5,130
------- ------ ------- -------
$11,185 $4,908 $ 744 $16,837
======= ====== ======= =======
19
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
Year Ended December 31, 2000
($ in millions, except per share data)
Northrop Pro Forma Pro Forma
Grumman Litton Adjustments Combined
-------- ------ ----------- ---------
Sales and service revenues............ $7,618 $5,626 $ -- $13,244
Cost of sales
Operating Costs..................... 5,446 4,669 83(b) 10,198
Administrative and general
expenses........................... 1,074 491 -- 1,565
------ ------ ----- -------
Operating margin...................... 1,098 466 (83) 1,481
Interest expense...................... (175) (105) (190)(c) (470)
Other, net............................ 52 16 -- 68
------ ------ ----- -------
Income from continuing operations
before income taxes.................. 975 377 (273) 1,079
Federal and foreign income taxes...... 350 151 (96)(d) 405
------ ------ ----- -------
Income from continuing operations..... $ 625 $ 226 $(177) $ 674
====== ====== ===== =======
Less, dividends paid to preferred
shareholders......................... (25)(e) (25)
Income available to common
shareholders......................... $(202) $ 649
===== =======
Average shares basic.................. 70.58 83.58
Average shares diluted................ 70.88 84.00
Basic earnings per share:
Continuing operations............... $ 8.86 $ 7.77
Diluted earnings per share:
Continuing operations............... $ 8.82 $ 7.73
Quarter ended March 31, 2001
($ in millions, except per share data)
Northrop Pro Forma Pro Forma
Grumman Litton Adjustments Combined
-------- ------ ----------- ---------
Sales and service revenues............ $1,986 $1,345 $-- $3,331
Cost of sales
Operating Costs..................... 1,548 1,120 21(b) 2,689
Administrative and general
expenses........................... 248 121 -- 369
------ ------ ---- ------
Operating margin...................... 190 104 (21) 273
Interest expense...................... (47) (27) (46)(c) (120)
Other, net............................ 17 3 -- 20
------ ------ ---- ------
Income from continuing operations
before income taxes.................. 160 80 (67) 173
Federal and foreign income taxes...... 57 30 (23)(d) 64
------ ------ ---- ------
Income from continuing operations..... $ 103 $ 50 $(44) $ 109
====== ====== ==== ======
Less, dividends paid to preferred
shareholders......................... (6)(e) (6)
Income available to common
shareholders......................... $(50) $ 103
==== ======
Average shares basic.................. 72.19 85.19
Average shares diluted................ 72.76 86.01
Basic earnings per share:
Continuing operations............... $ 1.43 $ 1.21
Diluted earnings per share:
Continuing operations............... $ 1.42 $ 1.20
20
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited)
(a) Adjustments to (i) eliminate the equity of Litton (ii) record issuance of
preferred and common stock and (iii) record new financing for the Litton
acquisition along with additional acquisition related costs and refinancing
of debt using the New Credit Facilities.
(b) Adjustment to amortize goodwill and other purchased intangible assets
arising out of the Litton acquisition over an estimated weighted average
life of 27 years on a straight line basis.
(c) Adjustment to record interest on new financing for the Litton acquisition
at an annual weighted average rate of 7.20 and 7.52 percent for the quarter
ended March 31, 2001 and the year ended December 31, 2000 plus the
amortization of debt issuance costs, respectively.
(d) Adjustment to record income tax effects on pre-tax pro forma adjustments,
using a statutory tax rate of thirty-five percent.
(e) Adjusted, pro rata, for dividends to preferred shareholders using $7 per
share dividend rate for equity issuance of 3,500,000 shares of preferred
stock.
21
THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
Northrop Systems is making this exchange offer to comply with the
requirements of the registration rights agreement which applies to the
Outstanding Securities. The Exchange Securities will constitute registered
securities which can be resold without being subject to the transfer
restrictions applicable to the Outstanding Securities which have not been so
registered.
Following the consummation of the exchange offer, any Outstanding Securities
not tendered will no longer have registration rights and will continue to be
subject to certain restrictions on transfer.
Each broker-dealer that receives Exchange Securities for its own account in
exchange for Outstanding Securities, where such Outstanding Securities were
acquired by the broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Securities. See "Plan of
Distribution."
Resale of Exchange Securities
We are not requesting, and do not intend to request, an interpretation by
the staff of the SEC with respect to whether the Exchange Securities issued in
exchange for the Outstanding Securities may be offered for sale, resold or
otherwise transferred by you without compliance with the registration and
prospectus delivery provisions of the Securities Act. Based on interpretations
by the staff of the SEC set forth in no-action letters issued to third parties,
we believe that the Exchange Securities may be offered for resale, resold and
otherwise transferred by you unless you are a broker-dealer, as set forth below
(see "Plan of Distribution"), without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that, among
other things:
. you acquire the Exchange Securities in the ordinary course of your
business; and
. you have no arrangement or understanding with any person to participate
in the distribution of the Exchange Securities.
If you tender Outstanding Securities in the exchange offer for the purpose
of participating in a distribution of the Exchange Securities, you may not rely
on the interpretations by the staff of the SEC and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any secondary resale transaction.
Terms of the Exchange Offer
Upon the terms set forth in this prospectus and in the letter of
transmittal, we will accept any and all Outstanding Securities properly
tendered and not withdrawn prior to 5:00 p.m., New York City time, on the
expiration date. You may tender some or all of your Outstanding Securities in
the exchange offer. However, Outstanding Securities may be tendered only in
multiples of $1,000 principal amount. Northrop Systems will issue $1,000 of
principal amount of Exchange Securities of the corresponding series in exchange
for each $1,000 principal amount of Outstanding Securities accepted in the
exchange offer.
The form and terms of the Exchange Securities will be substantially
identical to the form and terms of the Outstanding Securities for which they
are exchanged, except that the Exchange Securities will be registered under the
Securities Act, will not bear legends restricting their transfer and will not
provide for any additional interest upon the failure on our part to fulfill our
obligations under the registration rights agreements to file, and cause to be
effective, a registration statement. The Exchange Securities will evidence the
same debt as the Outstanding Securities and will be guaranteed in the same
manner as the Outstanding Securities. The Exchange Securities will be issued
under and entitled to the benefits of the same indenture that authorized the
issuance of the Outstanding Securities.
22
The exchange offer is not conditioned upon any minimum amount of Outstanding
Securities of any series being tendered for exchange. We intend to conduct the
exchange offer in accordance with the applicable provisions of the registration
rights agreements, the applicable requirements of the Securities Act and the
Securities Exchange Act of 1934 and the rules and regulations of the SEC.
Northrop Systems will be deemed to have accepted properly tendered
Outstanding Securities when it has given written notice of the acceptance to
the exchange agent. The exchange agent will act as agent for the purpose of
receiving the Exchange Securities from us and delivering them to you. If any of
the Outstanding Securities that you tender are not accepted for exchange, the
exchange agent will return them to you, without expense, promptly after the
expiration date.
You will not be required to pay brokerage commissions or fees or, subject to
the instructions in the letter of transmittal, transfer taxes with respect to
the exchange offer. We will pay all charges and expenses, other than certain
taxes, in connection with the exchange offer.
Expiration Date
The expiration date shall be 5:00 p.m., New York City time, on , 2001
unless we, in our sole discretion, extend the exchange offer. Although we have
no current intention to extend the exchange offer, we reserve the right to
extend the exchange offer at any time and from time to time by giving written
notice to the exchange agent and by timely public announcement communicated,
unless otherwise required by applicable law or regulation, by making a release
to PR Newswire. During any extension of the exchange offer, all Outstanding
Securities previously tendered in the exchange offer and not withdrawn will
remain subject to the exchange offer.
Amendments
We expressly reserve the right to:
. delay acceptance for exchange of any Outstanding Securities;
. terminate the exchange offer and not accept for exchange any Outstanding
Securities if any of the events set forth below under "--Conditions to
the Exchange Offer" shall have occurred and shall not have been waived
by us; and
. amend the terms of the exchange offer in any manner consistent with the
registration rights agreement.
Any delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice to the registered
holders of Outstanding Securities. If we amend the exchange offer in a manner
that we determine to constitute a material change, or if we waive a material
condition, we will promptly disclose the amendment or waiver in a manner
reasonably calculated to inform the holders of Outstanding Securities of the
amendment, and extend the offer if required by law.
Without limiting the manner in which we may choose to make public
announcements of any delay in acceptance, extension, termination or amendment
of the exchange offer, we shall have no obligation to publish, advertise, or
otherwise communicate any public announcement, other than by making a timely
release to a financial news service.
Conditions to the Exchange Offer
Despite any other term of the exchange offer, we will not be required to
accept for exchange, or exchange any Exchange Securities for, any Outstanding
Securities, and we may terminate the exchange offer as provided in this
prospectus before accepting any Outstanding Securities for exchange if in our
reasonable judgment:
23
. the Exchange Securities to be received will not be tradeable by the
holder, without restriction under the Securities Act, the Securities
Exchange Act of 1934 and the blue sky or securities laws of
substantially all of the states of the United States;
. the exchange offer, or the making of any exchange by a holder of
Outstanding Securities, would violate applicable law or any applicable
interpretation of the staff of the SEC; or
. any action or proceeding has been instituted or threatened in any court
or by or before any governmental agency with respect to the exchange
offer that, in our judgment, would reasonably be expected to impair our
ability to proceed with the exchange offer.
These conditions are for our sole benefit, and we may assert them regardless
of the circumstances that may give rise to them or waive them, in whole or in
part, at any or at various times. A failure on our part to exercise any of the
foregoing rights will not constitute a waiver of such right.
Procedures for Tendering
Your tender to us of Outstanding Securities under one of the procedures set
forth below will constitute an agreement between you and Northrop Systems,
Northrop Grumman and Litton in accordance with the terms of this prospectus and
the letter of transmittal.
We will determine in our sole discretion all questions as to the validity,
form, eligibility, including time of receipt, and acceptance and withdrawal of
tendered Outstanding Securities. Our determination will be final and binding on
all parties. We reserve the absolute right to reject any Outstanding Securities
not properly tendered or any Outstanding Securities our acceptance of which
would, in the opinion of our counsel, be unlawful. We also reserve the right to
waive any defects, irregularities or conditions of tender as to any Outstanding
Securities. Our interpretation of the terms and conditions of the exchange
offer, including the instructions in the letter of transmittal, will be final
and binding on all parties.
Neither the exchange agent, us, nor any other person will be under any duty
to give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. If any Outstanding
Securities received by the exchange agent are not validly tendered by you and
as to which the defects or irregularities have not been cured or waived, or if
Outstanding Securities are submitted in a principal amount greater than the
principal amount of Outstanding Securities being tendered by you, such
unaccepted or non-exchanged Outstanding Securities will be returned to you by
the exchange agent, unless otherwise provided in the letter of transmittal, as
soon as practicable following the expiration date.
We reserve the right in our sole discretion, to the extent permitted by the
indenture under which the Securities are issued and applicable law, to purchase
or make offers for any Outstanding Securities that remain outstanding
subsequent to the expiration date in the open market, in privately negotiated
transactions or otherwise. The terms of any purchases or offers made after the
expiration of the exchange offer may differ from the terms of the exchange
offer.
To tender your Outstanding Securities:
. you must complete, sign and date the letter of transmittal, or a
facsimile copy; have the signature on the letter of transmittal
guaranteed if the letter of transmittal so requires; and mail or deliver
the letter of transmittal or facsimile along with your Outstanding
Securities to The Chase Manhattan Bank at the address set forth below
prior to the expiration date; or
. The Chase Manhattan Bank must have received, prior to the expiration
date, a timely confirmation of book-entry transfer of your Outstanding
Securities into its account at DTC according to the procedure for book-
entry transfer described below, including a completed and signed letter
of transmittal or an agent's message in lieu thereof; or
. you must comply with the guaranteed delivery procedures described below.
24
The term "agent's message" means a message, transmitted by DTC to and
received by the exchange agent and forming a part of the confirmation of book
entry transfer, which states that DTC has received an express acknowledgment
from the tendering participant, stating that such participant has received and
agrees to be bound by the letter of transmittal and that we may enforce the
letter of transmittal against such participant.
If tendered Outstanding Securities are registered in the name of the signer
of the letter of transmittal and the Exchange Securities are to be issued, and
any Outstanding Securities not tendered are to be reissued, in the name of the
registered holder and delivered to the address of the registered holder
appearing on the register for the Outstanding Securities, the signature of such
signer need not be guaranteed.
In any other case, the tendered Outstanding Securities must be endorsed or
accompanied by written instruments of transfer in form satisfactory to us and
duly executed by the registered holder and the signature on the endorsement or
instrument of transfer must be guaranteed by an eligible institution: a member
firm of a registered national securities exchange or of the National
Association of Securities Dealers, Inc.; a commercial bank or trust company
having an office or correspondent in the United States; or an eligible
guarantor institution as defined by Rule 17Ad-15 under the Exchange Act.
The method of delivery of Outstanding Securities, letter of transmittal and
all other documents is at your election and risk. If delivery is made by mail,
it is recommended that registered mail, properly insured, with return receipt
requested, be used. In all cases, sufficient time should be allowed to assure
timely delivery. No letter of transmittal or Outstanding Securities should be
sent to us.
Your tender will be deemed to have been received as of the date when:
. your properly completed and duly signed letter of transmittal or agent's
message in lieu thereof, accompanied by your Outstanding Securities or a
confirmation of book-entry transfer of your Outstanding Securities into
The Chase Manhattan Bank's account at DTC, is received by The Chase
Manhattan Bank, or
. your notice of guaranteed delivery or letter, telegram or facsimile
transmission to similar effect from an eligible institution is received
by The Chase Manhattan Bank, provided that the exchange agent receives
your Outstanding Securities or confirmation of book-entry transfer, and
all other documents required by the letter of transmittal, within three
New York Stock Exchange trading days thereafter.
Each broker-dealer that receives Exchange Securities for its own account in
exchange for Outstanding Securities, where such Outstanding Securities were
acquired by the broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Securities. See "Plan of
Distribution."
Book-Entry Transfer
The Chase Manhattan Bank will make a request to establish an account with
respect to the Outstanding Securities at DTC for purposes of the exchange offer
promptly after the date of this prospectus; and any financial institution
participating in DTC's system may make book-entry delivery of Outstanding
Securities by causing DTC to transfer the Outstanding Securities into The Chase
Manhattan Bank's account at DTC in accordance with DTC's procedures for
transfer. If you wish to tender your Outstanding Securities, The Chase
Manhattan Bank must have received confirmation of the book-entry transfer of
your Outstanding Securities into its account at DTC, together with a letter of
transmittal or an agent's message in lieu thereof, and all other documents
required by the letter of transmittal, on or prior to the expiration date;
otherwise you must comply with the guaranteed delivery procedures described
below.
Guaranteed Delivery Procedures for Securities
If you desire to accept the exchange offer and time will not permit a letter
of transmittal or Outstanding Securities to reach The Chase Manhattan Bank
before the expiration date or the procedure for book-entry
25
transfer cannot be completed on a timely basis, a tender may be effected if The
Chase Manhattan Bank has received at its office, on or prior to the expiration
date, a letter, telegram or facsimile transmission from an eligible institution
setting forth:
. the name and address of the tendering holder;
. the name(s) in which the Outstanding Securities are registered;
. the certificate number(s) of the Outstanding Securities to be tendered;
and
. a statement that the tender is being made and guaranteeing that, within
three New York Stock Exchange trading days after the date of execution
of the letter, telegram or facsimile transmission by the eligible
institution, the Outstanding Securities, in proper form for transfer, or
a confirmation of book-entry transfer of such Outstanding Securities
into the exchange agent's account at DTC, will be delivered by the
eligible institution, together with a properly completed and duly
executed letter of transmittal or an agent's message in lieu thereof, as
well as any other required documents.
Unless you tender your Outstanding Securities by one of the above-described
methods within the time period set forth above accompanied or preceded by a
properly completed letter of transmittal or an agent's message in lieu thereof,
as well as any other required documents, we may, at our option, reject the
tender. Copies of a notice of guaranteed delivery which may be used by eligible
institutions for the purposes described in this paragraph are available from
The Chase Manhattan Bank.
Issuances of Exchange Securities in connection with a notice of guaranteed
delivery or letter, telegram or facsimile transmission to similar effect by an
eligible institution will be made only against submission of a duly signed
letter of transmittal or an agent's message in lieu thereof, and any other
required documents, and deposit of the tendered Outstanding Securities.
Terms and Conditions of the Letter of Transmittal
Under the terms of the letter of transmittal, if you tender Outstanding
Securities:
. you agree to exchange, assign and transfer the Outstanding Securities to
us;
. you represent and warrant that you have full power and authority to
tender, exchange, assign and transfer the Outstanding Securities and to
acquire Exchange Securities issued in the exchange offer;
. you represent and warrant that when the Outstanding Securities are
accepted for exchange, Northrop Systems will acquire good and
unencumbered title to the tendered Outstanding Securities, free and
clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim;
. you represent and warrant that you will, upon request, execute and
deliver any additional documents deemed by us to be necessary or
desirable to complete the exchange, assignment and transfer of tendered
Outstanding Securities or transfer ownership of such Outstanding
Securities on the account books maintained by DTC; and
. you agree that all authority conferred by you pursuant to the letter of
transmittal will survive your death, bankruptcy or incapacity and each
of your obligations will be binding upon your heirs, legal
representatives, successors, assigns, executors and administrators.
Withdrawal of Tenders
Tenders of Outstanding Securities may be withdrawn at any time prior to 5:00
p.m., New York City time, on the expiration date.
To be effective, a written, telegraphic or facsimile transmission notice of
withdrawal must be received by the exchange agent at the address set forth in
the letter of transmittal prior to 5:00 p.m., New York City time, on the
expiration date. Any notice of withdrawal must specify:
26
. the name of the holder originally listed in the letter of transmittal;
. the certificate numbers of the Outstanding Securities to be withdrawn,
and the principal amount of Outstanding Securities delivered for
exchange;
. a statement that the holder is withdrawing the election to have the
applicable Outstanding Securities exchanged; and
. the name of the registered holder of the Outstanding Securities.
The notice must be signed by the holder in the same manner as the original
signature on the letter of transmittal, including any required signature
guarantees, or be accompanied by evidence satisfactory to us that the person
withdrawing the tender has succeeded to the beneficial ownership of the
Outstanding Securities being withdrawn. The exchange agent will return the
properly withdrawn Outstanding Securities promptly following the receipt of
notice of withdrawal.
If Outstanding Securities have been tendered under the procedure for book-
entry transfer, any notice of withdrawal must specify the name and number of
the account at DTC to be credited with the withdrawn Outstanding Securities and
otherwise comply with the procedures of DTC.
Withdrawals of tenders of Outstanding Securities may not be rescinded.
Outstanding Securities properly withdrawn will not be deemed validly tendered
for purposes of the exchange offer, but may be retendered at any subsequent
time on or prior to the expiration date by following the procedures described
under "--Procedures for tendering."
We will determine the validity, form and eligibility (including time of
receipt) of withdrawal notices, in our sole discretion, which shall be final
and binding on all parties. Neither we, nor any of our affiliates or assignees,
nor the exchange agent or any other person shall be under any duty to give any
notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give notification. Any Outstanding Securities which
have been tendered but which are withdrawn will be returned to the holder
promptly after withdrawal.
Exchange Agent
The Chase Manhattan Bank has been appointed as exchange agent for the
exchange of the Outstanding Securities. You should direct questions and
requests for assistance with regard to these Exchange Securities, requests for
additional copies of this prospectus or of the letter of transmittal and
requests for notices of guaranteed delivery to the exchange agent addressed as
follows:
THE CHASE MANHATTAN BANK
By Mail:
P.O. Box 2320
Dallas, TX 75221-2320
Attn: Events
By Hand Delivery or Overnight Courier:
2001 Bryan Street, 9th Floor
Dallas, TX 75201
Attn: Events
By Facsimile Transmission:
(214) 468-6494
For Information or Confirmation by Telephone:
(800) 275-2048
27
Delivery of a letter of transmittal to any address or facsimile number other
than one set forth above will not constitute a valid delivery.
Fees and Expenses
We will bear the expense of soliciting tenders. The solicitation is being
made principally by mail. However, solicitations also may be made by facsimile,
telephone or in person by our officers and regular employees of our affiliates.
We will not pay any additional compensation to any of these officers and
employees for soliciting tenders.
We have not retained any dealer-manager or other soliciting agent in
connection with the exchange offer and will not make any payments to brokers,
dealers or others for soliciting acceptances of the exchange offer. We,
however, will pay the exchange agent reasonable and customary fees for their
services and will reimburse them for their reasonable out-of-pocket expenses in
connection with the exchange. We will also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this prospectus, the letter of
transmittal and related documents to the beneficial owners of the Outstanding
Securities and in handling or forwarding tenders for exchange.
We will pay all the cash expenses to be incurred by us in connection with
the exchange offer, including fees and expenses of the exchange agent and the
indenture trustee, accounting and legal fees. We will not, however, pay the
costs incurred by a holder in delivering its Outstanding Securities to the
exchange agent or any underwriting fees, commissions or transfer taxes.
Transfer Taxes
Holders who tender their Outstanding Securities for exchange will not be
required to pay any transfer taxes. However, holders who instruct us to
register Exchange Securities in the name of, or request that Outstanding
Securities not tendered or not accepted in the exchange offer be returned to, a
person other than the registered tendering holder will be required to pay any
applicable transfer tax.
Consequences Of Failure To Exchange
If you do not exchange your Outstanding Securities for Exchange Securities,
you will remain subject to the restrictions on transfer of the Outstanding
Securities:
. as set forth in the legend printed on the Outstanding Securities as a
consequence of the issuance of the Outstanding Securities pursuant to the
exemptions from, or in transactions not subject to, the registration
requirements of the Securities Act and applicable state securities laws;
and
. otherwise set forth in the offering circular distributed in connection
with the private offering of the Outstanding Securities.
In general, you may not offer or sell the Outstanding Securities unless the
offer or sale is registered under the Securities Act or unless the offer or
sale is exempt from registration under the Securities Act and applicable state
securities laws. Completion of the exchange offer will satisfy most of our
obligations under the registration rights agreement, and we do not intend to
register resales of the Outstanding Securities under the Securities Act. Based
on interpretations of the SEC, the Exchange Securities may be freely offered
for resale, resold or otherwise transferred by their holders, subject to the
limitations discussed under "--Resale of Exchange Securities" and "Plan of
Distribution."
Accounting Treatment
The Exchange Securities will generally be recorded at the same carrying
value as the Outstanding Securities as reflected in our accounting records on
the date of the exchange because the exchange of the
28
Outstanding Securities for the Exchange Securities is the completion of the
selling process contemplated in the issuance of the Outstanding Securities.
Accordingly, we will not recognize any gain or loss for accounting purposes. We
will amortize the expenses of the exchange offer and the unamortized expenses
related to the issuance of the Outstanding Securities over the term of the
Exchange Securities.
Use of Proceeds
We will not receive any cash proceeds from the issuance of the Exchange
Securities offered in this prospectus. In consideration for issuing the
Exchange Securities, we will receive the corresponding Outstanding Securities.
Outstanding Securities surrendered in exchange for Exchange Securities will be
retired and canceled and cannot be reissued. The issuance of the Exchange
Securities will not result in a change in our indebtedness.
Other Matters
Participation in the exchange offer is voluntary and you should carefully
consider whether to accept. You are urged to consult your financial and tax
advisors in making your decisions on what action to take.
No person has been authorized to give any information or to make any
representations in connection with the exchange offer other than those
contained in this prospectus. If any such information or representations are
given or made, they should not be relied upon as having been authorized by us.
Neither the delivery of this prospectus nor any exchange made hereunder shall,
under any circumstances, create any implication that there has been no change
in our affairs since the dates as of which information is given. The exchange
offer is not being made to, nor will tenders be accepted from or on behalf of,
holders of Outstanding Securities in any jurisdiction in which the making of
the exchange offer or its acceptance would not be in compliance with the laws
of such jurisdiction. However, we may, at our discretion, take such action as
we may deem necessary to make the exchange offer in any such jurisdiction and
extend the exchange offer to holders of Outstanding Securities in such
jurisdiction.
As a result of the making of the exchange offer, we will have fulfilled a
covenant contained in the registration rights agreement. Holders of the
Outstanding Securities to which the registration rights agreement apply who do
not tender their Outstanding Securities in the exchange offer will continue to
hold Outstanding Securities and will be entitled to all the rights and
limitations applicable under the indenture except for certain rights under the
registration rights agreement. All untendered Outstanding Securities will
continue to be subject to the restrictions on transfer set forth in the
indenture and the Outstanding Securities.
DESCRIPTION OF THE SECURITIES
Northrop Systems issued the Outstanding Securities, and will issue the
Exchange Securities, as separate series under an Indenture entered into as of
October 15, 1994 between Northrop Systems and The Chase Manhattan Bank as
trustee, as supplemented by a board resolution with respect to the Securities.
We refer to the indenture, as amended and supplemented, as the "Indenture."
Pursuant to guarantees which the guarantors have issued and delivered to the
indenture trustee, the guarantors have guaranteed the Outstanding Securities
and will guarantee the Exchange Securities at the time of issuance of the
Exchange Securities. This section summarizes the material provisions of the
Securities, the guarantees and the Indenture but does not contain a complete
description of them. The description of the Securities is qualified in its
entirety by the provisions of the Indenture and the guarantees. A copy of the
Indenture, the guarantees and certain other information regarding Northrop
Systems, Northrop Grumman and Litton is available as set forth under "Where You
Can Find More Information." Capitalized terms used and not otherwise defined in
the following discussion are defined below under "--Certain Definitions." In
this description, the words "Northrop Systems" refer only to Northrop Grumman
Systems Corporation and not to any of its subsidiaries.
29
General
The Exchange Securities:
. will be senior unsecured obligations of Northrop Systems;
. will be equal in right of payment to any existing and future senior
unsecured debt of Northrop Systems; and
. will be guaranteed by Northrop Grumman and Litton.
We refer to each of Northrop Grumman and Litton as a "guarantor" and
collectively as the "guarantors." Each guarantor will guarantee the Exchange
Securities and each such guarantee will be:
. a senior unsecured obligation of the guarantor; and
. equal in right of payment to any other existing and future senior
unsecured debt of the guarantor.
The aggregate principal amount of debt securities that Northrop Systems may
issue under the Indenture is not limited. Northrop Systems may issue debt
securities, including the Exchange Securities, under the Indenture from time to
time in one or more series. The Indenture does not limit Northrop Systems'
ability to incur indebtedness or require the maintenance of financial ratios or
specified levels of net worth or liquidity. However, the Indenture restricts
the ability of Northrop Systems and its Restricted Subsidiaries to enter into
certain transactions. See "--Certain Covenants." The Indenture does not contain
any provisions which would require Northrop Systems to repurchase or redeem or
otherwise modify the terms of any of the Securities upon a change of control.
Principal, Maturity and Interest
Northrop Systems will issue the Exchange Notes and Exchange Debentures as
separate series, in denominations of $1,000 and any integral multiple of
$1,000. The 7 1/8% Exchange Notes will mature on February 15, 2011, and the 7
3/4% Exchange Debentures will mature on February 15, 2031.
The 7 1/8% Exchange Notes and the 7 3/4% Exchange Debentures are being
offered in the principal amounts of $750,000,000, and $750,000,000,
respectively.
Interest on the Exchange Securities will be payable semiannually in arrears
on February 15 and August 15 commencing on August 15, 2001. Northrop Systems
will make each interest payment to the holders of record of the Exchange
Securities on the immediately preceding February 1 and August 1.
Interest on the Exchange Securities will accrue from February 27, 2001.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months. Holders of Outstanding Securities accepted for exchange will be
deemed to have waived the right to receive any payments in respect of interest
on the Outstanding Securities accrued from February 27, 2001 to the date of
issuance of the Exchange Securities and will receive interest for that period
pursuant to the Exchange Securities.
Additional Securities
Northrop Systems may, without the consent of the holders of the Securities,
create and issue additional securities ranking equally with the Securities in
all respects, including having the same CUSIP number, so that such additional
securities, as applicable, shall be consolidated and form a single series of
securities with the Securities offered hereby and shall have the same terms as
to status, redemption or otherwise as the securities of that series. No
additional securities may be issued if an Event of Default has occurred and is
continuing with respect to the Securities.
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Guarantees
Northrop Grumman and Litton fully and unconditionally guaranteed, jointly
and severally, all of the obligations of Northrop Systems under the Outstanding
Securities and will guarantee, in the same manner, all of the obligations of
Northrop Systems under the Exchange Securities, including the punctual payment
of the principal of, any premium and interest (including additional interest)
on the Exchange Securities. In addition, if a direct or indirect significant
subsidiary, as that term is defined for purposes of Regulation S-X as adopted
by the SEC, of Northrop Grumman enters into a guarantee of the New Credit
Facilities (or any replacement facility), then such subsidiary shall execute a
guarantee of the Exchange Securities substantially similar to the guarantee of
Northrop Grumman provided that such guarantee is not otherwise prohibited by
the terms of the Indenture. The obligation of each guarantor under its
guarantee will be limited as necessary to prevent that guarantee from
constituting a fraudulent conveyance under applicable law.
Without the consent of the holders of the Securities, a guarantor may not
consolidate with or merge into another entity, or convey, transfer or lease its
properties and assets substantially as an entirety to any entity unless:
. any successor entity is a corporation, partnership or trust organized and
validly existing under the laws of the United States or any state
thereof;
. the successor entity assumes the guarantor's obligations under the
guarantee;
. after giving effect to the transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of
Default, has occurred and is continuing; and
. the guarantor delivers to the indenture trustee certificates and opinions
to the effect that the transaction complies with the Indenture.
Upon any such consolidation or merger or conveyance, transfer or lease of
the properties and assets of a guarantor substantially as an entirety, the
successor entity will succeed to, and be substituted for, such guarantor and
the guarantee, and the guarantor, except in the case of a lease, will be
relieved of all obligations and covenants under the guarantee.
Under the federal bankruptcy law and comparable provisions of state
fraudulent transfers laws, each of the guarantees could be voided or claims in
respect of a guarantee could be subordinated to all other debts of the
guarantor if, among other things, the guarantor, at the time it incurred the
indebtedness evidenced by its guarantee:
. received less than reasonably equivalent value or fair consideration for
the incurrence of its guarantee and was insolvent or rendered insolvent
by reason of such incurrence;
. was engaged in a business or transaction for which such guarantor's
remaining assets constituted unreasonably small capital; or
. intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they mature.
In addition, any payment by a guarantor pursuant to its guarantee could be
voided and required to be returned to the guarantor or to a fund for the
benefit of the creditors of the guarantor.
The measures of insolvency for purposes of these fraudulent transfer laws
will vary depending upon the law applied in any proceeding to determine whether
a fraudulent transfer has occurred. Generally, however, the guarantor would be
considered insolvent if:
. the sum of its debts, including contingent liabilities, were greater
than the fair saleable value of all of its assets;
31
. if the present fair saleable value of its assets was less than the
amount that would be required to pay its probable liability on its
existing debts, including contingent liabilities, as they become
absolute and mature; or
. it could not pay its debts as they become due.
Optional Redemption
Northrop Systems may redeem all or part of the Securities at any time at its
option at a redemption price equal to the greater of (1) the principal amount
of the Securities being redeemed plus accrued and unpaid interest to the
redemption date or (2) the Make-Whole Amount for the Securities being redeemed.
As used in this prospectus:
"Make Whole Amount" means the sum, as determined by a Quotation Agent, of
the present values of the principal amount of the Securities to be redeemed,
together with scheduled payments of interest (exclusive of interest to the
redemption date) from the redemption date to the maturity date of the
Securities being redeemed, in each case discounted to the redemption date on a
semi-annual basis, assuming a 360-day year consisting of twelve 30-day months,
at the Adjusted Treasury Rate, plus accrued and unpaid interest on the
principal amount of the Securities being redeemed to the redemption date.
"Adjusted Treasury Rate" means, with respect to any redemption date, (i) the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15 (519)" or any successor publication which is published weekly
by the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to
constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the remaining term of the Securities of the
series being redeemed, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue shall be determined and the
Adjusted Treasury Rate shall be interpolated or extrapolated from such yields
on a straight line basis, rounding to the nearest month) or (ii) if such
release (or any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate per year equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date, in each case calculated on
the third business day preceding the redemption date, plus .25% for the
Exchange Notes due 2011 and .30% for the Exchange Debentures due 2031.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
remaining term from the redemption date to the maturity date of the Securities
being redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
Securities.
"Comparable Treasury Price" means, with respect to any redemption date, if
clause (ii) of the Adjusted Treasury Rate is applicable, the average of three,
or such lesser number as is obtained by the indenture trustee, Reference
Treasury Dealer Quotations for such redemption date.
"Quotation Agent" means the Reference Treasury Dealer selected by the
indenture trustee after consultation with Northrop Systems.
"Reference Treasury Dealer" means any of Chase Securities, Inc. and Credit
Suisse First Boston Corporation, and their respective successors and assigns,
and one other nationally recognized investment banking firm selected by
Northrop Systems that is a primary U.S. Government securities dealer.
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"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
indenture trustee, of the bid and asked prices for the Comparable Treasury
Issue, expressed in each case as a percentage of its principal amount, quoted
in writing to the indenture trustee by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third business day preceding such redemption
date.
Selection and Notice of Redemption
If Northrop Systems is redeeming less than all the Securities in a series at
any time, the indenture trustee will select Securities to be redeemed using a
method it considers fair and appropriate.
Northrop Systems will redeem Securities in increments of $1,000. Northrop
Systems will cause notices of redemption to be mailed by first class mail at
least 30 but not more than 60 days before the redemption date of each holder of
Securities to be redeemed at its registered address. However, Northrop Systems
will not know the exact redemption price until three business days before the
redemption date. Therefore, the notice of redemption will only describe how the
redemption price will be calculated.
If any Security is to be redeemed in part only, the notice of redemption
that relates to that Security will state the portion of the principal amount
thereof to be redeemed. We will issue a Security in principal amount equal to
the unredeemed portion of the original Security in the name of the holder
thereof upon cancellation of the original Security. Securities called for
redemption will become due on the date fixed for redemption. On and after the
redemption date, interest will cease to accrue on Securities or portions of
them called for redemption.
Consolidation, Merger and Sale of Assets
Northrop Systems, without the consent of the holders of any of the
Securities under the Indenture, may consolidate with or merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to any
entity, and may permit any entity to merge into, or convey, transfer or lease
substantially all of its properties and assets to Northrop Systems, on the
condition that:
. any successor entity must be a corporation, partnership or trust
organized and validly existing under the laws of the United States or
any state thereof;
. the successor entity must assume Northrop Systems' obligations on the
Securities and under the Indenture;
. after giving effect to the transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an
Event of Default, has occurred and is continuing; and
. Northrop Systems delivers to the indenture trustee certificates and
opinions to the effect that the transaction complies with the Indenture.
Upon any such consolidation or merger into any other entity or any
conveyance, transfer or lease of the properties and assets of Northrop Systems
substantially as an entirety, the successor entity will succeed to, and be
substituted for, Northrop Systems under the Indenture, and Northrop Systems,
except in the case of a lease, will be relieved of all obligations and
covenants under the Indenture and the Securities.
Certain Covenants
Limitations on Liens. Northrop Systems will not create, incur, assume or
guarantee, and will not permit any Restricted Subsidiary to create, incur,
assume or guarantee, any debt secured by a mortgage, security interest, pledge,
charge or similar encumbrance upon a Principal Property of Northrop Systems or
any Restricted Subsidiary or upon any shares of stock or debt of any Restricted
Subsidiary without also securing the
33
Securities and other outstanding debt securities issued pursuant to the
Indenture equally and ratably with the new debt. The foregoing restriction,
however, does not apply to:
. encumbrances on property, shares of stock or indebtedness of any
corporation existing at the time the corporation becomes a Restricted
Subsidiary;
. encumbrances on property existing at the time Northrop Systems or a
Restricted Subsidiary acquired the property or encumbrances to secure
all or part of the purchase price of the acquired property;
. encumbrances to secure any debt incurred prior to, at the time of, or
within 180 days after, the acquisition, completion of construction
(including improvements on existing property) or commencement of full
operation of the property to finance all or part of the purchase price
of the property, or construction of improvements on the property;
. encumbrances to secure debt of a Restricted Subsidiary owed to Northrop
Systems or another Restricted Subsidiary;
. encumbrances existing on October 15, 1994;
. encumbrances on property of a corporation existing at the time that
corporation is merged into or consolidated with Northrop Systems or a
Restricted Subsidiary or at the time of a sale, lease, or other
disposition of properties of a corporation as an entirety or
substantially as an entirety to Northrop Systems or a Restricted
Subsidiary;
. encumbrances on property of Northrop Systems or a Restricted Subsidiary
in favor of the United States of America or any State thereof, or any
department, agency, instrumentality or political subdivision thereof, to
secure any payments pursuant to any contract or statute or to secure any
debt incurred or guaranteed for the purpose of financing all or part of
the purchase price or the cost of construction of the property subject
to such encumbrances (such as encumbrances incurred in connection with
pollution control bonds, industrial revenue bonds or similar
financings); or
. extensions, renewals or replacements of any encumbrances referred to in
the foregoing bullet points.
Notwithstanding the restrictions outlined in the preceding paragraph, Northrop
Systems or any Restricted Subsidiary may create, incur, assume or guarantee any
debt secured by an encumbrance without equally and ratably securing the
Securities and the other outstanding debt securities issued pursuant to the
Indenture if, after giving effect to the new debt, the aggregate amount of all
debt (other than the Securities and the other outstanding debt securities
issued under the Indenture) secured by encumbrances (not including encumbrances
permitted under the bullet points above) does not exceed the greater of
$300,000,000 or 10% of Consolidated Net Tangible Assets.
Sale and Leaseback Arrangements. Northrop Systems will not, and will not
permit any Restricted Subsidiary to, enter into any arrangement with a person
that provides for the leasing to Northrop Systems or any Restricted Subsidiary
of certain property (other than any such transaction involving a lease for a
term of not more than three years or an intercompany transaction) which has
been or will be sold or transferred by Northrop Systems or the Restricted
Subsidiary to such person, unless either:
. Northrop Systems or the Restricted Subsidiary would be entitled to
create, incur, assume or guarantee debt secured by an encumbrance on the
Principal Property at least equal in amount to the Attributable Debt
with respect to such arrangement, without equally and ratably securing
the Securities and the other outstanding debt securities issued under
the Indenture if the Attributable Debt is deemed to be debt subject to
the provisions of the second paragraph under "--Certain Covenants--
Limitations on Liens" above; or
. Northrop Systems applies an amount equal to the greater of the net
proceeds of the sale or the Attributable Debt with respect to the
arrangement to the retirement of debt of Northrop Systems or any
34
Restricted Subsidiary that matures at or is extinguishable or renewable at
the option of the obligor to a date more than twelve months after the
creation of the debt.
Funded Debt of Restricted Subsidiaries. No Restricted Subsidiary may issue,
assume or guarantee any Funded Debt unless the aggregate amount of all Funded
Debt of all Restricted Subsidiaries (excluding Funded Debt permitted by the
clauses below) does not exceed 10% of Consolidated Net Tangible Assets. This
limitation will not apply to:
. any Funded Debt owed to Northrop Systems or a Restricted Subsidiary;
. Funded Debt existing on October 15, 1994, and extensions, renewals or
replacements thereof;
. Funded Debt secured by an encumbrance permitted as described in the
bullet points listed under "-- Certain Covenants--Limitations on Liens"
above;
. any guarantee by a Restricted Subsidiary of Funded Debt of Northrop
Systems incurred in connection with the acquisition of the Restricted
Subsidiary; and
. Funded Debt of a corporation outstanding at the time the corporation
first becomes a Restricted Subsidiary.
Events of Default
Each of the following events constitute an "Event of Default" under the
Indenture with respect to each series of Securities:
. Northrop Systems fails to pay the principal of or any premium on any
Security of that series when due, whether at maturity or otherwise;
. Northrop Systems fails to pay any interest on any Security of that
series when due, and the failure continues for 30 days;
. Northrop Systems fails to perform any other of its covenants or
agreements in the Indenture or in the Security of that series (other
than a covenant or agreement included in the Indenture solely for the
benefit of a series other than that series), and the failure continues
for 90 days after written notice has been given by the indenture
trustee, or by the holders of at least 10% in principal amount of the
outstanding Securities of that series, as provided in the Indenture;
. certain events in bankruptcy, insolvency or reorganization; and
. except as permitted by the Indenture or the guarantee, any guarantee
shall be held in any judicial proceeding to be unenforceable or invalid
or shall cease for any reason to be in full force and effect or any
guarantor, or any entity or person acting on behalf of any guarantor,
shall deny or disaffirm its obligations under such guarantor's
guarantee.
If an Event of Default (other than an Event of Default described in the
fourth bullet point above) with respect to the Securities of any series at the
time outstanding occurs and is continuing, either the indenture trustee or the
holders of at least 25% in aggregate principal amount of the outstanding
Securities of that series may declare the principal amount of the Securities
of that series due and payable immediately. If an Event of Default described
in the fourth bullet point above occurs, the principal amount of all the
Securities will automatically, and without any action by the indenture trustee
or any holder, become immediately due and payable. At any time after the
holders of the Securities of a series declare that the Securities of that
series are due and immediately payable, a majority in principal amount of the
outstanding holders of Securities of that series may, under certain
circumstances, rescind and cancel the declaration and its consequences:
. before the indenture trustee has obtained a judgment or decree for
money; and
. if all Events of Default, other than the non-payment of accelerated
principal or other specified amounts, have been waived or cured as
provided in the Indenture.
35
For information as to waiver of defaults, see "--Modification and Waiver."
Subject to the provisions of the Indenture relating to the duties of the
indenture trustee in case an Event of Default occurs and is continuing, the
indenture trustee will be under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any of the holders,
unless the holders have offered to the indenture trustee indemnity satisfactory
to it. Subject to the provisions for the indemnification of the indenture
trustee, the holders of a majority in aggregate principal amount of the
outstanding Securities of any series will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
indenture trustee or exercising any trust or power conferred on the indenture
trustee with respect to the Securities of that series.
No holder of a Security of any series will have any right to institute any
proceeding with respect to the Indenture, or for the appointment of a receiver
or a trustee, or for any other remedy under the Indenture, unless:
. the holder has previously given to the indenture trustee written notice
of a continuing Event of Default with respect to the Securities of that
series;
. the holders of at least 25% in aggregate principal amount of the
outstanding Securities of that series have requested in writing that the
indenture trustee institute a proceeding, and the holder or holders have
offered indemnity satisfactory to it to the indenture trustee to
institute the proceeding; and
. the indenture trustee has failed to institute the proceeding, and has
not received from the holders of a majority in aggregate principal
amount of the outstanding Securities of that series a direction
inconsistent with the request, within 60 days after such notice, request
and offer.
These limitations do not apply to a suit instituted by a holder of a
Security for the enforcement of payment of the principal of or any premium or
interest on a Security on or after the applicable due date specified in the
Security.
Northrop Systems is required to furnish to the indenture trustee annually a
written statement by certain of its officers as to whether or not Northrop
Systems is, to the knowledge of the officers, in default in the performance or
observance of any of the terms, provisions and conditions of the Indenture and,
if so, specifying all the known defaults.
Modification and Waiver
Northrop Systems and the indenture trustee may modify or amend the Indenture
with the consent of the holders of a majority in aggregate principal amount of
each series of the outstanding Securities issued under the Indenture and
affected by such modification or amendment.
Without the consent of the holders of the Securities, Northrop Systems and
the indenture trustee may modify or amend the Indenture for any of the
following purposes:
. to evidence the succession of another person as obligor under the
Indenture;
. to add to covenants of Northrop Systems or to surrender any right or
power conferred on Northrop Systems under the Indenture;
. to add Events of Default;
. to secure the debt securities issued under the Indenture;
. to evidence or provide for the acceptance or appointment by a successor
indenture trustee or facilitate the administration of the trusts under
the Indenture by more than one indenture trustee;
. to cure any ambiguity, defect or inconsistency in the Indenture (so
long as the cure or modification does not adversely affect the interest
of the holders of the Securities in any material respect);
36
. to facilitate the issuance of debt securities under the Indenture in
bearer or uncertificated form;
. to establish the terms of new series of debt securities or to modify
provisions applicable to a series of debt securities not then
outstanding; or
. to add provisions with respect to conversion.
The consent of each holder of an outstanding Security affected thereby is
required if an amendment or modification would:
. change the stated maturity of the principal of, or any installment of
principal of or interest on, any Security;
. reduce the principal amount of, or any premium or interest on, any
Security;
. reduce the amount of principal of any Security payable upon
acceleration of the maturity thereof;
. change the place or currency of payment of principal of, or any premium
or interest on, any Security;
. impair the right to institute suit for the enforcement of any payment
on or with respect to any Security;
. reduce the percentage in principal amount of outstanding Securities of
any series, the consent of whose holders is required for modification
or amendment of the Indenture;
. modify the obligations of a guarantor under its guarantee in a manner
adverse to the interests of the holders of the Securities;
. reduce the percentage in principal amount of outstanding Securities of
any series necessary for waiver of compliance with certain provisions
of the Indenture or for waiver of certain defaults; or
. modify such provisions with respect to modification and waiver.
The holders of a majority in principal amount of the outstanding Securities
of any series may waive compliance by Northrop Systems with certain restrictive
provisions of the Indenture and, if applicable, the Securities. The holders of
a majority in principal amount of the outstanding Securities of any series may
waive any past default under the Indenture, except a default in the payment of
principal, premium or interest and certain covenants and provisions of the
Indenture and, if applicable, such Securities which may not be amended without
the consent of the holder of each outstanding Security of such series affected.
Outstanding Securities
The Indenture provides that in determining whether the holders of the
requisite principal amount of the outstanding Securities have given or taken
any direction, notice, consent, waiver or other action under the Indenture and,
if applicable, the Securities, as of any date, Securities for whose payment or
redemption money has been deposited or set aside in trust for the holders and
those that have been fully defeased, will not be deemed to be outstanding. In
addition, Securities owned by Northrop Systems or any of its affiliates will
not be deemed to be outstanding.
Defeasance and Covenant Defeasance
Upon deposit with the indenture trustee (or other qualifying trustee), in
trust for such purpose, money or U.S. Government obligations, or both, which
will provide money in an amount sufficient to pay the principal of and interest
on the Securities, Northrop Systems may elect either:
. to defease and be discharged from any and all its obligations with
respect to the Securities and the Indenture and have the obligations of
each guarantor discharged with respect to its guarantee, except for the
rights of holders of Securities to receive payments on the Securities
solely from the trust fund established pursuant to the Indenture and
the obligations to exchange or register the transfer of the
37
Securities, to replace temporary or mutilated, destroyed, lost or stolen
Securities, to maintain an office or agency with respect to the Securities
and to hold moneys for payment in trust ("defeasance"); or
. to be released from its obligations with respect to the Securities
concerning restrictive covenants which are subject to covenant
defeasance, and the occurrence of certain Events of Default with
respect to such restrictive covenants shall no longer be an Event of
Default with respect to Northrop Systems or any guarantor ("covenant
defeasance").
As a condition to defeasance or covenant defeasance, Northrop Systems must
deliver to the indenture trustee an opinion of counsel (as specified in the
Indenture) stating that holders of the Securities will not recognize gain or
loss for federal income tax purposes as a result of the defeasance or covenant
defeasance and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if Northrop
Systems did not elect the defeasance or covenant defeasance. Northrop Systems
may exercise its defeasance option with respect to the Securities
notwithstanding its prior exercise of its covenant defeasance option. If
Northrop Systems exercises its defeasance option, payment of the Securities may
not be accelerated by reference to the covenants noted under the second bullet
point above. If Northrop Systems does not comply with its remaining obligations
after exercising its covenant defeasance option and the Securities are declared
due and payable because of the occurrence of any Event of Default, the amount
of money and U.S. Government obligations on deposit in the defeasance trust may
be insufficient to pay amounts due on the Securities at the time of the
acceleration. However, Northrop Systems and the guarantors will remain liable
for such payments.
Certain Definitions
"Attributable Debt" when used in connection with a sale and leaseback
transaction referred to above shall mean, at the time of determination, the
lesser of (a) he fair value of the property (as determined by the Board of
Directors of Northrop Systems) or (b) he present value (discounted at the rate
implicit in the terms of the relevant lease) of the obligation of the lessee
for net rental payments during the remaining term of the lease (including any
period for which such lease has been extended).
"Consolidated Net Tangible Assets" means, as of any particular time, the
aggregate amount of assets (less applicable reserves and other properly
deductible items) minus (a) all current liabilities except for (i) notes and
loans payable, (ii) current maturities of long-term debt, (iii) current
maturities of obligations under capital leases and (iv) deferred income taxes,
and (b) all goodwill, tradenames, trademarks, patents, unamortized debt
discount and expenses (to the extent included in said aggregate amount of
assets) and other like intangibles, all as set forth on the most recent
quarterly or annual consolidated balance sheet of Northrop Systems and its
consolidated subsidiaries and computed in accordance with generally accepted
accounting principles.
"Funded Debt" means any debt or guarantee of debt, whether or not secured,
maturing more than one year from the date of its creation. Funded Debt includes
any debt or guarantee of debt renewable or extendable at the option of the
obligor to a date more than one year from the date of original issuance of the
debt or guarantee, but does not include any portion of such debt or guarantee
which is included in current liabilities.
"Principal Property" means any manufacturing plant or manufacturing facility
which is (i) owned by Northrop Systems or any Restricted Subsidiary and (ii)
located within the continental United States of America, except any plant
which, in the opinion of the Board of Directors, is not of material importance
to the total business conducted by Northrop Systems and the Restricted
Subsidiaries taken as a whole.
"Restricted Subsidiary" means any subsidiary of Northrop Systems except any
subsidiary substantially all the assets of which are located, or substantially
all of the business of which is carried on, outside of the United States of
America, or any subsidiary substantially all of the assets of which consists of
stock or other securities of such a subsidiary.
38
Book-Entry Issuance; Depository Procedures
Northrop Systems will issue the Exchange Securities as "global securities."
The Depository Trust Company ("DTC") will act as the depositary for the
global securities. Northrop Systems will issue global securities as fully
registered securities registered in the name of DTC's nominee, Cede & Co.
Northrop Systems will issue one or more fully registered global securities for
Exchange Securities and will deposit the global securities with DTC.
The following description of the operations and procedures of DTC are
provided solely as a matter of convenience. These operations and procedures are
solely within the control of the respective settlement systems and are subject
to changes by them. Northrop Systems takes no responsibility for these
operations and procedures and urges investors to contact the system or their
participants directly to discuss these matters.
DTC has advised Northrop Systems that DTC is a limited-purpose trust company
created to hold securities for its participating organizations (collectively,
the "Participants") and to facilitate the clearance and settlement of
transactions in those securities between Participants through electronic book-
entry changes in accounts of its Participants. The Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. Access to DTC's system is also available to
other entities such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Participant, either
directly or indirectly (collectively, the "Indirect Participants"). Persons who
are not Participants may beneficially own securities held by or on behalf of
DTC only through the Participants or the Indirect Participants. The ownership
interests in, and transfers of ownership interests in, each security held by or
on behalf of DTC are recorded on the records of the Participants and Indirect
Participants.
DTC has also advised Northrop Systems that, pursuant to procedures
established by it:
(1) upon deposit of the global securities, DTC will credit the accounts
of Participants with portions of the principal amount of the global
securities; and
(2) ownership of these interests in the global securities will be shown
on, and the transfer of ownership of these interests will be effected
only through, records maintained by DTC (with respect to the
Participants) or by the Participants and the Indirect Participants
(with respect to other owners of beneficial interest in the global
securities).
Investors in the global securities who are Participants in DTC's system may
hold their interests therein directly through DTC. Investors in the global
securities who are not Participants may hold their interests therein indirectly
through organizations which are Participants in such system. Euroclear System
("Euroclear") and Clearstream Bank, S.A. ("Clearstream") are indirect
participants in DTC. Investors that are originally required to hold Outstanding
Securities consisting of Regulation S Global Securities for a restricted period
only through Euroclear or Clearstream may now also hold interests in the Global
Securities through Participants in the DTC system other than Euroclear and
Clearstream. All interests in a global security, including those held through
Euroclear or Clearstream, may be subject to the procedures and requirements of
DTC. Those interests held through Euroclear or Clearstream may also be subject
to the procedures and requirements of such systems. The laws of some states
require that certain Persons take physical delivery in definitive form of
securities that they own. Consequently, the ability to transfer beneficial
interests in a global security to such Persons will be limited to that extent.
Because DTC can act only on behalf of Participants, which in turn act on behalf
of Indirect Participants, the ability of a Person having beneficial interests
in a global security to pledge such interests to Persons that do not
participate in the DTC system, or otherwise take actions in respect of such
interests, may be affected by the lack of a physical certificate evidencing
such interests.
Except as described below, owners of interest in the global securities will
not have Exchange Securities registered in their names, will not receive
physical delivery of Exchange Securities in certificated form and will not be
considered the registered owners or "Holders" thereof under the Indenture for
any purpose.
39
Payments in respect of the principal of, and interest and premium and
additional interest, if any, on a global security registered in the name of DTC
or its nominee will be payable to DTC in its capacity as the registered Holder
under the Indenture. Under the terms of the Indenture, Northrop Systems and the
indenture trustee will treat the Persons in whose names the Securities,
including the global securities, are registered as the owners of the Securities
for the purpose of receiving payments and for all other purposes. Consequently,
neither Northrop Systems, the indenture trustee nor any agent of Northrop
Systems or the indenture trustee has or will have any responsibility or
liability for:
(1) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of
beneficial ownership interest in the global securities or for
maintaining, supervising or reviewing any of DTC's records or any
Participant's or Indirect Participant's records relating to the
beneficial ownership interests in the global securities; or
(2) any other matter relating to the actions and practices of DTC or any
of its Participants or Indirect Participants.
DTC has advised Northrop Systems that its current practice, upon receipt of
any payment in respect of securities such as the Securities (including
principal and interest), is to credit the accounts of the relevant Participants
with the payment on the payment date unless DTC has reason to believe it will
not receive payment on such payment date. Each relevant Participant is credited
with an amount proportionate to its beneficial ownership of an interest in the
principal amount of the relevant security as shown on the records of DTC.
Payments by the Participants and the Indirect Participants to the beneficial
owners of Securities will be governed by standing instructions and customary
practices and will be the responsibility of the Participants or the Indirect
Participants and will not be the responsibility of DTC, the indenture trustee
or Northrop Systems. Northrop Systems understands that under existing industry
practice, if Northrop Systems requests any action of Holders of Securities or a
Holder that is an owner of a beneficial interest in a global security desires
to take any action, that DTC, as the Holder of the global security, is entitled
to take, then DTC would authorize the Participants to take the action and the
Participants would authorize Holders owning through Participants to take the
action or would otherwise act upon the instruction of the Holders. Neither
Northrop Systems nor the indenture trustee will be liable for any delay by DTC
or any of its Participants in identifying the beneficial owners of the
Securities, and Northrop Systems and the indenture trustee may conclusively
rely on and will be fully protected in relying on instructions from DTC or its
nominee for all purposes.
Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds, and transfers between
participants in Euroclear and Clearstream will be effected in accordance with
their respective rules and operating procedures.
Cross-market transfers between the Participants in DTC, on the one hand, and
Euroclear or Clearstream participants, on the other hand, will be effected
through DTC in accordance with DTC's rules on behalf of Euroclear or
Clearstream, as the case may be, by its respective depositary; however, such
cross-market transactions will require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in such system in
accordance with the rules and procedures and within the established deadlines
(Brussels time) of such system. Euroclear or Clearstream, as the case may be,
will, if the transaction meets its settlement requirements, deliver
instructions to its respective depositary to take action to effect final
settlement on its behalf by delivering or receiving interests in the relevant
global security in DTC, and making or receiving payment in accordance with
normal procedures for same-day funds settlement applicable to DTC. Euroclear
participants and Clearstream participants may not deliver instructions directly
to the depositories for Euroclear or Clearstream.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants and by direct and
indirect participants to beneficial owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
40
Although DTC, Euroclear and Clearstream have agreed to the foregoing
procedures to facilitate transfers of interests in the global securities among
participants in DTC, Euroclear and Clearstream, they are under no obligation to
perform or to continue to perform such procedures, and may discontinue such
procedures at any time. Neither Northrop Grumman nor the indenture trustee nor
any of their respective agents will have any responsibility for the performance
by DTC, Euroclear or Clearstream or their respective participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations.
DTC may discontinue providing its services as securities depositary with
respect to the global securities at any time by giving reasonable notice to
Northrop Systems or the indenture trustee. Under such circumstances, in the
event that a successor securities depositary is not obtained, certificates for
the securities are required to be printed and delivered.
Northrop Systems may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary). In that event,
certificates for the securities will be printed and delivered.
Certificated Securities
Subject to certain conditions, the Securities represented by the Global
Securities are exchangeable for certificated Securities of the same series in
definitive form of like tenor in denominations of $1,000 and integral multiples
thereof if:
. DTC notifies Northrop Systems that it is unwilling or unable to
continue as depositary for the global securities or the depositary
ceases to be a clearing agency registered under the Exchange Act and,
in either case, Northrop Systems is unable to locate a qualified
successor within 90 days;
. Northrop Systems in its discretion at any time determines not to have
all or any of the Securities represented by a global security; or
. a default entitling the holders of the Securities to accelerate the
maturity thereof has occurred and is continuing.
Any Security that is exchangeable as above is exchangeable for certificated
Securities of the same series as issuable in authorized denominations and
registered in such names as DTC shall direct. Subject to the foregoing, the
Global Securities are not exchangeable, except for Global Securities of the
same aggregate denomination to be registered in the name of the depositary or
its nominee.
Same Day Settlement and Payment
Northrop Systems will make payments in respect of the Securities represented
by the Global Securities (including principal, premium, if any, interest,
additional interest, if any) by wire transfer of immediately available funds to
the accounts specified by the Global Security holder. Northrop Systems will
make all payments of principal, interest and premium and additional interest,
if any, with respect to certificated Securities by wire transfer of immediately
available funds to the accounts specified by the holders of the certificated
Securities or, if no such account is specified, by mailing a check to each such
holder's registered address. The Securities represented by the Global
Securities are expected to be eligible to trade in DTC's Same-Day Funds
Settlement System, and any permitted secondary market trading activity in such
Securities will, therefore, be required by DTC to be settled in immediately
available funds. Northrop Systems expects that secondary trading in any
certificated Securities will also be settled in immediately available funds.
Governing Law
The Indenture, the Exchange Securities and the guarantees will be governed
by, and construed in accordance with, the law of the State of New York, without
regard to principles of conflicts of laws.
41
Information Regarding the Indenture Trustee
The Chase Manhattan Bank is the indenture trustee under the Indenture. The
indenture trustee or its affiliates perform certain commercial banking services
for Northrop Systems in the ordinary course of business. The indenture trustee
is also a co-agent and lender with respect to Northrop Systems' existing credit
facilities. The indenture trustee may be deemed to have a conflicting interest
and may be required to resign as indenture trustee if at the time of a default
under the Indenture it is a creditor of Northrop Systems. Notices to the
indenture trustee should be directed to Institutional Trust Services, 450 West
33rd Street, 15th Floor, New York, NY 10001.
42
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
The following summary describes certain United States federal income tax
consequences of the purchase, ownership and disposition of the Securities as of
the date hereof. Except where noted, it deals only with Securities held as
capital assets within the meaning of Section 1221 of the Internal Revenue Code
of 1986, as amended, does not deal with special situations, such as those of
dealers in securities or currencies, financial institutions, tax-exempt
entities, life insurance companies, persons holding Securities as a part of a
hedging or conversion transaction or a straddle or persons whose functional
currency is not the United States dollar. In addition, this discussion does not
address the tax consequences to persons who purchase Securities other than
pursuant to their initial issuance and distribution. Furthermore, the
discussion below is based upon the provisions of the Code, final and proposed
Treasury regulations under the Code, and administrative rulings and judicial
decisions as of the date of this prospectus. Such authorities may be repealed,
revoked or modified at any time, with either forward-looking or retroactive
effect, which could result in United States federal income tax consequences
being different from those discussed below.
PROSPECTIVE PURCHASERS OF SECURITIES ARE ADVISED TO CONSULT THEIR TAX ADVISORS
AS TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE,
OWNERSHIP AND DISPOSITION OF SECURITIES IN LIGHT OF THEIR PARTICULAR
CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR OTHER TAX LAWS.
As used in this prospectus, a "United States Holder" means a beneficial
owner of a Security that is a citizen or resident of the United States, a
corporation or partnership created or organized in or under the laws of the
United States or any political subdivision thereof, an estate, the income of
which is subject to United States federal income taxation regardless of its
source, or a trust, the administration of which is subject to the primary
supervision of a court within the United States and for which one or more
United States persons have the authority to control all substantial decisions.
As used herein, the term "Non-United States Holder" means a beneficial owner of
a Security that is not a United States Holder.
United States Holders
Payments of Interest
Stated interest on a Security will generally be taxable to a United States
Holder as ordinary income at the time it is paid or accrued in accordance with
the United States Holder's method of accounting for tax purposes.
Exchange Offer
The exchange of an Outstanding Security for an Exchange Security pursuant to
the exchange offer will not constitute a "significant modification" of the
Outstanding Security for the United States federal income tax purposes and,
accordingly, the Exchange Security received will be treated as a continuation
of the Outstanding Security in the hands of a holder. As a result, (i) a United
States Holder will not recognize taxable gain or loss as a result of exchanging
Outstanding Securities for Exchange Securities pursuant to the Registered
Exchange Offer, (ii) the holding period of the Exchange Securities will include
the holding period of the Outstanding Securities exchanged therefor; and (iii)
the adjusted tax basis of the Exchange Securities will be the same as the
adjusted tax basis of the Outstanding Securities exchanged therefor immediately
before such exchange.
Sale, Exchange and Redemption of the Securities
Upon the sale, exchange or redemption of a Security, a United States Holder
will recognize gain or loss equal to the difference between (1) the amount
realized upon the sale, exchange or redemption, other than amounts attributable
to accrued but unpaid interest, and (2) such holder's adjusted tax basis in the
Security. Any amount attributable to accrued but unpaid interest on the Note
will be treated in the same manner as
43
payments of interest made to such holder, as described above. A United States
Holder's adjusted tax basis will be, in general, its initial purchase price for
the Security, net of accrued interest. Such gain or loss will be capital gain
or loss and will be long-term capital gain or loss if at the time of sale,
exchange or redemption, the Security has been held for more than one year.
Under current law, the deductibility of capital losses is subject to
limitations. The net capital gains of individuals are taxed at lower rates than
ordinary income.
Non-United States Holders
The following is a general discussion of certain United States federal
income and estate tax consequences of the acquisition, ownership and
disposition of Securities by a Non-United States Holder. This discussion is
based upon the United States federal tax law now in effect, which is subject to
change, possibly retroactively. The tax treatment of the holders of each series
of Securities may vary depending upon their particular situations. Certain
holders (including insurance companies, tax exempt organizations, financial
institutions and broker-dealers) may be subject to special rules not discussed
below. Prospective investors are urged to consult their tax advisors regarding
the United States federal tax consequences of acquiring, holding and disposing
of Securities, as well any tax consequences that may arise under the laws of
any foreign, state, local or other taxing jurisdiction.
Payments of Interest
Subject to the discussion below concerning backup withholding, no
withholding of United States federal income tax will be required with respect
to the payment by Northrop Systems or any paying agent of principal or interest
on a Security held by a Non-United States Holder, provided that the beneficial
owner (1) does not actually or constructively own 10% or more of the total
combined voting power of all classes of Northrop Systems' stock entitled to
vote within the meaning of Section 871(h)(3) of the Code and the regulations
thereunder; (2) is not a controlled foreign corporation related, directly or
indirectly, to Northrop Systems through stock ownership; (3) is not a bank
whose receipt of interest on a Security is described in Section 881(c)(3)(A) of
the Code; and (4) satisfies the statement requirement, described generally
below, set forth in Section 871(h) and Section 881(c) of the Code and the
regulations thereunder.
To satisfy the requirement referred to in clause (4) above, the beneficial
owner of a Security, or a financial institution holding the Security on behalf
of such owner, must provide, in accordance with specified procedures, Northrop
Systems or Northrop Systems' paying agent with a statement to the effect that
the beneficial owner is not a U.S. person. These requirements will be met if
(1) the beneficial owner provides his name and address, and certifies, under
penalties of perjury, that he is not a U.S. person, which certification may be
made on an IRS Form W-8BEN; or (2) a financial institution holding the Security
on behalf of the beneficial owner certifies, under penalties of perjury, that
such statement has been received by it and furnishes a paying agent with a copy
thereof.
In the event that any of the above requirements are not satisfied, Northrop
Systems will nonetheless not withhold federal income tax on interest paid to a
Non-United States Holder if it receives IRS Form W-8ECI from that Non-United
States Holder, establishing that such income is effectively connected with the
conduct of a trade or business in the United States, unless Northrop Systems
has knowledge to the contrary. Interest paid to a Non-United States Holder that
is effectively connected with the conduct by the holder of a trade or business
in the United States is generally taxed at graduated rates that are applicable
to U.S. persons. In the case of a Non-United States Holder that is a
corporation, such effectively connected income may also be subject to the
United States federal branch profits tax, which is generally imposed on a
foreign corporation on the deemed repatriation from the United States of
effectively connected earnings and profits, at a 30% rate, unless the rate is
reduced or eliminated by an applicable income tax treaty and the Non-United
States Holder is a qualified resident of the treaty country.
44
Sale, Exchange and Redemption of the Securities
A Non-United States Holder will generally not be subject to United States
federal income tax with respect to gain recognized on a sale, exchange or
redemption of a Security unless (1) the gain is effectively connected with a
trade or business of the Non-United States Holder in the United States; (2) in
the case of a Non-United States Holder who is an individual and holds the
Security as a capital asset, such holder is present in the United States for
183 or more days in the taxable year of the sale or other disposition and
certain other conditions are met; (3) Northrop Systems is or has been a "United
States real property holding corporation" for United States federal income tax
purposes; or (4) the Non-United States Holder is subject to tax pursuant to
certain provisions of the Code applicable to United States expatriates.
However, any amount attributable to accrued but unpaid interest on the Security
will be treated in the same manner as payments of interest made to such Non-
United States Holder, as described above.
Gain derived by a Non-United States Holder from the sale or other
disposition of a Security that is effectively connected with the conduct by the
holder of a trade or business in the United States is generally taxed at the
graduated rates that are applicable to United States persons. In the case of a
Non-United States Holder that is a corporation, such effectively connected
income may also be subject to the United States branch profits tax. If any
individual Non-United States Holder falls under clause (2) of the preceding
paragraph, such holder will be subject to a flat 30% tax on the gain derived
from the sale or other disposition, which may be offset by certain United
States source capital losses recognized within the same taxable year as such
sale or other disposition.
United States Federal Estate Tax Consequences
Securities held by an individual Non-Unites States Holder at the time of
death will be included in the holder's gross estate for United States federal
estate tax purposes, and may be subject to United States federal estate tax,
unless an applicable estate tax treaty provides otherwise.
Information Reporting and Backup Withholding
Payments of interest on, or the proceeds from the sale, retirement or other
disposition of Securities are subject to information reporting unless the
United States Holder establishes an exemption.
Payments of the interest on, or the proceeds from the sale, retirement, or
other disposition of the Securities may be subject to "backup withholding" tax
of 31% if the United States Holder, among other things, (1) fails to furnish
his or her social security number or other taxpayer identification number, or
TIN, to the payor responsible for backup withholding (for example, the United
States Holder's securities broker) on Form W-9 or a substantially similar form
signed under penalty of perjury, (2) furnishes such payor an incorrect TIN, (3)
fails to provide such payor with a certified statement, signed under penalties
of perjury, that the TIN provided to the payor is correct and that the United
States Holder is not subject to backup withholding, or (4) fails to properly
report interest and dividends on his tax return. Backup withholding does not
apply to certain payments made to exempt recipients, such as corporations.
Non-United States Holders will not be subject to information reporting or
backup withholding on payments made by Northrop Systems or its paying agent if
a statement described in clause (4) under "--Non-United States Holders--Payment
of Interest" has been received and the payor has no actual knowledge that the
beneficial owner is a United States person.
In addition, backup withholding and information reporting will not apply to
payments or principal, premium, if any, or interest on the Securities paid or
collected by a foreign office of a custodian, nominee or other foreign agent on
behalf of a Non-United States Holder, or if a foreign office of a broker pays
the proceeds of the sale of Securities to a Non-United States Holder. If,
however, such nominee, custodian, agent or broker is, for United States federal
income tax purposes, a United States person, a controlled foreign corporation
or a
45
foreign person that derives 50% or more of its gross income for certain periods
from the conduct of a U.S. trade or business, or a foreign partnership with
certain connections to the United States, such payments will be subject to
information reporting unless (i) such custodian, nominee, agent or broker has
documentary evidence that the beneficial owner is not a United States person
and certain other conditions are met, or (ii) the beneficial owner otherwise
establishes an exemption.
Payments of principal, premium, if any, or interest on the Securities paid
to a Non-United States Holder by a United States office of a custodian, nominee
or agent, or payment of the proceeds of a sale of Securities by the United
States office of a broker will be subject to backup withholding and information
reporting unless (i) the Non-United States Holder provides the statement
described above that the holder is not a United States person and the payor
does not have actual knowledge to the contrary, or (ii) the beneficial owner
otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules will be allowed as a
credit or a refund against such holder's United States federal income tax
liability, if certain required information is provided to the Internal Revenue
Service.
46
PLAN OF DISTRIBUTION
This Exchange Offer is made to existing holders of the Outstanding
Securities. Each broker-dealer that receives Exchange Securities for its own
account pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of those Exchange Securities. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received
in exchange for Outstanding Securities where such Outstanding Securities were
acquired as a result of market-making activities or other trading activities.
We have agreed that, for a period of 180 days after the expiration date, we
will make this prospectus, as amended or supplemented, available to any broker-
dealer for use in connection with any such resale. In addition, until ,
2001, all dealers effecting transactions in Exchange Securities may be required
to deliver a prospectus.
We will not receive any proceeds from any sale of Exchange Securities by
broker-dealers. Exchange Securities received by broker-dealers for their own
account pursuant to the exchange offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the Exchange Securities or a combination of
such methods of resale, at market prices prevailing at the time of resale, at
prices related to such prevailing market prices or negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from any
such broker-dealer or the purchasers of any such Exchange Securities. Any
broker-dealer that resells Exchange Securities that were received by it for its
own account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such Exchange Securities may be deemed to be
an "underwriter" within the meaning of the Securities Act, and any profit on
any such resale of Exchange Securities and any commission or concessions
received by any such persons may be deemed to be underwriting compensation
under the Securities Act. The letter of transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an "underwriter" within the
meaning the Securities Act.
For a period of 180 days after the expiration date we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests such documents in the letter of
transmittal. We have agreed to pay all expenses incident to the exchange offer
(including the expenses of one counsel for the holders of the Outstanding
Securities and Exchange Securities) other than commissions or concessions of
any brokers or dealers and will indemnify the holders of Outstanding Securities
and Exchange Securities (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
47
LEGAL MATTERS
The validity of the Exchange Securities will be passed upon for Northrop
Systems by Sheppard, Mullin, Richter & Hampton LLP, Los Angeles, California.
EXPERTS
The consolidated financial statements and related financial statement
schedule incorporated in this prospectus by reference from Northrop Systems'
Annual Report on Form 10-K/A for the year ended December 31, 2000 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
With respect to the unaudited interim financial information of Northrop
Grumman for the period ended March 31, 2001 and Northrop Systems for the period
ended March 31, 2000 which is incorporated herein by reference, Deloitte &
Touche LLP have applied limited procedures in accordance with professional
standards for a review of such information. However, as stated in their report
included in Northrop Grumman's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2001 and incorporated by reference herein, they did not audit
and they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their report on such information should
be restricted in light of the limited nature of the review procedures applied.
Deloitte & Touche LLP are not subject to the liability provisions of Section 11
of the Securities Act of 1933 for their report on the unaudited interim
financial information because such report is not a "report" or a "part" of the
registration statement prepared or certified by an accountant within the
meaning of Sections 7 and 11 of the Act.
The consolidated financial statements incorporated in this prospectus by
reference from Litton's Annual Report on Form 10-K for the year ended July 31,
2000 have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference, and have
been so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
EXCHANGE AGENT
The exchange agent for the exchange offer is:
THE CHASE MANHATTAN BANK
By Mail:
P.O. Box 2320
Dallas, TX 75221-2320
Attn: Events
By Hand Delivery or Overnight Courier:
2001 Bryan Street, 9th Floor
Dallas, TX 75201
Attn: Events
By Facsimile Transmission:
(214) 468-6494
For Information or Confirmation by Telephone:
(800) 275-2048
48
[LOGO OF NORTHROP GRUMMAN]
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Northrop Systems. Section 145 of the DGCL, provides that a corporation may
indemnify directors and officers as well as other employees and individuals
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement in connection with specified actions, suits or proceedings,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation--a "derivative action") if they acted in
good faith and in a manner they reasonably believed to be in or not opposed to
the best interests of the corporation and, with respect to any criminal action
or proceedings, had no reasonable cause to believe their conduct was unlawful.
A similar standard is applicable in the case of derivative actions, except
that indemnification only extends to expenses (including attorneys' fees)
actually and reasonably incurred in connection with the defense or settlement
of such action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, bylaws,
disinterested director vote, stockholder vote, agreement or otherwise.
As permitted by Section 145 of the DGCL, Article EIGHTEENTH of Northrop
Systems' restated certificate of incorporation, as amended, provides:
"A director of the Corporation shall not be personally liable to the
Corporation or to its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or to its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General Corporation
Law of the State of Delaware, or (iv) for any transaction from which the
director derives any improper personal benefit. If, after approval of this
Article by the stockholders of the Corporation, the General Corporation Law of
the State of Delaware is amended to authorize the further elimination or
limitation of the liability of directors, then the liability of a director of
the Corporation shall be eliminated or limited to the fullest extent permitted
by the General Corporation Law of the State of Delaware, as so amended. Any
repeal or modification of this Article by the stockholders of the Corporation
as provided in Article Seventeen hereof shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification."
Northrop Grumman. Article EIGHTEENTH of Northrop Grumman's restated
certificate of incorporation, as amended, is identical to Article EIGHTEENTH of
Northrop Systems' restated certificate of incorporation, as amended.
Northrop Systems and Northrop Grumman maintain insurance which insures
directors and officers for acts committed in such capacities.
Litton. Litton's restated certificate of incorporation, as amended, provides
that Litton may indemnify its agents to the maximum extent permitted under
Delaware law, and Litton maintains insurance covering certain liabilities of
the directors and officers of Litton and its subsidiaries.
II-1
ITEM 21. EXHIBITS
Exhibit
Number Description of Exhibit
------- ----------------------
4.1 Indenture dated as of October 15, 1994 (incorporated by reference to
Form 8-K filed by Northrop Systems on October 25, 1994)
4.2 Form of Officer's Certificate (with forms of guarantees and forms of
Securities attached) establishing the terms of Northrop Systems' 7
1/8% Exchange Notes due 2011 and 7 3/4% Exchange Debentures due 2031
(incorporated by reference to Form 8-K filed by Northrop Grumman on
April 17, 2001)
4.3 Form of Northrop Systems' 7 1/8% Exchange Notes Due 2011
4.4 Form of Northrop Systems' 7 3/4% Exchange Debentures Due 2031
4.5 Registration Rights Agreement, dated February 27, 2001, among Northrop
Systems and the initial purchasers named therein
5.1 Opinion of Sheppard, Mullin, Richter & Hampton, LLP
12.1 Statement regarding computation of earnings to fixed charges ratio
15.1 Letter from independent accountants regarding unaudited interim
financial information
23.1 Consent of Deloitte & Touche LLP with respect to Northrop Systems
23.2 Consent of Deloitte & Touche LLP with respect to Litton
24.1 Power of Attorney
24.2 Power of Attorney
25.1 Form T-1 Statement of Eligibility and Qualification of the Chase
Manhattan Bank, as trustee
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Tender Instructions
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment of this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimate
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
II-2
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
undersigned registrant's annual reports pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrants of expenses incurred or paid by a director, officer or controlling
person of the registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrants will, unless
in the opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of Form S-4, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
The undersigned registrants hereby undertake to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
the registration statement when it became effective.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles, State of
California, on May 23, 2001.
NORTHROP GRUMMAN SYSTEMS CORPORATION,
formerly Northrop Grumman Corporation
/s/ John H. Mullan
By: _____________________________________
Name: John H. Mullan
Title: Corporate Vice President,
Secretary and Associate
General Counsel
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of W. Burks Terry and John H. Mullan with
full power to act alone, as his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him or her and
in his or her name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed by the registrant
pursuant to Rule 462(b) of the Securities Act, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the SEC,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his or her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* Chairman of the Board, May 23, 2001
____________________________________ President and Chief
Kent Kresa Executive Officer and
Director (Principal
Executive Officer)
* Corporate Vice President and May 23, 2001
____________________________________ Chief Financial Officer
Richard B. Waugh, Jr. (Principal Financial
Officer)
* Corporate Vice President and May 23, 2001
____________________________________ Controller (Principal
Robert B. Spiker Accounting Officer)
* Director May 23, 2001
____________________________________
Lewis W. Coleman
* Director May 23, 2001
____________________________________
John T. Chain, Jr.
S-1
Signature Title Date
--------- ----- ----
* Director May 23, 2001
____________________________________
Vic Fazio
* Director May 23, 2001
____________________________________
Phillip Frost
* Director May 23, 2001
____________________________________
Charles R. Larson
* Director May 23, 2001
____________________________________
Robert A. Lutz
* Director May 23, 2001
____________________________________
Aulana L. Peters
* Director May 23, 2001
____________________________________
John E. Robson
Director
____________________________________
John Brooks Slaughter
* Director and Corporate May 23, 2001
____________________________________ Vice President
Ronald D. Sugar
/s/ John H. Mullan
*By:___________________________
John H. Mullan
Attorney-in-Fact
S-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles, State of
California, on May 23, 2001.
NORTHROP GRUMMAN CORPORATION,
formerly NNG, Inc.
/s/ John H. Mullan
By: _________________________________
Name: John H. Mullan
Title: Corporation Vice
President, Secretary and
Associate General Counsel
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of W. Burks Terry and John H. Mullan with
full power to act alone, as his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him or her and
in his or her name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed by the registrant
pursuant to Rule 462(b) of the Securities Act, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the SEC,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his or her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* Chairman of the Board, May 23, 2001
____________________________________ President and Chief
Kent Kresa Executive Officer and
Director (Principal
Executive Officer)
* Corporate Vice President and May 23, 2001
____________________________________ Chief Financial Officer
Richard B. Waugh, Jr. (Principal Financial
Officer)
* Corporate Vice President and May 23, 2001
____________________________________ Controller (Principal
Robert B. Spiker Accounting Officer)
* Director May 23, 2001
____________________________________
Lewis W. Coleman
S-3
Signature Title Date
--------- ----- ----
* Director May 23, 2001
____________________________________
John T. Chain, Jr.
* Director May 23, 2001
____________________________________
Vic Fazio
* Director May 23, 2001
____________________________________
Phillip Frost
* Director May 23, 2001
____________________________________
Charles R. Larson
* Director May 23, 2001
____________________________________
Robert A. Lutz
* Director May 23, 2001
____________________________________
Aulana L. Peters
* Director May 23, 2001
____________________________________
John E. Robson
Director
____________________________________
John Brooks Slaughter
* Director and Corporate Vice May 23, 2001
____________________________________ President
Ronald D. Sugar
/s/ John H. Mullan
*By: ____________________________
John H. Mullan
Attorney-in-Fact
S-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles, State of
California, on May 23, 2001.
LITTON INDUSTRIES, INC.
/s/ John H. Mullan
By: _________________________________
Name:John H. Mullan
Title: Corporation Vice
President, Secretary and
Associate General Counsel
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of W. Burks Terry and John H. Mullan with
full power to act alone, as his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him or her and
in his or her name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed by the registrant
pursuant to Rule 462(b) of the Securities Act, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the SEC,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his or her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* Chief Executive Officer May 23, 2001
____________________________________ (Principal Executive
Ronald D. Sugar Officer)
* Senior Vice President and May 23, 2001
____________________________________ Chief Financial Officer
D. Michael Steuert (Principal Financial
Officer)
* Vice President and May 23, 2001
____________________________________ Controller (Principal
Sandra J. Wright Accounting Officer)
* Director May 23, 2001
____________________________________
Alton J. Brann
* Director May 23, 2001
____________________________________
Joseph T. Casey
S-5
Signature Title Date
--------- ----- ----
* Director May 23, 2001
____________________________________
J. Michael Hately
* Director May 23, 2001
____________________________________
John M. Leonis
* Director May 23, 2001
____________________________________
John H. Mullan
* Director May 23, 2001
____________________________________
Albert F. Myers
* Director May 23, 2001
____________________________________
Robert B. Spiker
* Director May 23, 2001
____________________________________
W. Burks Terry
/s/ John H. Mullan
*By: __________________________
John H. Mullan
Attorney-in-Fact
S-6
EXHIBIT LIST
Exhibit
No. Description
------- -----------
4.3 Form of 7 1/8% Exchange Notes Due 2011
4.4 Form of 7 3/4% Exchange Debentures Due 2031
4.5 Registration Rights Agreement, dated February 27, 2001 among Northrop
Systems and the initial purchasers named therein
5.1 Opinion of Sheppard, Mullin, Richter & Hampton LLP
12.1 Statement regarding computation of earnings to fixed charges ratio
15.1 Letter from independent accountants regarding unaudited interim
financial information
23.1 Consent of Deloitte & Touche LLP with respect to Northrop Grumman
23.2 Consent of Deloitte & Touche LLP with respect to Litton
24.1 Power of Attorney
24.2 Power of Attorney
25.1 Form T-1 Statement of Eligibility and Qualification of The Chase
Manhattan Bank, as trustee
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Tender Instructions
EXHIBIT 4.3
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED IN THE NAME OF, ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
NORTHROP GRUMMAN SYSTEMS CORPORATION
7-1/8% NOTE DUE 2011
No. __ $ _________________
CUSIP 666807 AW 2
Northrop Grumman Systems Corporation, formerly Northrop Grumman
Corporation, a corporation duly organized and existing under the laws of
Delaware (herein called the "Company," which term includes any successor Person
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to Cede & Co., or registered assigns, the principal sum of
$_____________ on February 15, 2011 and to pay interest thereon from February
27, 2001 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on February 15 and August 15 in
each year, commencing August 15, 2001 at the rate of 7-1/8% per annum, until the
principal hereof is paid or made available for payment; provided, that in the
--------
event of a Non-Registration Event (as defined in the Registration Rights
Agreement dated as of February 27, 2001 by and among the Company and the initial
purchasers identified therein) with respect to the Securities of this series,
additional interest will accrue on such Securities at an annual rate of .25% for
the first 90-day period immediately following the occurrence of a Non-
Registration Event, and such annual rate will increase by an additional .25%
with respect to each
1
subsequent 90-day period until all Non-Registration Events have been cured, up
to a maximum additional annual interest rate of 1.0%. The additional interest
will accrue from and including the date on which any such Non-Registration Event
shall occur to but excluding the date on which all such Non-Registration Events
have been cured. The Company will pay such additional interest on each Interest
Payment Date. Such additional interest will be in addition to any other interest
payable from time to time with respect to the Securities of this series.
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the February 1 or August 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and any such interest on
this Security will be made in immediately available funds at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
the City of New York in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made by wire transfer in immediately available funds to an account maintained by
the person entitled thereto as specified in the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
[SIGNATURE PAGE FOLLOWS]
2
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: _________, 2001
NORTHROP GRUMMAN SYSTEMS
CORPORATION (formerly
Northrop Grumman Corporation)
By _______________________________
Albert F. Myers
Corporate Vice President
and Treasurer
Attest:
[SEAL] By _______________________________
John H. Mullan
Corporate Vice President
and Secretary
This is one of the Securities of the series designated on the face hereof
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, As Trustee
By ___________________________________
Authorized Officer
3
[REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of October 15, 1994 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are and are to be authenticated and delivered. This
Security is one of the series designated on the face hereof. The Securities are
unsecured general obligations of the Company.
The Securities of this series are subject to redemption upon not less than
30 days notice by mail, as a whole or in part, at the election of the Company at
a Redemption Price equal to the greater of (a) the principal amount of the
Securities being redeemed plus accrued and unpaid interest to the Redemption
Date or (2) the Make-Whole Amount for the Securities being redeemed.
As used in this Security:
"Adjusted Treasury Rate" means, with respect to any Redemption Date,
(i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15 (519)" or any successor publication
which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months before or
after the remaining term of the Securities being redeemed, yields for the
two published maturities most closely corresponding to the Comparable
Treasury Issue shall be determined and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or
does not contain such yields, the rate per year equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury
Price for such Redemption Date, in each case calculated on the third
Business Day preceding the Redemption Date, plus .25%.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
remaining term from the Redemption Date to the Stated Maturity of the
4
principal amount of the Securities being redeemed that would be utilized,
at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of this Security.
"Comparable Treasury Price" means, with respect to any Redemption
Date, if clause (ii) of the Adjusted Treasury Rate is applicable, the
average of three, or such lesser number as is obtained by the Trustee,
Reference Treasury Dealer Quotations for such Redemption Date.
"Make Whole Amount" means the sum, as determined by a Quotation Agent,
of the present values of the principal amount of the Securities to be
redeemed, together with scheduled payments of interest (exclusive of
interest to the Redemption Rate) from the Redemption Date to the Stated
Maturity of the principal amount of the Securities being redeemed, in each
case discounted to the Redemption Date on a semi-annual basis, assuming a
360-day year consisting of twelve 30-day months, at the Adjusted Treasury
Rate, plus accrued interest on the principal amount of the Securities being
redeemed to the Redemption Date.
"Quotation Agent" means the Reference Treasury Dealer selected by the
Trustee after consultation with the Company.
"Reference Treasury Dealer" means any of Chase Securities Inc. and
Credit Suisse First Boston Corporation, and their respective successors and
assigns, and one other nationally recognized investment banking firm
selected by the Company that is a primary U.S. Government securities
dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue, expressed in each case as a percentage of its principal
amount, quoted in writing to the Trustee by such Reference Treasury Dealer
at 5:00 p.m., New York City time, on the third Business Day preceding such
Redemption Date.
In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Security or certain restrictive covenants and Events of
Default with respect to this Security, in each case upon compliance with certain
conditions set forth in the Indenture.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
5
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
6
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
7
EXHIBIT 4.4
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED IN THE NAME OF, ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHOIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
NORTHROP GRUMMAN SYSTEMS CORPORATION
7-3/4% DEBENTURE DUE 2031
No. __ $ _________________
CUSIP 666807 AT 9
Northrop Grumman Systems Corporation, formerly Northrop Grumman
Corporation, a corporation duly organized and existing under the laws of
Delaware (herein called the "Company," which term includes any successor Person
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to Cede & Co., or registered assigns, the principal sum of
$______________ on February 15, 2031 and to pay interest thereon from February
27, 2001 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on February 15 and August 15 in
each year, commencing August 15, 2001 at the rate of 7-3/4% per annum, until the
principal hereof is paid or made available for payment; provided, that in the
--------
event of a Non-Registration Event (as defined in the Registration Rights
Agreement dated as of February 27, 2001 by and among the Company and the initial
purchasers identified therein) with respect to the Securities of this series,
additional interest will accrue on such Securities at an annual rate of .25% for
the first 90-day period immediately following the occurrence of a Non-
Registration Event, and such annual rate will increase by an additional .25%
with respect to each subsequent 90-day period until all Non-Registration Events
have been cured, up to a maximum additional annual interest rate of 1.0%. The
additional interest will accrue
1
from and including the date on which any such Non-Registration Event shall occur
to but excluding the date on which all such Non-Registration Events have been
cured. The Company will pay such additional interest on each Interest Payment
Date. Such additional interest will be in addition to any other interest payable
from time to time with respect to the Securities of this series. Interest shall
be computed on the basis of a 360-day year of twelve 30-day months. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, which shall be the
February 1 or August 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and any such interest on
this Security will be made in immediately available funds at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
the City of New York in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made by wire transfer in immediately available funds to an account maintained by
the person entitled thereto as specified in the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
[SIGNATURE PAGE FOLLOWS]
2
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: _________, 2001
NORTHROP GRUMMAN SYSTEMS
CORPORATION (formerly Northrop Grumman
Corporation)
By _______________________________
Albert F. Myers
Corporate Vice President and Treasurer
Attest:
[SEAL] By _______________________________
John H. Mullan
Corporate Vice President and Secretary
This is one of the Securities of the series designated on the face hereof
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, As Trustee
By ___________________________________
Authorized Officer
3
[REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of October 15, 1994 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are and are to be authenticated and delivered. This
Security is one of the series designated on the face hereof. The Securities are
unsecured general obligations of the Company.
The Securities of this series are subject to redemption upon not less than
30 days notice by mail, as a whole or in part, at the election of the Company at
a Redemption Price equal to the greater of (a) the principal amount of the
Securities being redeemed plus accrued and unpaid interest to the Redemption
Date or (2) the Make-Whole Amount for the Securities being redeemed.
As used in this Security:
"Adjusted Treasury Rate" means, with respect to any Redemption Date,
(i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15 (519)" or any successor publication
which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months before or
after the remaining term of the Securities being redeemed, yields for the
two published maturities most closely corresponding to the Comparable
Treasury Issue shall be determined and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or
does not contain such yields, the rate per year equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury
Price for such Redemption Date, in each case calculated on the third
Business Day preceding the Redemption Date, plus .30%.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
remaining term from the Redemption Date to the Stated Maturity of the
principal amount of the Securities being redeemed that would be utilized,
at the
4
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to
the remaining term of this Security.
"Comparable Treasury Price" means, with respect to any Redemption
Date, if clause (ii) of the Adjusted Treasury Rate is applicable, the
average of three, or such lesser number as is obtained by the Trustee,
Reference Treasury Dealer Quotations for such Redemption Date.
"Make Whole Amount" means the sum, as determined by a Quotation
Agent, of the present values of the principal amount of the Securities to
be redeemed, together with scheduled payments of interest (exclusive of
interest to the Redemption Rate) from the Redemption Date to the Stated
Maturity of the principal amount of the Securities being redeemed, in each
case discounted to the Redemption Date on a semi-annual basis, assuming a
360-day year consisting of twelve 30-day months, at the Adjusted Treasury
Rate, plus accrued interest on the principal amount of the Securities being
redeemed to the Redemption Date.
"Quotation Agent" means the Reference Treasury Dealer selected by the
Trustee after consultation with the Company.
"Reference Treasury Dealer" means any of Chase Securities Inc. and
Credit Suisse First Boston Corporation, and their respective successors and
assigns, and one other nationally recognized investment banking firm
selected by the Company that is a primary U.S. Government securities
dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue, expressed in each case as a percentage of its principal
amount, quoted in writing to the Trustee by such Reference Treasury Dealer
at 5:00 p.m., New York City time, on the third Business Day preceding such
Redemption Date.
In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Security or certain restrictive covenants and Events of
Default with respect to this Security, in each case upon compliance with certain
conditions set forth in the Indenture.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
5
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
6
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
7
EXHIBIT 4.5
$1,500,000,000
NORTHROP GRUMMAN CORPORATION
7 1/8% NOTES DUE 2011
7 3/4% DEBENTURES DUE 2031
REGISTRATION RIGHTS AGREEMENT
-----------------------------
February 27, 2001
Credit Suisse First Boston Corporation
Chase Securities Inc.
As Representatives of the Several Initial Purchasers,
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010-3629
Dear Sirs:
Northrop Grumman Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to the several initial purchasers named in Schedule I
hereto (collectively, the "Initial Purchasers"), upon the terms set forth in a
purchase agreement of even date herewith (the "Purchase Agreement"), U.S.
$750,000,000 aggregate principal amount of its 7 1/8% Series A Notes due 2011
(the "Notes") and U.S. $750,000,000 aggregate principal amount of its 7 3/4%
Series A Debentures due 2031 (the "Debentures," and together with the Notes, the
"Initial Securities"). Upon consummation of the Merger (as defined in the
Purchase Agreement), NNG, Inc., a Delaware corporation ("NNG"), and Litton
Industries, Inc., a Delaware corporation ("Litton"), will execute guarantees
(the "Guarantees") with respect to the Securities (as defined below) (each of
Litton and NNG, a "Guarantor" and, collectively, the "Guarantors"). The Initial
Securities will be issued pursuant to an Indenture, dated as of October 15, 1994
among the Company and The Chase Manhattan Bank, as trustee (the "Trustee"), as
supplemented by an Officers' Certificate dated as of February 22, 2001
(collectively, the "Indenture"). As an inducement to the Initial Purchasers to
enter into the Purchase Agreement, the Company agrees with the Initial
Purchasers (and the Guarantors who will, upon consummation of the Merger, become
parties hereto, will so agree as to their Guarantees of the Securities (as
defined below)), for the benefit of the Initial Purchasers and the holders of
the Securities (collectively the "Holders"), as
1
follows (references below to the "Company" shall be deemed to include the
Guarantors upon the date of the consummation of the Merger):
1. Registered Exchange Offer. Unless not permitted by applicable law
(after the Company has complied with the ultimate paragraph of this Section 1),
the Company shall prepare and, not later than 120 days (such 120th day being a
"Filing Deadline") after the date on which the Initial Purchasers purchase the
Initial Securities pursuant to the Purchase Agreement (the "Closing Date"), file
with the Securities and Exchange Commission (the "Commission") a registration
statement (the "Exchange Offer Registration Statement") on an appropriate form
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to a proposed offer (the "Registered Exchange Offer") to the Holders of
Transfer Restricted Securities (as defined in Section 6 hereof), who are not
prohibited by any law or policy of the Commission from participating in the
Registered Exchange Offer, to issue and deliver to such Holders, in exchange for
the Initial Securities, a like aggregate principal amount of debt securities of
the Company issued under the Indenture, identical in all material respects to
the Initial Securities and registered under the Securities Act (the "Exchange
Securities," which term shall include the Guarantees thereof). The Company
shall use its best efforts to (i) cause such Exchange Offer Registration
Statement to become effective under the Securities Act within 180 days after the
Closing Date (such 180th day being an "Effectiveness Deadline") and (ii) keep
the Exchange Offer Registration Statement effective for not less than 30 days
(or longer, if required by applicable law) after the date notice of the
Registered Exchange Offer is mailed to the Holders (such period being called the
"Exchange Offer Registration Period"). The date notice of the Registered
Exchange Offer is mailed to the Holders shall be called the "commencement" of
the Registered Exchange Offer.
If the Company commences the Registered Exchange Offer, the Company (i)
will be entitled to consummate the Registered Exchange Offer 30 days after such
commencement (provided that the Company has accepted all the Initial Securities
theretofore validly tendered in accordance with the terms of the Registered
Exchange Offer) and (ii) will be required to consummate the Registered Exchange
Offer no later than 40 days after the date on which the Exchange Offer
Registration Statement is declared effective (such 40th day being the
"Consummation Deadline").
Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder of Transfer Restricted Securities electing to exchange the
Initial Securities for Exchange Securities (assuming that such Holder is not an
affiliate of the Company within the meaning of the Securities Act, acquires the
Exchange Securities in the ordinary course of such Holder's business and has no
arrangements with any person to participate in the distribution of the Exchange
Securities and is not prohibited by any law or policy of the Commission from
participating in the Registered Exchange Offer) to trade such Exchange
Securities from and after their receipt without any limitations or restrictions
under the Securities Act and
2
without material restrictions under the securities laws of the several states of
the United States.
The Company acknowledges that, pursuant to current interpretations by the
Commission's staff of Section 5 of the Securities Act, in the absence of an
applicable exemption therefrom, (i) each Holder which is a broker-dealer
electing to exchange Initial Securities, acquired for its own account as a
result of market making activities or other trading activities, for Exchange
Securities (an "Exchanging Dealer"), is required to deliver a prospectus
containing the information set forth in (a) Annex A hereto on the cover, (b)
Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of
the Exchange Offer" section, and (c) Annex C hereto in the "Plan of
Distribution" section of such prospectus in connection with a sale of any such
Exchange Securities received by such Exchanging Dealer pursuant to the
Registered Exchange Offer and (ii) an Initial Purchaser that elects to sell
Securities (as defined below) acquired in exchange for Initial Securities
constituting any portion of an unsold allotment, is required to deliver a
prospectus containing the information required by Items 507 or 508 of Regulation
S-K under the Securities Act, as applicable, in connection with such sale.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the prospectus
contained therein, in order to permit such prospectus to be lawfully delivered
by all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided, however, that (i) in the
-------- -------
case where such prospectus and any amendment or supplement thereto must be
delivered by an Exchanging Dealer or an Initial Purchaser, such period shall be
the lesser of 180 days and the date on which all Exchanging Dealers and the
Initial Purchasers have sold all Exchange Securities held by them (unless such
period is extended pursuant to Section 3(j) below or a Shelf Registration
Statement is applicable and useable) and (ii) the Company shall make such
prospectus and any amendment or supplement thereto available to any broker-
dealer for use in connection with any resale of any Exchange Securities for a
period of not less than 180 days after the consummation of the Registered
Exchange Offer (the "Expiration Date").
If, upon consummation of the Registered Exchange Offer, any Initial
Purchaser holds Initial Securities acquired by it as part of its initial
distribution, the Company, simultaneously with the delivery of the Exchange
Securities pursuant to the Registered Exchange Offer, shall issue and deliver to
such Initial Purchaser upon the written request of such Initial Purchaser, in
exchange (the "Private Exchange") for the Initial Securities held by such
Initial Purchaser, a like principal amount of debt securities of the Company
issued under the Indenture and identical in all material respects to the Initial
Securities (the "Private Exchange Securities," which term shall include the
Guarantees thereof). The Initial Securities, the Exchange Securities and the
Private Exchange Securities, and the Guarantees thereof, are herein collectively
called the "Securities."
In connection with the Registered Exchange Offer, the Company shall:
3
(a) mail to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than 30 days
(or longer, if required by applicable law) after the date notice thereof is
mailed to the Holders;
(c) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New York,
which may be the Trustee or an affiliate of the Trustee;
(d) permit Holders to withdraw tendered Initial Securities at any time
prior to the close of business, New York time, on the last business day on
which the Registered Exchange Offer shall remain open; and
(e) otherwise comply with all applicable laws.
As soon as practicable after the close of the Registered Exchange Offer or
the Private Exchange, as the case may be, the Company shall:
(x) accept for exchange all the Initial Securities validly tendered
and not withdrawn pursuant to the Registered Exchange Offer or the Private
Exchange;
(y) deliver to the Trustee for cancellation all the Initial Securities
so accepted for exchange; and
(z) cause the Trustee to authenticate and deliver promptly to each
Holder of Initial Securities, Exchange Securities or Private Exchange
Securities, as the case may be, equal in principal amount to the Initial
Securities of such Holder so accepted for exchange.
The Indenture provides that the Exchange Securities will not be subject to
the transfer restrictions set forth in the Indenture and that all the holders of
the Notes or the Debentures, as the case may be, will vote and consent together
on all matters as one class and that none of the holders of the Notes or the
Debentures, as the case may be, will have the right to vote or consent as a
class separate from one another on any matter.
Interest on each Exchange Security and Private Exchange Security issued
pursuant to the Registered Exchange Offer or in the Private Exchange will accrue
from the last interest payment date on which interest was duly paid on the
Initial Securities surrendered in exchange therefor or, if no interest has been
paid on the Initial Securities, from the date of original issue of the Initial
Securities. Holders whose Initial Securities are accepted for
4
exchange will be deemed to have waived the right to receive any interest accrued
on such exchanged securities.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Initial Securities or the Exchange Securities within the
meaning of the Securities Act, (iii) such Holder is not an "affiliate," as
defined in Rule 405 of the Securities Act, of the Company or if it is an
affiliate, such Holder will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable, (iv) if such Holder
is not a broker-dealer, that it is not engaged in, and does not intend to engage
in, the distribution of the Exchange Securities and (v) if such Holder is a
broker-dealer, that it will receive Exchange Securities for its own account in
exchange for Initial Securities that were acquired as a result of market-making
activities or other trading activities and that it will deliver a prospectus in
connection with any resale of such Exchange Securities.
Notwithstanding any other provisions hereof, the Company will ensure that
(i) any Exchange Offer Registration Statement and any amendment thereto and any
prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations
thereunder, (ii) any Exchange Offer Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus
forming part of any Exchange Offer Registration Statement, and any supplement to
such prospectus, does not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
If following the date hereof there has been announced a change in
Commission policy with respect to exchange offers that in the reasonable opinion
of counsel to the Company raises a substantial question as to whether the
Registered Exchange Offer is permitted by applicable federal law, the Company
will seek a no-action letter or other favorable decision from the Commission
allowing the Company to consummate the Registered Exchange Offer. The Company
will pursue the issuance of such a decision to the Commission staff level. In
connection with the foregoing, the Company will take all such other actions as
may be requested by the Commission or otherwise required in connection with the
issuance of such decision, including without limitation (i) participating in
telephonic conferences with the Commission, (ii) delivering to the Commission
staff an analysis prepared by counsel to the Company setting forth the legal
bases, if any, upon which such counsel has concluded that the Registered
Exchange Offer should be permitted and (iii) diligently pursuing a resolution
(which need not be favorable) by the Commission staff.
5
2. Shelf Registration. If, (i) because of any change in law or in
applicable interpretations thereof by the staff of the Commission, the Company
is not permitted to effect a Registered Exchange Offer, as contemplated by
Section 1 hereof, (ii) the Registered Exchange Offer is not consummated by the
220th day after the Closing Date, (iii) any Initial Purchaser so requests within
20 business days following the consummation of the Registered Exchange Offer
with respect to the Initial Securities (or the Private Exchange Securities) not
eligible to be exchanged for Exchange Securities in the Registered Exchange
Offer and held by it following consummation of the Registered Exchange Offer or
(iv) any Holder is not eligible to participate in the Registered Exchange Offer
or, in the case of any Holder that participates in the Registered Exchange
Offer, such Holder does not receive freely tradeable Exchange Securities on the
date of the exchange and any such Holder so requests within 20 business days
following the consummation of the Registered Exchange Offer, the Company shall
take the following actions (the date on which any of the conditions described in
the foregoing clauses (i) through (iv) occur, including in the case of clauses
(iii) or (iv) the receipt of the required notice, being a "Trigger Date"):
(a) The Company shall promptly (but in no event more than 30 days
after the Trigger Date (such 30th day being a "Filing Deadline")) file with
the Commission and thereafter use its best efforts to cause to be declared
effective no later than 150 days after the Trigger Date (such 150th day
being an "Effectiveness Deadline") a registration statement (the "Shelf
Registration Statement" and, together with the Exchange Offer Registration
Statement, a "Registration Statement") on an appropriate form under the
Securities Act relating to the offer and sale of the Transfer Restricted
Securities by the Holders thereof from time to time in accordance with the
methods of distribution set forth in the Shelf Registration Statement and
Rule 415 under the Securities Act (hereinafter, the "Shelf Registration");
provided, however, that no Holder (other than an Initial Purchaser) shall
-------- -------
be entitled to have the Securities held by it covered by such Shelf
Registration Statement unless such Holder agrees in writing to be bound by
all the provisions of this Agreement applicable to such Holder.
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the
prospectus included therein to be lawfully delivered by the Holders of the
relevant Securities, for a period of two years (or for such longer period
if extended pursuant to Section 3(j) below) from the date of its
effectiveness or such shorter period that will terminate when all the
Securities covered by the Shelf Registration Statement (i) have been sold
pursuant thereto or (ii) are saleable without registration under the
Securities Act pursuant to Rule 144(k) or any successor statute (the "Shelf
Registration Period"). The Company shall be deemed not to have used its
best efforts to keep the Shelf Registration Statement effective during the
requisite period if it voluntarily takes any action that would result in
Holders of Securities covered
6
thereby not being able to offer and sell such Securities during that
period, unless such action is required by applicable law.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall cause the Shelf Registration Statement and the
related prospectus and any amendment or supplement thereto, as of the
effective date of the Shelf Registration Statement, amendment or
supplement, (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission and (ii) not to contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
3. Registration Procedures. In connection with any Shelf Registration
contemplated by Section 2 hereof and, to the extent applicable, any Registered
Exchange Offer contemplated by Section 1 hereof, the following provisions shall
apply:
(a) The Company shall (i) furnish to each Initial Purchaser, prior to
the filing thereof with the Commission, a copy of the Registration
Statement and each amendment thereof and each supplement, if any, to the
prospectus included therein and, in the event that an Initial Purchaser is
participating in the Registered Exchange Offer or the Shelf Registration
Statement, the Company shall use its best efforts to reflect in each such
document, when so filed with the Commission, such comments as such Initial
Purchaser reasonably may propose; (ii) include the information set forth in
Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
Procedures" section and the "Purpose of the Exchange Offer" section and in
Annex C hereto in the "Plan of Distribution" section of the prospectus
forming a part of the Exchange Offer Registration Statement and include the
information set forth in Annex D hereto in the Letter of Transmittal
delivered pursuant to the Registered Exchange Offer; (iii) if requested by
an Initial Purchaser, include the information required by Items 507 or 508
of Regulation S-K under the Securities Act, as applicable, in the
prospectus forming a part of the Shelf Registration Statement; (iv) include
within the prospectus contained in the Exchange Offer Registration
Statement a section entitled "Plan of Distribution," reasonably acceptable
to the Initial Purchasers, which shall contain a summary statement of the
positions taken or policies made by the staff of the Commission with
respect to the potential "underwriter" status of any broker-dealer that is
the beneficial owner (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) of Exchange
Securities received by such broker-dealer in the Registered Exchange Offer
(a "Participating Broker-Dealer"), whether such positions or policies have
been publicly disseminated by the staff of the Commission or such positions
or policies, in the reasonable judgment of the Initial Purchasers based
upon advice of counsel (which may be in-house counsel), represent the
prevailing views of the staff of the Commission; and (v) in the case of a
Shelf Registration Statement, include the names of the
7
Holders who propose to sell Securities pursuant to the Shelf Registration
Statement as selling security holders.
(b) The Company shall give written notice to the Initial Purchasers,
the Holders of the Securities included within the coverage of the
Registration Statement and any Participating Broker-Dealer from whom the
Company has received prior written notice that it will be a Participating
Broker-Dealer in the Registered Exchange Offer (which notice pursuant to
clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend
the use of the prospectus until the requisite changes have been made):
(i) when the Registration Statement or any amendment thereto has
been filed with the Commission and when the Registration Statement or
any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the prospectus included
therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of
the Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires the Company to
make changes in the Registration Statement or the prospectus in order
that the Registration Statement or the prospectus do not contain an
untrue statement of a material fact nor omit to state a material fact
required to be stated therein or necessary to make the statements
therein (in the case of the prospectus, in light of the circumstances
under which they were made) not misleading.
(c) The Company shall make every reasonable effort to obtain the
withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Registration Statement.
(d) The Company shall furnish to each Holder of Securities included
within the coverage of the Shelf Registration, without charge, at least one
copy of the Shelf Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if the Holder
so requests in writing, all exhibits thereto (including those, if any,
incorporated by reference).
8
(e) The Company shall deliver to each Exchanging Dealer and each
Initial Purchaser, and to any other Holder who so requests, without charge,
at least one copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules, and, if any Initial Purchaser or any such Holder requests, all
exhibits thereto (including those, if any, incorporated by reference).
(f) The Company shall, during the Shelf Registration Period, deliver
to each Holder of Securities included within the coverage of the Shelf
Registration, without charge, as many copies of the prospectus (including
each preliminary prospectus) included in the Shelf Registration Statement
and any amendment or supplement thereto as such person may reasonably
request. The Company consents, subject to the provisions of this
Agreement, to the use of the prospectus or any amendment or supplement
thereto by each of the selling Holders of the Securities in connection with
the offering and sale of the Securities covered by the prospectus, or any
amendment or supplement thereto, included in the Shelf Registration
Statement.
(g) The Company shall deliver to each Initial Purchaser, any
Exchanging Dealer, any Participating Broker-Dealer and such other persons
required to deliver a prospectus following the Registered Exchange Offer,
without charge, as many copies of the final prospectus included in the
Exchange Offer Registration Statement and any amendment or supplement
thereto as such persons may reasonably request. The Company consents,
subject to the provisions of this Agreement, to the use of the prospectus
or any amendment or supplement thereto by any Initial Purchaser, if
necessary, any Participating Broker-Dealer and such other persons required
to deliver a prospectus following the Registered Exchange Offer in
connection with the offering and sale of the Exchange Securities covered by
the prospectus, or any amendment or supplement thereto, included in such
Exchange Offer Registration Statement.
(h) Prior to any public offering of the Securities pursuant to any
Registration Statement the Company shall register or qualify or cooperate
with the Holders of the Securities included therein and their respective
counsel in connection with the registration or qualification of the
Securities for offer and sale under the securities or "blue sky" laws of
such states of the United States as any Holder of the Securities reasonably
requests in writing and do any and all other acts or things necessary or
advisable to enable the offer and sale in such jurisdictions of the
Securities covered by such Registration Statement; provided, however, that
-------- -------
the Company shall not be required to (i) qualify generally to do business
in any jurisdiction where it is not then so qualified or (ii) take any
action which would subject it to general service of process or to taxation
in any jurisdiction where it is not then so subject.
9
(i) The Company shall cooperate with the Holders of the Securities to
facilitate the timely preparation and delivery of certificates representing
the Securities to be sold pursuant to any Registration Statement free of
any restrictive legends and in such denominations and registered in such
names as the Holders may request a reasonable period of time prior to sales
of the Securities pursuant to such Registration Statement.
(j) Upon the occurrence of any event contemplated by paragraphs (ii)
through (v) of Section 3(b) above during the period for which the Company
is required to maintain an effective Registration Statement, the Company
shall promptly prepare and file a post-effective amendment to the
Registration Statement or a supplement to the related prospectus and any
other required document so that, as thereafter delivered to Holders of the
Securities or purchasers of Securities, the prospectus will not contain an
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,
in light of the circumstances under which they were made, not misleading.
If the Company notifies the Initial Purchasers, the Holders of the
Securities and any known Participating Broker-Dealer in accordance with
paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the
prospectus until the requisite changes to the prospectus have been made,
then the Initial Purchasers, the Holders of the Securities and any such
Participating Broker-Dealers shall suspend use of such prospectus, and the
period of effectiveness of the Shelf Registration Statement provided for in
Section 2(b) above and the Exchange Offer Registration Statement provided
for in Section 1 above shall each be extended by the number of days from
and including the date of the giving of such notice to and including the
date when the Initial Purchasers, the Holders of the Securities and any
known Participating Broker-Dealer shall have received such amended or
supplemented prospectus pursuant to this Section 3(j).
(k) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Initial
Securities, the Exchange Securities or the Private Exchange Securities, as
the case may be, and provide the applicable trustee with printed
certificates for the Initial Securities, the Exchange Securities or the
Private Exchange Securities, as the case may be, in a form eligible for
deposit with The Depository Trust Company.
(l) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the
Registered Exchange Offer or the Shelf Registration and will make generally
available to its security holders (or otherwise provide in accordance with
Section 11(a) of the Securities Act) an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act, no later than 45 days
after the end of a 12-month period (or 90 days, if such period is a fiscal
year) beginning with the first month of the
10
Company's first fiscal quarter commencing after the effective date of the
Registration Statement, which statement shall cover such 12-month period.
(m) The Company shall cause the Indenture to be qualified under the
Trust Indenture Act of 1939, as amended, in a timely manner and containing
such changes, if any, as shall be necessary for such qualification. In the
event that such qualification would require the appointment of a new
trustee under the Indenture, the Company shall appoint a new trustee
thereunder pursuant to the applicable provisions of the Indenture.
(n) The Company may require each Holder of Securities to be sold
pursuant to the Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of the Securities as
the Company may from time to time reasonably require for inclusion in the
Shelf Registration Statement, and the Company may exclude from such
registration the Securities of any Holder that unreasonably fails to
furnish such information within a reasonable time after receiving such
request.
(o) The Company shall enter into such customary agreements
(including, if requested, an underwriting agreement in customary form) and
take all such other action, if any, as any Holder of the Securities shall
reasonably request in order to facilitate the disposition of the Securities
pursuant to any Shelf Registration.
(p) In the case of any Shelf Registration, the Company shall (i) make
reasonably available for inspection by the Holders of the Securities, any
underwriter participating in any disposition pursuant to the Shelf
Registration Statement and any attorney, accountant or other agent retained
by the Holders of the Securities or any such underwriter all relevant
financial and other records, pertinent corporate documents and properties
of the Company and (ii) cause the Company's officers, directors, employees,
accountants and auditors to supply all relevant information reasonably
requested by the Holders of the Securities or any such underwriter,
attorney, accountant or agent in connection with the Shelf Registration
Statement, in each case, as shall be reasonably necessary to enable such
persons, to conduct a reasonable investigation within the meaning of
Section 11 of the Securities Act (collectively, "Company Information");
-------------------
provided, however, that if the Company determines that any requested
-------- -------
Company Information is confidential, such Company Information shall not be
disclosed unless the requesting party signs a confidentiality agreement in
customary form and otherwise reasonably satisfactory to the Company (it
being understood that such confidentiality agreement shall not include any
"standstill" or similar contractual restriction on the purchase, sale or
voting of securities of the Company unrelated to compliance with the anti-
fraud provisions of the federal securities laws); and provided, further,
-------- -------
that the Company shall not be obligated to disclose any Company Information
that it is not legally permitted to disclose by operation
11
of government regulation or similar requirement, including, without
limitation, by operation of national security classification; and provided,
--------
further, that the foregoing inspection and information gathering shall be
-------
coordinated on behalf of the Initial Purchasers by you and on behalf of the
other parties, by one counsel designated by and on behalf of such other
parties as described in Section 4 hereof.
(q) In the case of any Shelf Registration, the Company, if requested
by any Holder of Securities covered thereby, shall cause (i) its counsel to
deliver an opinion and updates thereof relating to the Securities in
customary form (which may include limitations and qualifications similar to
those set forth in the opinion given by counsel to the Company pursuant to
Section 6(d) of the Purchase Agreement) addressed to such Holders and the
managing underwriters, if any, thereof and dated, in the case of the
initial opinion, the effective date of such Shelf Registration Statement
(it being agreed that the matters to be covered by such opinion shall
include, without limitation, the due incorporation and good standing of the
Company and its subsidiaries; the qualification of the Company and its
subsidiaries to transact business as foreign corporations; the due
authorization, execution and delivery of the relevant agreement of the type
referred to in Section 3(o) hereof; the due authorization, execution,
authentication and issuance, and the validity and enforceability, of the
applicable Securities; the absence of material legal or governmental
proceedings involving the Company and its subsidiaries; the absence of
governmental approvals required to be obtained in connection with the Shelf
Registration Statement, the offering and sale of the applicable Securities,
or any agreement of the type referred to in Section 3(o) hereof; the
compliance as to form of such Shelf Registration Statement and any
documents incorporated by reference therein and of the Indenture with the
requirements of the Securities Act and the Trust Indenture Act,
respectively; and, as of the date of the opinion and as of the effective
date of the Shelf Registration Statement or most recent post-effective
amendment thereto, as the case may be, the absence from such Shelf
Registration Statement and the prospectus included therein, as then amended
or supplemented, and from any documents incorporated by reference therein
of an untrue statement of a material fact or the omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading (in the case of any such documents, in
the light of the circumstances existing at the time that such documents
were filed with the Commission under the Exchange Act)); (ii) its officers
to execute and deliver all customary documents and certificates and updates
thereof requested by any underwriters of the applicable Securities and
(iii) its independent public accountants and the independent public
accountants with respect to any other entity for which financial
information is provided in the Shelf Registration Statement to provide to
the selling Holders of the applicable Securities and any underwriter
therefor a comfort letter in customary form and covering matters of the
type customarily covered in comfort letters in connection with primary
underwritten offerings, subject to receipt of appropriate documentation as
contemplated, and only if permitted, by Statement of Auditing Standards No.
72.
12
(r) In the case of the Registered Exchange Offer, if requested by any
Initial Purchaser or any known Participating Broker-Dealer, the Company
shall cause (i) its counsel to deliver to such Initial Purchaser or such
Participating Broker-Dealer a signed opinion in the form set forth in
Section 6(d) and (e) of the Purchase Agreement with such changes as are
customary in connection with the preparation of a Registration Statement
and (ii) its independent public accountants and the independent public
accountants with respect to any other entity for which financial
information is provided in the Registration Statement to deliver to such
Initial Purchaser or such Participating Broker-Dealer a comfort letter, in
customary form, meeting the requirements as to the substance thereof as set
forth in Section 6(a) and (b) of the Purchase Agreement, with appropriate
date changes.
(s) If a Registered Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Initial Securities by Holders to the
Company (or to such other Person as directed by the Company) in exchange
for the Exchange Securities or the Private Exchange Securities, as the case
may be, the Company shall mark, or cause to be marked, on the Initial
Securities so exchanged that such Initial Securities are being canceled in
exchange for the Exchange Securities or the Private Exchange Securities, as
the case may be; in no event shall the Initial Securities be marked as paid
or otherwise satisfied.
(t) The Company will use its best efforts to (a) if the Initial
Securities have been rated prior to the initial sale of such Initial
Securities, confirm such ratings will apply to the Securities covered by a
Registration Statement, or (b) if the Initial Securities were not
previously rated, cause the Securities covered by a Registration Statement
to be rated with the appropriate rating agencies, if so requested by
Holders of a majority in aggregate principal amount of Securities covered
by such Registration Statement, or by the managing underwriters, if any.
(u) In the event that any broker-dealer registered under the Exchange
Act shall underwrite any Securities or participate as a member of an
underwriting syndicate or selling group or "assist in the distribution"
(within the meaning of the Conduct Rules (the "Rules") of the National
Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a
Holder of such Securities or as an underwriter, a placement or sales agent
or a broker or dealer in respect thereof, or otherwise, the Company will
assist such broker-dealer in complying with the requirements of such Rules,
including, without limitation, by (i) if such Rules, including Rule 2720,
shall so require, engaging a "qualified independent underwriter" (as
defined in Rule 2720) to participate in the preparation of the Registration
Statement relating to such Securities, to exercise usual standards of due
diligence in respect thereto and, if any portion of the offering
contemplated by such Registration Statement is an underwritten offering or
is made through a placement or sales agent, to recommend the yield of such
Securities, (ii) indemnifying any such qualified independent underwriter to
the extent of the
13
indemnification of underwriters provided in Section 5 hereof and (iii)
providing such information to such broker-dealer as may be required in
order for such broker-dealer to comply with the requirements of the Rules.
(v) The Company shall use its best efforts to take all other steps
necessary to effect the registration of the Securities covered by a
Registration Statement contemplated hereby.
4. Registration Expenses. (a) All expenses incident to the Company's
performance of and compliance with this Agreement, other than underwriting
discounts and commissions of selling Holders, if any, will be borne by the
Company, regardless of whether a Registration Statement is ever filed or becomes
effective, including without limitation;
(i) all registration and filing fees and expenses;
(ii) all fees and expenses of compliance with federal securities and
state "blue sky" or securities laws;
(iii) all expenses of printing (including printing certificates for
the Securities to be issued in the Registered Exchange Offer and the
Private Exchange and printing of prospectuses), messenger and delivery
services and telephone;
(iv) all fees and disbursements of counsel for the Company;
(v) all application and filing fees in connection with listing the
Exchange Securities on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and
(vi) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Company will bear its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees and expenses
of any person, including special experts, retained by the Company.
(b) In connection with any Registration Statement required by this
Agreement, the Company will reimburse the Initial Purchasers and the Holders of
Transfer Restricted Securities who are tendering Initial Securities in the
Registered Exchange Offer and/or selling or reselling Securities pursuant to the
"Plan of Distribution" contained in the Exchange Offer Registration Statement or
the Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Latham & Watkins, Los
Angeles unless another firm shall be chosen by the Holders of a
14
majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared.
5. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Holder of the Securities, any Participating Broker-Dealer and each
person, if any, who controls such Holder or such Participating Broker-Dealer
within the meaning of the Securities Act or the Exchange Act (each Holder, any
Participating Broker-Dealer and such controlling persons are referred to
collectively as the "Indemnified Parties") from and against any losses, claims,
damages or liabilities, joint or several, or any actions in respect thereof
(including, but not limited to, any losses, claims, damages, liabilities or
actions relating to purchases and sales of the Securities) to which each
Indemnified Party may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement or prospectus or in any
amendment or supplement thereto or in any preliminary prospectus relating to a
Shelf Registration, 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 shall reimburse, as
incurred, the Indemnified Parties for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action in respect thereof; provided, however, that
-------- -------
(i) the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration in reliance
upon and in conformity with written information pertaining to such Holder and
furnished to the Company by or on behalf of such Holder specifically for
inclusion therein and (ii) with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus relating
to a Shelf Registration Statement, the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Holder or Participating
Broker-Dealer from whom the person asserting any such losses, claims, damages or
liabilities purchased the Securities concerned, to the extent that a prospectus
relating to such Securities was required to be delivered by such Holder or
Participating Broker-Dealer under the Securities Act in connection with such
purchase and any such loss, claim, damage or liability of such Holder or
Participating Broker-Dealer results from the fact that there was not sent or
given to such person, at or prior to the written confirmation of the sale of
such Securities to such person, a copy of the final prospectus if the Company
had previously furnished copies thereof to such Holder or Participating Broker-
Dealer; provided further, however, that this indemnity agreement will be in
-------- ------- -------
addition to any liability which the Company may otherwise have to such
Indemnified Party. The Company shall also indemnify underwriters, their
officers and directors and each person who controls such underwriters within the
meaning of the Securities Act or the Exchange Act to the same extent as provided
above with respect to the indemnification of the Holders of the Securities if
requested by such Holders.
15
(b) Each Holder of the Securities, severally and not jointly, will
indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act from
and against any losses, claims, damages or liabilities or any actions in respect
thereof, to which the Company or any such controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, but in
each case only to the extent that the untrue statement or omission or alleged
untrue statement or omission was made in reliance upon and in conformity with
written information pertaining to such Holder and furnished to the Company by or
on behalf of such Holder specifically for inclusion therein; and, subject to the
limitation set forth immediately preceding this clause, shall reimburse, as
incurred, the Company for any legal or other expenses reasonably incurred by the
Company or any such controlling person in connection with investigating or
defending any loss, claim, damage, liability or action in respect thereof. This
indemnity agreement will be in addition to any liability which such Holder may
otherwise have to the Company or any of its controlling persons.
(c) Promptly after receipt by an indemnified party under this Section 5 of
notice of the commencement of any action or proceeding (including a governmental
investigation), such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 5, notify the
indemnifying party of the commencement thereof; but the omission so to notify
the indemnifying party will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (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 (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying 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 5 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. 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, and does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
16
(d) If the indemnification provided for in this Section 5 is unavailable
or insufficient to hold harmless an indemnified party under subsections (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 (or actions in respect thereof) referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the sale of the Securities, or (ii) if the
allocation provided by the foregoing clause (i) 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
indemnifying party or parties on the one hand and the indemnified party on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof) as well
as any other relevant equitable considerations. The relative fault of the
parties 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
on the one hand or such Holder or such other indemnified party, as the case may
be, on the other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such 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 any other
provision of this Section 5(d), the Holders of the Securities shall not be
required to contribute any amount in excess of the amount by which the net
proceeds received by such Holders from the sale of the Securities pursuant to a
Registration Statement exceeds the amount of damages which such Holders have
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d), each person,
if any, who controls such indemnified party within the meaning of the Securities
Act or the Exchange Act shall have the same rights to contribution as such
indemnified party and each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as the Company.
(e) The agreements contained in this Section 5 shall survive the sale of
the Securities pursuant to a Registration Statement and shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.
6. Additional Interest Under Certain Circumstances. (a) Additional
interest (the "Additional Interest") with respect to the Securities shall be
assessed as follows if any
17
of the following events occur (each such event in clauses (i) through (iv) below
being herein called a "Non-Registration Event"):
(i) any Registration Statement required by this Agreement is not filed
with the Commission on or prior to the applicable Filing Deadline;
(ii) any Registration Statement required by this Agreement is not declared
effective by the Commission on or prior to the applicable
Effectiveness Deadline;
(iii) the Registered Exchange Offer has not been consummated on or prior
to the Consummation Deadline; or
(iv) except as provided in Section 6(b) below, any Registration Statement
required by this Agreement has been declared effective by the
Commission but (A) such Registration Statement thereafter ceases to be
effective or (B) such Registration Statement or the related prospectus
ceases to be usable in connection with resales of Transfer Restricted
Securities during the periods specified herein because either (1) any
event occurs as a result of which the related prospectus forming part
of such Registration Statement would include any 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 (2) it shall be necessary to amend such
Registration Statement or supplement the related prospectus, to comply
with the Securities Act or the Exchange Act or the respective rules
thereunder.
Each of the foregoing will constitute a Non-Registration Event whatever the
reason for any such event and whether it is voluntary or involuntary or is
beyond the control of the Company or pursuant to operation of law or as a result
of any action or inaction by the Commission.
Additional Interest shall accrue on the Securities over and above the
interest set forth in the title of the Securities from and including the date on
which any such Non-Registration Event shall occur to but excluding the date on
which all such Non-Registration Events have been cured, at a rate of 0.25% per
annum (the "Additional Interest Rate") for the first 90-day period immediately
following the occurrence of such Non-Registration Event. The Additional
Interest Rate shall increase by an additional 0.25% per annum with respect to
each subsequent 90-day period until all Non-Registration Events have been cured,
up to a maximum Additional Interest Rate of 1.0% per annum.
(b) A Non-Registration Event referred to in Section 6(a)(iv) hereof shall
be deemed not to have occurred and be continuing in relation to a Shelf
Registration Statement or the related prospectus if (i) such Non-Registration
Event has occurred solely
18
as a result of (x) the filing of a post-effective amendment to such Shelf
Registration Statement to incorporate annual audited financial information with
respect to the Company where such post-effective amendment is not yet effective
and needs to be declared effective to permit Holders to use the related
prospectus or (y) other material events, with respect to the Company that would
need to be described in such Shelf Registration Statement or the related
prospectus and (ii) in the case of clause (y), the Company is proceeding
promptly and in good faith to amend or supplement such Shelf Registration
Statement and related prospectus to describe such events; provided, however,
-------- -------
that in any case if such Non-Registration Event occurs for a continuous period
in excess of 30 days, Additional Interest shall be payable in accordance with
the above paragraph from the day such Non-Registration Event occurs until such
Non-Registration Event is cured.
(c) Any amounts of Additional Interest due pursuant to Section 6(a) will
be payable in cash on the regular interest payment dates with respect to the
Securities. The amount of Additional Interest will be determined by multiplying
the applicable Additional Interest Rate by the principal amount of the
Securities and further multiplied by a fraction, the numerator of which is the
number of days such Additional Interest Rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months),
and the denominator of which is 360.
(d) "Transfer Restricted Securities" means each Security until (i) the
date on which such Security has been exchanged by a person other than a broker-
dealer for a freely transferable Exchange Security in the Registered Exchange
Offer, (ii) following the exchange by a broker-dealer in the Registered Exchange
Offer of an Initial Security for an Exchange Security, the date on which such
Exchange Security is sold to a purchaser who receives from such broker-dealer on
or prior to the date of such sale a copy of the prospectus contained in the
Exchange Offer Registration Statement, (iii) the date on which such Security has
been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement or (iv) the date on which such
Security is distributed to the public pursuant to Rule 144 under the Securities
Act or is saleable pursuant to Rule 144(k) under the Securities Act.
7. Rules 144 and 144A. The Company shall use its best efforts to file the
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and, if at any time the Company is not required to file such
reports, it will, upon the request of any Holder of Securities, make publicly
available other information so long as necessary to permit sales of their
securities pursuant to Rules 144 and 144A. The Company covenants that it will
take such further action as any Holder of Securities may reasonably request, all
to the extent required from time to time to enable such Holder to sell
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rules 144 and 144A (including the requirements of
Rule 144A(d)(4)). The Company will provide a copy of this Agreement to
prospective purchasers of Initial Securities identified to the Company by the
Initial Purchasers upon request. Upon the request of any Holder of Initial
Securities, the Company shall deliver
19
to such Holder a written statement as to whether it has complied with such
requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be
deemed to require the Company to register any of its securities pursuant to the
Exchange Act.
8. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering ("Managing Underwriters") will be selected by
the Holders of a majority in aggregate principal amount of such Transfer
Restricted Securities to be included in such offering.
No person may participate in any underwritten registration hereunder unless
such person (i) agrees to sell such person's Transfer Restricted Securities on
the basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
9. Miscellaneous.
(a) Remedies. The Company acknowledges and agrees that any failure by the
Company to comply with its obligations under Section 1 and 2 hereof may result
in material irreparable injury to the Initial Purchasers or the Holders for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchasers or any Holder may obtain such relief as may be
required to specifically enforce the Company's obligations under Sections 1 and
2 hereof. The Company further agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on or after the date
of this Agreement enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's securities under any
agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement with respect
to any series of Securities may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
except by the Company and the written consent of the Holders of a majority in
principal amount of the series of Securities affected by such amendment,
modification, supplement, waiver or consents.
20
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class mail,
facsimile transmission, or air courier which guarantees overnight delivery:
(1) If to a Holder of the Securities, at the most current address
given by such Holder to the Company.
(2) If to the Initial Purchasers:
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, NY 10010-3629
Fax No.: (212) 325-8278
Attention: Transactions Advisory Group
and
Chase Securities Inc.
270 Park Avenue, 8th Floor
New York, NY 10017
Fax No.: (212) 834-6081
Attention: Debt Syndicate Desk
with a copy to:
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071-2007
Fax No.: (213) 891-8763
Attention: Cynthia A. Rotell, Esq.
(3) If to the Company, at its address as follows:
Northrop Grumman Corporation
1840 Century Park East
Los Angeles, California 90067
Telecopier No.: (310) 556-4556
Attention: General Counsel
21
with a copy to:
Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street, 48th Floor
Los Angeles, California 90071
Telecopier No.: (213) 620-1398
Attention: John D. Hussey
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.
(e) Third Party Beneficiaries. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent they may deem such enforcement
necessary or advisable to protect their rights or the rights of Holders
hereunder.
(f) Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
(j) Severability. If any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
(k) Securities Held by the Company. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Securities is required
hereunder, Securities held by the Company or its Affiliates (other than
subsequent Holders of Securities if such subsequent Holders are deemed to be
Affiliates solely by reason of their
22
holdings of such Securities) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
(l) Agent for Service; Submission to Jurisdiction; Waiver of Immunities.
By the execution and delivery of this Agreement, the Company (i) acknowledges
that it has, by separate written instrument, irrevocably designated and
appointed CT Corporation System (and any successor entity), as its authorized
agent upon which process may be served in any suit or proceeding arising out of
or relating to this Agreement that may be instituted in any federal or state
court in the State of New York or brought under federal or state securities
laws, and acknowledges that CT Corporation System has accepted such designation,
(ii) submits to the nonexclusive jurisdiction of any such court in any such suit
or proceeding, and (iii) agrees that service of process upon CT Corporation
System and written notice of said service to the Company shall be deemed in
every respect effective service of process upon it in any such suit or
proceeding. The Company further agrees to take any and all action, including
the execution and filing of any and all such documents and instruments, as may
be necessary to continue such designation and appointment of CT Corporation
System in full force and effect so long as any of the Securities shall be
outstanding. To the extent that the Company may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, it hereby irrevocably
waives such immunity in respect of this Agreement, to the fullest extent
permitted by law.
(m) No Interpretation Against Drafter. This Agreement is the product of
negotiations between the parties hereto represented by counsel and such parties
agree that no rule of construction relating to interpretation against the
drafter of an agreement shall apply to this Agreement.
(Signature Page Follows)
23
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the several Initial Purchasers and the Company in accordance with its terms.
Very truly yours,
Northrop Grumman Corporation
by
__________________________________________
Name: Albert F. Myers
Title: Corporate Vice President and
Treasurer
The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.
Credit Suisse First Boston Corporation
Chase Securities Inc.
Acting on behalf of themselves
and as the representatives of
the several Initial Purchasers
By: Credit Suisse First Boston Corporation
by
____________________________________
Name: Scott E. Zoellner
Title: Director
S-1
ANNEX A
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Securities received in exchange for
Initial Securities where such Initial Securities were acquired by such broker-
dealer as a result of market-making activities or other trading activities. The
Company has agreed that, for a period of 180 days after the Expiration Date (as
defined herein), it will make this Prospectus available to any broker-dealer for
use in connection with any such resale. See "Plan of Distribution."
ANNEX B
Each broker-dealer that receives Exchange Securities for its own account in
exchange for Initial Securities, where such Initial Securities were acquired by
such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution."
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Initial Securities where such Initial Securities were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 180 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until _______________,
2001, all dealers effecting transactions in the Exchange Securities may be
required to deliver a prospectus./(1)/
The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers
for their own account pursuant to the Exchange Offer may be sold from time to
time in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Exchange
Securities. Any broker-dealer that resells Exchange Securities that were
received by it for its own account pursuant to the Exchange Offer and any broker
or dealer that participates in a distribution of such Exchange Securities may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of Exchange Securities and any commission or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that,
by acknowledging that it will deliver and by delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
- --------------------
/(1)/ In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Exchange Offer prospectus.
For a period of 180 days after the Expiration Date the Company will promptly
send additional copies of this Prospectus and any amendment or supplement to
this Prospectus to any broker-dealer that requests such documents in the Letter
of Transmittal. The Company has agreed to pay all expenses incident to the
Exchange Offer (including the expenses of one counsel for the Holders of the
Securities) other than commissions or concessions of any brokers or dealers and
will indemnify the Holders of the Securities (including any broker-dealers)
against certain liabilities, including liabilities under the Securities Act.
ANNEX D
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name: __________________________________________
Address:________________________________________
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Initial Securities that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
SCHEDULE I
Credit Suisse First Boston Corporation
Chase Securities Inc.
Deutsche Banc Alex. Brown Inc.
Salomon Smith Barney Inc.
Scotia Capital (USA) Inc.
Mizuho International plc
The Royal Bank of Scotland plc
SG Cowen Securities Corporation
EXHIBIT 5.1
Sheppard, Mullin, Richter & Hampton LLP
May 21, 2001
Northrop Grumman Corporation
Northrop Grumman Systems Corporation
Litton Industries, Inc.
c/o Northrop Grumman Corporation
1840 Century Park East
Los Angeles, California 90067
Ladies and Gentlemen:
We have acted as special counsel to Northrop Grumman Systems Corporation, a
Delaware corporation, formerly Northrop Grumman Corporation ("Northrop
Systems"), Northrop Grumman Corporation, a Delaware corporation, formerly NNG,
Inc. ("Northrop Grumman") and Litton Industries, Inc., a Delaware corporation
("Litton"), in connection with a registration statement (the "Registration
Statement") on Form S-4 filed by Northrop Systems, Northrop Grumman and Litton
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Act"). The Registration Statement relates to an offer (the
"Exchange Offer") by Northrop Systems to exchange up to $750,000,000 aggregate
principal amount of its 7 1/8% Exchange Notes due 2011 and up to $750,000,000
aggregate principal amount of its 7 3/4% Exchange Debentures due 2031
(collectively, the "Exchange Securities") for its currently outstanding 7 1/8%
Notes due 2011 and 7 3/4% Debentures due 2031, respectively (collectively, the
"Outstanding Securities"), of the same respective aggregate principal amounts.
The Outstanding Securities were, and the Exchange Securities will be, issued
pursuant to the provisions of an Indenture (the "Indenture") dated as of October
15, 1994 between Northrop Systems and The Chase Manhattan Bank, as trustee (the
"Trustee"), as supplemented by an Officers' Certificate (the "Officers'
Certificate") dated as of February 22, 2001 which was delivered pursuant to said
Indenture and established the terms of the Outstanding Securities and Exchange
Securities (referred to in such Officers' Certificate as the "Series A Notes and
Series A Debentures" and the "Series B Notes and Series B Debentures,"
respectively). The Outstanding Securities were, and the Exchange Securities will
be, unconditionally guaranteed by Northrop Grumman and Litton pursuant to
guarantees dated as of April 3, 2001 which have been executed and
Northrop Grumman Corporation
Northrop Grumman Systems Corporation
Litton Industries, Inc.
May 21, 2001
Page 2
delivered by Northrop Grumman and Litton, respectively (each a "Guarantee" and
collectively, the "Guarantees").
In rendering the opinion expressed below, we have examined the following
agreements, instruments and other documents:
(a) the Registration Statement;
(b) the Indenture;
(c) the Officers' Certificate;
(d) the forms of the Exchange Securities to be issued pursuant to the
Indenture;
(e) the Guarantees; and
(f) such corporate records, certificates of public officials, officers'
certificates and other documents as we have deemed necessary as a basis for the
opinions expressed below.
In rendering the opinion set forth below, we have assumed:
A. The genuineness of all signatures, the authenticity and completeness of
all documents submitted to us as originals, the conformity to the originals of
all documents submitted to us as copies, and that the documents submitted to us
have not been amended or modified since the date submitted by written or oral
agreement of the parties, by the conduct of the parties or otherwise.
B. The due authorization, execution and delivery of the Indenture and the
documents and instruments referred to therein by and on behalf of all parties
thereto other than Northrop Systems, Northrop Grumman and Litton.
C. That the Indenture is the legal, valid and binding obligation of the
Trustee and that the Trustee has all requisite power and authority and has taken
any and all action necessary to be taken by the Trustee to execute and deliver
the Indenture and perform the Trustee's obligations thereunder.
On the basis of the foregoing and subject to the qualifications and
limitations set forth below, it is our opinion that:
Northrop Grumman Corporation
Northrop Grumman Systems Corporation
Litton Industries, Inc.
May 21, 2001
Page 3
1. The Exchange Securities, when issued and delivered in exchange for the
Outstanding Securities in the manner described in the Registration Statement,
and when executed and authenticated as specified in the Indenture, will be duly
issued and delivered and will constitute valid and binding obligations of
Northrop Systems enforceable in accordance with their terms, subject to
applicable bankruptcy, reorganization, insolvency, liquidation, readjustment of
debt, moratorium, fraudulent transfer or other 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).
2. Each Guarantee constitutes the legal, valid and binding obligation of
each of Northrop Grumman and Litton, as the case may be, enforceable against
Northrop Grumman or Litton, as the case may be, in accordance with its terms,
subject to applicable bankruptcy, reorganization, insolvency, liquidation,
readjustment of debt, moratorium, fraudulent transfer or other 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).
Our opinion above, insofar as it relates to enforceability of the Exchange
Securities and the Guarantees, which are by their terms governed by New York
law, is given solely in reliance on the opinion of Kaye Scholer LLP, dated as of
the date hereof, a copy of which is attached hereto, and such opinion of ours is
subject to the same assumptions, exceptions and limitations as those set forth
in the opinion of Kaye Scholer LLP.
We are members of the Bar of the State of California. The opinion contained
herein is based upon an examination of the laws of the State of California, the
General Corporation Law of the State of Delaware and the Federal laws of the
United States in effect on the date hereof and no opinion is expressed as to the
application of the laws of any other jurisdiction except the opinion with
respect to the laws of the State of New York in reliance upon the opinion of
Kaye Scholer LLP, as described above.
Northrop Grumman Corporation
Northrop Grumman Systems Corporation
Litton Industries, Inc.
May 21, 2001
Page 4
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and we further consent to the use of our name under the
caption "Legal Matters" in the Prospectus forming a part of such Registration
Statement. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other person
or entity for any purpose.
Very truly yours,
/s/ SHEPPARD, MULLIN, RICHTER
& HAMPTON LLP
KAYE SCHOLER LLP
May 21, 2001
Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street
Los Angeles, California 90071-1448
Ladies and Gentlemen:
This opinion letter is furnished to you for the purposes of your issuing
your opinion in connection with a registration statement (the "Registration
Statement") on Form S-4 filed with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Act"), relating to the exchange
offer (the "Exchange Offer") by Northrop Grumman Systems Corporation (formerly,
Northrop Grumman Corporation), a Delaware corporation ("Northrop Systems"), of
up to $750,000,000 aggregate principal amount of Northrop Systems' 7-1/8%
Exchange Notes Due 2011 and up to $750,000,000 aggregate principal amount of its
7-3/4% Exchange Debentures Due 2031 (collectively, the "Exchange Securities")
for Northrop Systems' currently outstanding 7-1/8% Notes Due 2011 and 7-3/4%
Debentures Due 2031, respectively (collectively, the "Outstanding Securities"),
of the same respective aggregate principal amounts. The Outstanding Securities
were, and the Exchange Securities will be, issued under an Indenture dated as of
October 15, 1994, between Northrop Systems and The Chase Manhattan Bank
(formerly, The Chase Manhattan Bank, National Association), as trustee (the
"Indenture"), as supplemented by an Officers' Certificate (the "Officers'
Certificate") dated as of February 22, 2001 which was delivered pursuant to said
Indenture, establishing the terms of the Outstanding Securities and the Exchange
Securities (referred to in the Officers' Certificate and the Guarantees
hereinafter referred to as the "Series A Notes" and "Series A Debentures" and
the "Series B Notes" and "Series B Debentures", respectively). The Outstanding
Securities were, and the Exchange Securities will be, guaranteed by Northrop
Grumman Corporation, formerly NNG, Inc. ("Northrop Grumman") and Litton
Industries, Inc. ("Litton") pursuant to guarantees dated as of April 3, 2001
(the "Guarantees").
In connection herewith, we have examined:
1. the Registration Statement;
2. the Indenture;
3. The Guarantees;
4. the Officers' Certificate (together with the Exchange Securities, the
Guarantees and the Indenture, the "Documents"); and
5
5. the forms of the Exchange Securities to be issued pursuant to the
Indenture.
We have examined the originals, or copies certified to our satisfaction, of
such other agreements, instruments and documents, and have made such other
investigation, as we have deemed necessary as a basis for the opinion expressed
below. We have assumed that (a) each of Northrop Systems, Northrop Grumman and
Litton, as the case may be, (i) is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated and (ii)
has the corporate power and authority to enter into and perform the Documents to
which it is a party, (b) the Documents have been and will be duly authorized,
executed and delivered by Northrop Systems, Northrop Grumman and Litton, as the
case may be, (c) the Documents do not and will not conflict with or violate (i)
the charter documents or board resolutions of Northrop Systems, Northrop Grumman
or Litton, as the case may be, (ii) any contract or court order to which
Northrop Systems, Northrop Grumman or Litton, as the case may be, is a party or
by which it is bound or (iii) the laws or regulations of any jurisdiction (other
than the State of New York), (d) on or prior to the date of issuance of the
Exchange Securities, (1) all parties shall have performed all of their
obligations under the Documents to be performed on or before that date and (ii)
all warranties and representations as to factual matters of Northrop Systems
under the Officers' Certificate are true, and (e) Northrop Systems does not
exercise its rights under the Registration Statement to amend the terms of the
Exchange Offer. We have further assumed the due execution and delivery, pursuant
to due authorization, of the Documents and the documents and instruments
referred to therein by each of the parties thereto other than Northrop Systems,
Northrop Grumman and Litton, as the case may be.
Based upon the foregoing and subject to the limitations set forth below, we
are of the opinion that:
1. The Exchange Securities, when issued and delivered in exchange for the
Outstanding Securities in the manner described in the Registration Statement,
and when executed and authenticated as specified in the Indenture, will be the
legal, valid and binding obligations of Northrop Systems enforceable against
Northrop Systems in accordance with their respective terms, subject to (a)
applicable bankruptcy, reorganization, insolvency, liquidation, readjustment of
debt, moratorium, fraudulent transfer or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles of equity
(whether considered in a proceeding in equity or at law).
2. Each Guarantee constitutes the legal, valid and binding obligation of
each of Northrop Grumman or Litton, as the case may be, enforceable against
Northrop Grumman or Litton, as the case may be, in accordance with its terms,
subject to (a) applicable bankruptcy, reorganization, insolvency, liquidation,
readjustment of debt, moratorium, fraudulent transfer or other similar laws
affecting the enforcement
6
of creditors' rights generally and (b) general principles of equity (whether
considered in a proceeding in equity or at law).
Our opinions set forth above are subject to the following exceptions and
qualifications:
(a) Provisions in the Indenture and the Guarantees which require that any
waiver be in writing to be effective may not be enforceable.
(b) The enforceability of Section 110 of the Indenture may be limited to
circumstances in which the unenforceable portion of the Indenture is not an
essential part thereof.
(c) We express no opinion as to the provisions of Section 3 (b) of each of
the Guarantees purporting to waive the right to trial by jury of Northrop
Grumman or Litton, as the case may be.
Our opinions herein are limited to the laws of the State of New York. This
opinion letter is being delivered to you pursuant to the Exchange Offer and may
not be used or relied upon by any person or entity other than you and the
parties to the Exchange Offer or in any other connection. We hereby consent to
the filing of this opinion as an exhibit to the Registration Statement, and we
further consent to the use of our name under the caption "Legal Matters" in the
Prospectus forming a part of such Registration Statement. Except as stated
above, without our prior written consent, this opinion may not be furnished or
quoted to, or relied upon by, any other person or entity for any purpose.
Very truly yours,
/s/ KAYE SCHOLER LLP
7
EXHIBIT 12.1
RATIO OF EARNINGS TO FIXED CHARGES
Pro Forma Actual
------------------------------ -------------------------------------------------------
Quarter ended Year ended
Mar. 31, 2001 Dec. 31, 2000 2001 2000 2000 1999 1998 1997 1996
------------- ------------- ---- ---- ---- ---- ---- ---- ----
($ in Millions)
Income from contining operations
before income taxes and accounting
change: $ 173 $ 1,079 $ 160 $ 243 $ 975 $ 747 $ 309 $ 512 $ 478
------------ ------------- ----- ----- ----- ------ ----- ----- -----
Plus Fixed Charges:
Interest on all Indebtedness. 120 470 47 46 175 224 232 257 270
Amortization of debt expense: 6 24 3 3 13 13 14 15 24
Portion of rental expenses on 15 61 10 8 41 32 32 33 25
operating leases deemed to be
representative of the interest
factor:
Preferred stock dividend
requirements of consolidated
subsidiaries: 9* 38* - - - - - - -
------------ ------------- ----- ----- ---- ------ ---- ----- -----
Total Fixed Charges: 150 593 60 57 229 269 278 305 319
------------ ------------- ----- ----- ---- ------ ---- ----- -----
Less Preferred stock dividend: (9) (38) - - - - - - -
Earnings: $ 314 $1,634 $ 220 $ 300 $1,204 $1,016 $ 587 $ 817 $ 797
------------ ------------- ----- ----- ---- ------ ---- ----- -----
Fixed Charges Ratio: 2.09 2.76 3.67 5.26 5.26 3.78 2.11 2.68 2.50
------------ ------------- ----- ----- ------ ------ ----- ----- ------
_______________________________
* Required preferred stock dividend divided by 1 minus the statutory tax rate of
35%.
See instructions to Item 503(d) of Regulation S-K.
The ratios of earnings to fixed charges should be read in conjunction with the
financial statements and other financial data included or incorporated by
reference in this registration statement.
1
EXHIBIT 15.1
Letter from Independent Accountants Regarding Unaudited Interim Financial
Information
Northrop Grumman Corporation
Los Angeles, California
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of Northrop Grumman Corporation and subsidiaries for the period
ended March 31, 2001 and Northrop Systems (formerly Northrop Grumman
Corporation) and subsidiaries for the period ended March 31, 2000, as indicated
in our report dated May 10, 2001; because we did not perform an audit, we
expressed no opinion on that information.
We are aware that our report referred to above, which was included in Northrop
Grumman Corporation's Quarterly Report on Form 10-Q for the quarter ended March
31, 2001, is being incorporated by reference in this Registration Statement.
We also are aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
Deloitte & Touche LLP
Los Angeles, California
May 22, 2001
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Northrop Grumman Systems Corporation, formerly Northrop Grumman Corporation
("Northrop Systems"), Northrop Grumman Corporation, formerly NNG, Inc., and
Litton Industries, Inc. on Form S-4 of our report dated January 24, 2001, except
for the subsequent events footnote, as to which the date is March 1, 2001,
appearing in the Annual Report on Form 10K/A of Northrop Systems for the year
ended December 31, 2000 and to the reference to us under the heading "Experts"
in the Prospectus, which is part of this Registration Statement.
Deloitte & Touche LLP
Los Angeles, California
May 22, 2001
1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Northrop Grumman Systems Corporation, formerly Northrop Grumman Corporation,
Northrop Grumman Corporation, formerly NNG, Inc., and Litton Industries, Inc. on
Form S-4 of our report dated October 10, 2000, appearing in the Annual Report on
Form 10-K of Litton Industries, Inc. for the year ended July 31, 2000 and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.
Deloitte & Touche LLP
Los Angeles, California
May 23, 2001
EXHIBIT 24.1
POWER OF ATTORNEY
FILING OF REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors and officers
of Northrop Grumman Systems Corporation, a Delaware corporation, formerly
Northrop Grumman Corporation ("Northrop Systems"), and Northrop Grumman
Corporation, a Delaware corporation, formerly NNG, Inc. ("Northrop Grumman", and
together with Northrop Systems, the "Registrants") hereby nominate and appoint
W. BURKS TERRY and JOHN H. MULLAN, and each of them acting or signing singly,
his or her agents and attorneys-in-fact, in his or her name to execute and/or
file (1) a registration statement on Form S-4 under the Securities Act of 1933,
as amended, (the "Act"), in connection with the registration, offer and sale or
exchange under the Act of $750,000,000 aggregate principal amount of Northrop
Systems' 7 1/8% Exchange Notes due 2011 and $750,000,000 aggregate principal
amount of Northrop Systems' 7 3/4% Exchange Debentures due 2031 in exchange for
Northrop Systems' outstanding 7 1/8% Notes due 2011 and 7 3/4% Debentures due
2031, respectively, and the guarantee thereof by Northrop Grumman; and (2) any
one or more amendments to any part of the foregoing registration statement,
including any post-effective amendments or appendices or supplements that may be
required to be filed under the Act to keep such registration statement effective
or to terminate its effectiveness.
Further, the undersigned does hereby authorize and direct the said agents
and attorneys-in-fact to take any and all acts and execute and file any and all
documents with the Securities and Exchange Commission ("SEC"), or state
regulatory agencies, necessary, proper or convenient in their opinion to comply
with the Act and the rules and regulations or orders of the SEC, or state
regulatory agencies, adopted or issued pursuant thereto, including the making of
any requests for acceleration of the effective date of said registration
statement, to the end that the registration statement of the Corporation shall
become effective under the Act and any other applicable law.
Finally, the undersigned do hereby ratify, confirm and approve each and
every act and document which the said appointed agents and attorneys-in-fact may
take, execute or file pursuant thereto with the same force and effect as though
such action had been taken or such documents had been executed or filed by the
undersigned respectively.
This Power of Attorney shall remain in full force and effect until revoked
or superseded by written notice filed with the SEC.
[Signature page follows]
1
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney on May 8, 2001.
/s/ Kent Kresa Chairman of the Board, President and Chief
- ------------------------------------ Executive Officer and Director (Principal Executive
Kent Kresa Officer)
/s/ Richard B. Waugh, Jr. Corporate Vice President and Chief Financial
- ------------------------------------ Officer (Principal Financial Officer)
Richard B. Waugh, Jr.
/s/ Robert B. Spiker Corporate Vice President and Controller (Principal
- ------------------------------------ Accounting Officer)
Robert B. Spiker
/s/ Jack R. Borsting Director
- ------------------------------------
Jack R. Borsting
/s/ John T. Chain, Jr. Director
- ------------------------------------
John T. Chain, Jr.
/s/ Lewis W. Coleman Director
- ------------------------------------
Lewis W. Coleman
/s/ Vic Fazio Director
- ------------------------------------
Vic Fazio
/s/ Phillip Frost Director
- ------------------------------------
Phillip Frost
/s/ Charles R. Larson Director
- ------------------------------------
Charles R. Larson
/s/ Robert A. Lutz Director
- ------------------------------------
Robert A. Lutz
/s/ Aulana L. Peters Director
- ------------------------------------
Aulana L. Peters
/s/ John E. Robson Director
- ------------------------------------
John E. Robson
/s/ Richard M. Rosenberg Director
- ------------------------------------
Richard M. Rosenberg
/s/ John Brooks Slaughter Director
- ------------------------------------
John Brooks Slaughter
Director
- ------------------------------------
Richard J. Stegemeier
/s/ Ronald D. Sugar Director
- ------------------------------------
Ronald D. Sugar
2
EXHIBIT 24.2
POWER OF ATTORNEY
FILING OF REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors and officers
of Litton Industries, Inc., a Delaware corporation ("Litton"), hereby nominate
and appoint W. BURKS TERRY and JOHN H. MULLAN, and each of them acting or
signing singly, his or her agents and attorneys-in-fact, in his or her name to
execute and/or file (1) a registration statement on Form S-4 under the
Securities Act of 1933, as amended, (the "Act"), in connection with the
registration, offer and sale under the Act of the guarantee by Litton of
$750,000,000 aggregate principal amount of Northrop Grumman Systems
Corporation's ("Northrop Systems") 7 1/8% Exchange Notes due 2011 and
$750,000,000 aggregate principal amount of Northrop Systems' 7 3/4% Exchange
Debentures due 2031, which will be issued in exchange for Northrop Systems'
outstanding 7 1/8% Notes due 2011 and 7 3/4% Debentures due 2031, respectively;
and (2) any one or more amendments to any part of the foregoing registration
statement, including any post-effective amendments or appendices or supplements
that may be required to be filed under the Act to keep such registration
statement effective or to terminate its effectiveness.
Further, the undersigned does hereby authorize and direct the said agents
and attorneys-in-fact to take any and all acts and execute and file any and all
documents with the Securities and Exchange Commission ("SEC"), or state
regulatory agencies, necessary, proper or convenient in their opinion to comply
with the Act and the rules and regulations or orders of the SEC, or state
regulatory agencies, adopted or issued pursuant thereto, including the making of
any requests for acceleration of the effective date of said registration
statement, to the end that the registration statement of the Corporation shall
become effective under the Act and any other applicable law.
Finally, the undersigned do hereby ratify, confirm and approve each and
every act and document which the said appointed agents and attorneys-in-fact may
take, execute or file pursuant thereto with the same force and effect as though
such action had been taken or such documents had been executed or filed by the
undersigned respectively.
This Power of Attorney shall remain in full force and effect until revoked
or superseded by written notice filed with the SEC.
[Signature page follows]
1
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney on
May 8, 2001.
/s/ Ronald D. Sugar President and Chief Executive Officer
- ------------------------------------ (Principal Executive Officer)
Ronald D. Sugar
/s/ D. Michael Steuert Senior Vice President and Chief Financial Officer
- ------------------------------------ (Principal Financial Officer)
D. Michael Steuert
/s/ Sandra J. Wright Vice President and Controller
- ------------------------------------ (Principal Accounting Officer)
Sandra J. Wright
/s/ Alton J. Brann Director
- ------------------------------------
Alton J. Brann
/s/ Joseph T. Casey Director
- ------------------------------------
Joseph T. Casey
/s/ J. Michael Hately Director
- ------------------------------------
J. Michael Hately
/s/ John M. Leonis Director
- ------------------------------------
John M. Leonis
/s/ John H. Mullan Director
- ------------------------------------
John H. Mullan
/s/ Albert F. Myers Director
- ------------------------------------
Albert F. Myers
/s/ Robert B. Spiker Director
- ------------------------------------
Robert B. Spiker
/s/ W. Burks Terry Director
- ------------------------------------
W. Burks Terry
2
EXHIBIT 25.1
___________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
Northrop Grumman Systems Corporation (formerly Northrop Grumman Corporation)
Northrop Grumman Corporation (formerly NNG, Inc.)
Litton Industries, Inc.
(Exact name of obligors as specified in its charter)
Delaware 95-1055798
Delaware 95-4840775
Delaware 95-1775499
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification Nos.)
1840 Century Park East
Los Angeles, CA 90067
(Address of principal executive offices) (Zip Code)
_____________________________________________
Debt Securities and Guarantee of Debt Securities
(Title of the indenture securities)
_____________________________________________
1
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, NY.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
2
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September
9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which
is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of April, 2001.
THE CHASE MANHATTAN BANK
By /s/ James P. Freeman
---------------------------
James P. Freeman
Vice President
3
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 2000, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Millions
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin................................ $ 22,648
Interest-bearing balances........................ 6,608
Securities:
Held to maturity securities........................ 556
Available for sale securities...................... 66,556
Federal funds sold and securities purchased under
agreements to resell............................. 35,508
Loans and lease financing receivables:
Loans and leases, net of unearned income......... $158,034
Less: Allowance for loan and lease losses........ 2,399
Less: Allocated transfer risk reserve............ 0
--------
Loans and leases, net of unearned income,
allowance, and reserve........................... 155,635
Trading Assets..................................... 59,802
Premises and fixed assets (including capitalized
leases).......................................... 4,398
Other real estate owned............................ 20
Investments in unconsolidated subsidiaries and
associated companies............................. 338
Customers' liability to this bank on acceptances
outstanding...................................... 367
Intangible assets.................................. 4,794
Other assets....................................... 19,886
--------
TOTAL ASSETS....................................... $377,116
========
4
LIABILITIES
Deposits
In domestic offices..................................... $132,165
Noninterest-bearing .................................... $ 54,608
Interest-bearing ....................................... 77,557
In foreign offices, Edge and Agreement
subsidiaries and IBF's.................................. 106,670
Noninterest-bearing ...................................... $ 6,059
Interest-bearing........................................ 100,611
Federal funds purchased and securities sold under
agreements to repurchase................................. 45,967
Demand notes issued to the U.S. Treasury.................. 500
Trading liabilities....................................... 41,384
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less........... 6,722
With a remaining maturity of more than one year
through three years................................... 0
With a remaining maturity of more than three years...... 276
Bank's liability on acceptances executed and outstanding.. 367
Subordinated notes and debentures......................... 6,349
Other liabilities......................................... 14,515
TOTAL LIABILITIES......................................... 354,915
EQUITY CAPITAL
Perpetual preferred stock and related surplus............. 0
Common stock.............................................. 1,211
Surplus (exclude all surplus related to preferred stock). 12,614
Undivided profits and capital reserves.................... 8,658
Net unrealized holding gains (losses)
on available-for-sale securities ......................... (298)
Accumulated net gains (losses) on cash flow hedges........ 0
Cumulative foreign currency translation adjustments....... 16
TOTAL EQUITY CAPITAL...................................... 22,201
--------
TOTAL LIABILITIES AND EQUITY CAPITAL....................... $377,116
========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named
bank, do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued
by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
DOUGLAS A. WARNER III )
WILLIAM B. HARRISON JR. )DIRECTORS
ELLEN V. FUTTER )
5
EXHIBIT 99.1
LETTER OF TRANSMITTAL
NORTHROP GRUMMAN SYSTEMS CORPORATION
(formerly Northrop Grumman Corporation)
OFFER TO EXCHANGE ITS
7 1/8% EXCHANGE NOTES DUE 2011 FOR ITS OUTSTANDING 7 1/8% NOTES DUE 2011
7 3/4% EXCHANGE DEBENTURES DUE 2031 FOR ITS OUTSTANDING 7 3/4%
DEBENTURES DUE 2031
THE EXCHANGE NOTES AND EXCHANGE DEBENTURES TO BE UNCONDITIONALLY GUARANTEED BY
NORTHROP GRUMMAN CORPORATION (formerly NNG, Inc.) AND LITTON INDUSTRIES, INC.
PURSUANT TO THE PROSPECTUS DATED _____________, 2001
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON ____________, 2001, UNLESS THE OFFER IS EXTENDED. TENDERS MAY BE
WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE CHASE MANHATTAN BANK
By Mail:
-------
P.O. Box 2320
Dallas, TX 75221-2320
Attn: Events
By Hand Delivery or Overnight Courier:
-------------------------------------
2001 Bryan Street, 9th Floor
Dallas, TX 75201
Attn: Events
By Facsimile Transmission:
-------------------------
(214) 468-6494
For Information or Confirmation by Telephone:
--------------------------------------------
(800) 275-2048
___________________
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
PLEASE READ THE INSTRUCTIONS CONTAINED HEREIN CAREFULLY BEFORE COMPLETING
THIS LETTER OF TRANSMITTAL.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
1
This Letter of Transmittal is to be completed if either (a)
certificates are to be forwarded herewith or (b) tenders are to be made pursuant
to the procedures for tender by book-entry transfer set forth under "The
Exchange Offer -- Procedures for Tendering" and "-- Book-Entry Transfer" in the
Prospectus and an Agent's Message (as defined below) is not delivered.
Certificates, or book-entry confirmation of a book-entry transfer of Outstanding
Securities into the Exchange Agent's account at The Depository Trust Company
("DTC"), as well as this Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, and any
other documents required by this Letter of Transmittal, must be received by the
Exchange Agent at its address set forth herein on or prior to the Expiration
Date. Tenders by book-entry transfer may also be made by delivering an Agent's
Message in lieu of this Letter of Transmittal.
The term "book-entry confirmation" means a confirmation of a book-
entry transfer of Outstanding Securities into the Exchange Agent's account at
DTC. The term "Agent's Message" means a message, transmitted by DTC to and
received by the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgment from the tendering
participant, which acknowledgment states that such participant has received and
agrees to be bound by this Letter of Transmittal and that Northrop Grumman
Systems Corporation may enforce this Letter of Transmittal against such
participant.
Holders (as defined below) of Outstanding Securities whose
certificates (the "Certificates") for such Outstanding Securities are not
immediately available or who cannot deliver their Certificates and all other
required documents to the Exchange Agent on or prior to the Expiration Date or
who cannot complete the procedures for book-entry transfer on a timely basis,
must tender their Outstanding Securities according to the guaranteed delivery
procedures set forth in "The Exchange Offer -- Guaranteed Delivery Procedures
for Securities" in the Prospectus.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
2
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
DESCRIPTION OF OUTSTANDING SECURITIES
- -------------------------------------------------------------------------------------------------------
IF BLANK, PLEASE PRINT NAME AND OUTSTANDING SECURITIES (ATTACH ADDITIONAL LIST IF NECESSARY.
ADDRESS OF REGISTERED SEE INSTRUCTION 3)
HOLDER(S)
- -------------------------------------------------------------------------------------------------------
CERTIFICATE AGGREGATE PRINCIPAL AMOUNT
NUMBER(S)* PRINCIPAL AMOUNT TENDERED (IF LESS
THAN ALL)**
--------------------------------------------------------------
7 1/8% NOTES DUE 2011
--------------------------------------------------------------
--------------------------------------------------------------
7 3/4 DEBENTURES DUE 2031
--------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
* Need not be completed by book-entry holders.
** Outstanding Securities may be tendered in whole or in part in multiples of $1,000. All
Outstanding Securities held shall be deemed tendered unless a lesser number is specified in this
column. See Instruction 4.
- -------------------------------------------------------------------------------------------------------
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED OUTSTANDING SECURITIES ARE BEING DELIVERED BY BOOK-
ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH
DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
______________________________________________________________________
DTC Account Number
______________________________________________________________________
Transaction Code Number
______________________________________________________________________
3
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OUTSTANDING SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING (SEE INSTRUCTION 1):
Name(s) of Registered Holder(s)
Window Ticket Number (if any)
Date of Execution of Notice of Guaranteed Delivery
Name of Institution which Guaranteed Delivery
If Guaranteed Delivery is to be made by Book-Entry Transfer:
Name of Tendering Institution
DTC Account Number
Transaction Code Number
[ ] CHECK HERE IF OUTSTANDING SECURITIES TENDERED BY BOOK-ENTRY
TRANSFER AND NOT ACCEPTED FOR EXCHANGE ARE TO BE RETURNED BY CREDITING THE
DTC ACCOUNT NUMBER SET FORTH ABOVE.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE
OUTSTANDING SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR
OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO
RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
________________________________________________________________________________
Address:
________________________________________________________________________________
4
Ladies and Gentlemen:
The undersigned hereby tenders to Northrop Grumman Systems Corporation, a
Delaware corporation, formerly Northrop Grumman Corporation ("Northrop
Systems"), acting on its behalf and on behalf of Northrop Grumman Corporation, a
Delaware corporation, formerly NNG, Inc., and Litton Industries, Inc., a
Delaware corporation, the above described principal amount of Northrop Systems'
7 1/8% Notes due 2011 and 7 3/4% Debentures due 2031 (the "Outstanding
Securities") in exchange for equivalent amounts of Northrop Systems' 7 1/8%
Exchange Notes due 2011 and 7 3/4% Exchange Debentures due 2031 (the "Exchange
Securities") which have been registered under the Securities Act of 1933 (the
"Securities Act"), upon the terms and subject to the conditions set forth in the
Prospectus dated __________, 2001 (as the same may be amended or supplemented
from time to time, the "Prospectus"), receipt of which is hereby acknowledged,
and in this Letter of Transmittal (which, together with the Prospectus,
constitute the "Exchange Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Outstanding Securities tendered herewith in accordance with the
terms and conditions of the Exchange Offer (including, if the Exchange Offer is
extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of Northrop Systems all right, title and interest in and to such
Outstanding Securities as are being tendered herewith. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent as its agent and
attorney-in-fact (with full knowledge that the Exchange Agent is also acting as
agent of Northrop Systems in connection with the Exchange Offer) with respect to
the tendered Outstanding Securities, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest)
subject only to the right of withdrawal described in the Prospectus, to (i)
deliver Certificates for Outstanding Securities to Northrop Systems together
with all accompanying evidences of transfer and authenticity to, or upon the
order of, Northrop Systems, upon receipt by the Exchange Agent, as the
undersigned's agent, of the Exchange Securities to be issued in exchange for
such Outstanding Securities, (ii) present Certificates for such Outstanding
Securities for transfer, and to transfer the Outstanding Securities on the books
of Northrop Systems, and (iii) receive for the account of Northrop Systems all
benefits and otherwise exercise all rights of beneficial ownership of such
Outstanding Securities, all in accordance with the terms and conditions of the
Exchange Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, sell, assign and transfer the
Outstanding Securities tendered hereby and that, when the same are accepted for
exchange, Northrop Systems will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges and encumbrances, and that
the Outstanding Securities tendered hereby are not subject to any adverse claims
or proxies. The undersigned will, upon request, execute and deliver any
additional documents deemed by Northrop Systems or the Exchange Agent to be
necessary or desirable to complete the exchange, assignment and transfer of the
Outstanding Securities tendered hereby, and the undersigned will comply with its
obligations under the Registration Rights Agreement. The undersigned has read
and agrees to all of the terms of the Exchange Offer.
The name(s) and address(es) of the registered Holder(s) of the Outstanding
Securities tendered hereby should be printed above, as they appear on the
Certificates representing such Outstanding Securities. The Certificate number(s)
and the Outstanding Securities that the undersigned wishes to tender should be
indicated in the appropriate boxes above.
If any tendered Outstanding Securities are not exchanged pursuant to the
Exchange Offer for any reason, or if Certificates are submitted for more
Outstanding Securities than are tendered or accepted for exchange, Certificates
for such nonexchanged or nontendered Outstanding Securities will be returned
(or, in the case of Outstanding Securities tendered by book-entry transfer, such
Outstanding Securities will be credited to an account maintained at DTC),
without expense to the tendering Holder, promptly following the expiration or
termination of the Exchange Offer.
The undersigned understands that tenders of Outstanding Securities pursuant
to any one of the procedures described in "The Exchange Offer" in the Prospectus
and in the instructions attached hereto
5
will, upon Northrop Systems' acceptance for exchange of such tendered
Outstanding Securities, constitute a binding agreement between the undersigned
and Northrop Systems upon the terms and subject to the conditions of the
Exchange Offer. The undersigned recognizes that, under certain circumstances set
forth in the Prospectus, Northrop Systems may not be required to accept for
exchange any of the Outstanding Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the Exchange Securities
be issued in the name(s) of the undersigned or, in the case of a book-entry
transfer of Outstanding Securities, that such Exchange Securities be credited to
the account indicated above maintained at DTC. If applicable, substitute
Certificates representing Outstanding Securities not exchanged or not accepted
for exchange will be issued to the undersigned or, in the case of a book-entry
transfer of Outstanding Securities, will be credited to the account indicated
above maintained at DTC. Similarly, unless otherwise indicated under "Special
Delivery Instructions," please deliver Exchange Securities to the undersigned at
the address shown below the undersigned's signature.
By tendering Outstanding Securities and executing this Letter of
Transmittal or effecting delivery of an Agent's Message in lieu thereof, the
undersigned hereby represents and agrees that (i) the undersigned is not an
"affiliate" of Northrop Systems, (ii) any Exchange Securities to be received by
the undersigned are being acquired in the ordinary course of its business, (iii)
the undersigned has no arrangement or understanding with any person to
participate in a distribution (within the meaning of the Securities Act) of
Exchange Securities to be received in the Exchange Offer, and (iv) if the
undersigned is not a broker-dealer, the undersigned is not engaged in, and does
not intend to engage in, a distribution (within the meaning of the Securities
Act) of such Exchange Securities. Northrop Systems may require the undersigned,
as a condition to the undersigned's eligibility to participate in the Exchange
Offer, to furnish to Northrop Systems (or an agent thereof) in writing
information as to the number of "beneficial owners" within the meaning of Rule
13d-3 under the Exchange Act on behalf of whom the undersigned holds the
Outstanding Securities to be exchanged in the Exchange Offer. By tendering
Outstanding Securities pursuant to the Exchange Offer and executing this Letter
of Transmittal or effecting delivery of an Agent's Message in lieu thereof, a
Holder of Outstanding Securities which is a broker-dealer represents and agrees,
consistent with certain interpretive letters issued by the staff of the Division
of Corporation Finance of the Securities and Exchange Commission to third
parties, that such Outstanding Securities were acquired by such broker-dealer
for its own account as a result of market-making activities or other trading
activities, and it will deliver a Prospectus (as amended or supplemented from
time to time) meeting the requirements of the Securities Act in connection with
any resale of such Exchange Securities (provided that, by so acknowledging and
by delivering a Prospectus, such broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act).
Northrop Systems has agreed that, subject to the provisions of the
Registration Rights Agreement, the Prospectus, as it may be amended or
supplemented from time to time, may be used by a participating broker-dealer (as
defined below) in connection with resales of Exchange Notes received in exchange
for Outstanding Securities, where such Outstanding Securities were acquired by
such participating broker-dealer for its own account as a result of market-
making activities or other trading activities, for a period ending 180 days
after the Expiration Date (subject to extension under certain limited
circumstances described in the Prospectus) or, if earlier, when all such
Exchange Securities have been disposed of by such participating broker-dealer.
In that regard, each broker-dealer who acquired Outstanding Securities for its
own account as a result of market-making or other trading activities (a
"participating broker-dealer"), by tendering such Outstanding Securities and
executing this Letter of Transmittal or effecting delivery of an Agent's Message
in lieu thereof, agrees that, upon receipt of notice from Northrop Systems of
the happening of any event which requires Northrop Systems to make changes in
the Registration Statement or the Prospectus in order that the Registration
Statement or Prospectus do not contain an untrue statement of material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading or of the occurrence of
certain other events specified in the Registration Rights Agreement, such
participating broker-dealer will suspend the sale of Exchange Securities
pursuant to the Prospectus until Northrop Systems has amended or supplemented
the Prospectus to correct such misstatement or omission and has furnished copies
of the amended or supplemented Prospectus to the participating broker-dealer. If
Northrop Systems gives such notice to suspend the sale of
6
the Exchange Securities, it shall extend the 180-day period referred to above
during which participating broker-dealers are entitled to use the Prospectus in
connection with the resale of Exchange Securities by the number of days during
the period from and including the date of the giving of such notice to and
including the date when participating broker-dealers shall have received copies
of the supplemented or amended Prospectus necessary to permit resales of the
Exchange Securities.
As a result, a participating broker-dealer who intends to use the
Prospectus in connection with resales of Exchange Securities received in
exchange for Outstanding Securities pursuant to the Exchange Offer must notify
Northrop Systems, or cause Northrop Systems to be notified, on or prior to the
Expiration Date, that it is a participating broker-dealer. Such notice may be
given in the space provided above or may be delivered to the Exchange Agent at
the address set forth in the Prospectus under "-- Exchange Agent."
The undersigned will, upon request, execute and deliver any additional
documents deemed by Northrop Systems to be necessary or desirable to complete
the sale, assignment and transfer of the Outstanding Securities tendered hereby.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death, bankruptcy or incapacity of the undersigned
and any obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
The undersigned, by completing the box entitled "Description of Outstanding
Securities" above and signing this letter, will be deemed to have tendered the
Outstanding Securities as set forth in such box.
7
HOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON PAGE 14)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED
BY INSTRUCTION 2)
Must be signed by registered Holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Outstanding Securities hereby tendered or on the register
of Holders maintained by Northrop Systems, or by any person(s) authorized to
become the registered Holder(s) by endorsements and documents transmitted
herewith (including such opinions of counsel, certifications and other
information as may be required by Northrop Systems or the Trustee for the
Outstanding Securities to comply with the restrictions on transfer applicable to
the Outstanding Securities). If signature is by an attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or another acting in
a fiduciary capacity or representative capacity, please set forth the signer's
full title. See Instruction 5.
________________________________________________________________________________
________________________________________________________________________________
(SIGNATURE(S) OF HOLDER(S))
Date: _________________, 2001
Name(s)_________________________________________________________________________
________________________________________________________________________________
(PLEASE PRINT)
Capacity (full title)__________________________________________________________
Address________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number
_______________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
8
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED, SEE INSTRUCTIONS 2 AND 5)
_______________________________________________________________________________
(AUTHORIZED SIGNATURE)
Date: _________________, 2001
Name of Firm___________________________________________________________________
Capacity (full title)__________________________________________________________
(PLEASE PRINT)
Address________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number_________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
9
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if Exchange Securities or Outstanding Securities not
tendered are to be issued in the name of someone other than the registered
Holder of the Outstanding Securities whose name(s) appear(s) above.
Issue
[ ] Outstanding Securities not tendered to:
[ ] Exchange Securities to:
Name(s)________________________________________________________________________
Address________________________________________________________________________
(INCLUDE ZIP CODE)
_______________________________________________________________________________
Area Code and
Telephone Number_______________________________________________________________
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if Exchange Securities or Outstanding Securities not
tendered are to be sent to the registered Holder of the Outstanding Securities
whose name(s) appear(s) above at an address other than that shown above, or to
the person set forth under "Special Issuance Instructions" at an address other
than that shown in those instructions.
Mail
[ ] Outstanding Securities not tendered to:
[ ] Exchange Securities to:
Name(s)_________________________________________________________________________
Address_________________________________________________________________________
(INCLUDE ZIP CODE)
________________________________________________________________________________
Area Code and
Telephone Number________________________________________________________________
10
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be completed either if
(a) Certificates are to be forwarded herewith or (b) tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth in "The
Exchange Offer -- Procedures for Tendering" and " -- Book-entry Transfer" in the
Prospectus and an Agent's Message is not delivered. Certificates, or timely
confirmation of a book-entry transfer of such Outstanding Securities into the
Exchange Agent's account at DTC, as well as this Letter of Transmittal, properly
completed and duly executed, with any required signature guarantees, and any
other documents required by this Letter of Transmittal, must be received by the
Exchange Agent at its address set forth herein on or prior to the Expiration
Date. Tenders by book-entry transfer may also be made by delivering an Agent's
Message in lieu hereof. Outstanding Securities may be tendered in whole or in
part in integral multiples of $1,000.
Holders who wish to tender their Outstanding Securities and (i) whose
Outstanding Securities are not immediately available or (ii) who cannot deliver
their Outstanding Securities, this Letter of Transmittal and all other required
documents to the Exchange Agent on or prior to the Expiration Date or (iii) who
cannot complete the procedures for delivery by book-entry transfer on a timely
basis, may tender their Outstanding Securities by properly completing and duly
executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in "The Exchange Offer -- Guaranteed Delivery Procedures
for Securities" in the Prospectus. Pursuant to such procedures: (i) such tender
must be made by or through an Eligible Institution (as defined below); (ii) a
properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by Northrop Systems, must be received
by the Exchange Agent on or prior to the Expiration Date; and (iii) the
Certificates (or a book-entry confirmation) representing all tendered
Outstanding Securities, in proper form for transfer, together with a Letter of
Transmittal, properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in lieu thereof, and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
within three New York Stock Exchange trading days after the date of execution of
such Notice of Guaranteed Delivery, all as provided in "The Exchange Offer" in
the Prospectus.
The Notice of Guaranteed Delivery may be delivered by telegram or
transmitted by facsimile or mail to the Exchange Agent, and must include a
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery. For Outstanding Securities to be properly tendered
pursuant to the guaranteed delivery procedure, the Exchange Agent must receive a
Notice of Guaranteed Delivery on or prior to the Expiration Date. As used
herein and in the Prospectus, "Eligible Institution" means a member firm of a
registered national securities exchange or the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an eligible guarantor institution as
defined by Rule 17Ad-15 under the Exchange Act.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Northrop Systems will not accept any alternative, conditional or
contingent tenders. Each tendering Holder, by execution of a Letter of
Transmittal or delivery of an Agent's Message, waives any right to receive any
notice of the acceptance of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered
holder (which term, for purposes of this document, shall include any
participant in DTC whose name appears on a
11
security position listing as the owner of the Outstanding Securities
(the "Holder")) of Outstanding Securities tendered herewith, unless
such Holder(s) has completed either the box entitled "Special
Issuance Instructions" or the box entitled "Special Delivery
Instructions" above, or
(ii) such Outstanding Securities are tendered for the account
of a firm that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the
signature(s) on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Outstanding Securities" is inadequate, the Certificate number(s)
and/or the principal amount of Outstanding Securities and any other required
information should be listed on a separate signed schedule which is attached to
this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Outstanding
Securities will be accepted only in integral multiples of $1,000. If less than
all the Outstanding Securities evidenced by any Certificate submitted are to be
tendered, fill in the principal amount of Outstanding Securities which are to be
tendered in the box entitled "Principal Amount of Outstanding Securities
Tendered." In such case, new Certificate(s) for the remainder of the Outstanding
Securities that were evidenced by your old Certificate(s) will be sent to the
Holder of the Outstanding Security, promptly after the Expiration Date. All
Outstanding Securities represented by Certificates delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated.
Tenders of Outstanding Securities may be withdrawn at any time on or prior
to the Expiration Date. In order for a withdrawal to be effective on or prior
to that time, a written, telegraphic or facsimile transmission of such notice of
withdrawal must be timely received by the Exchange Agent at the address set
forth above on or prior to the Expiration Date. Any such notice of withdrawal
must specify the name of the person who tendered the Outstanding Securities to
be withdrawn, the aggregate principal amount of Outstanding Securities to be
withdrawn, and (if Certificates for Outstanding Securities have been tendered)
the name of the registered Holder of the Outstanding Securities as set forth on
the Certificate for the Outstanding Securities, if different from that of the
person who tendered such Outstanding Securities. If Certificates for the
Outstanding Securities have been delivered or otherwise identified to the
Exchange Agent, then prior to the physical release of such Certificates for the
Outstanding Securities, the tendering Holder must submit the serial numbers
shown on the particular Certificates for the Outstanding Securities to be
withdrawn and the signature on the notice of withdrawal must be guaranteed by an
Eligible Institution, except in the case of Outstanding Notes tendered for the
account of an Eligible Institution. If Outstanding Securities have been
tendered pursuant to the procedures for book-entry transfer set forth in the
Prospectus under "The Exchange Offer -- Procedures for Tendering" and " -- Book-
entry Transfer," the notice of withdrawal must specify the name and number of
the account at DTC to be credited with the withdrawal of Outstanding Securities,
in which case a notice of withdrawal will be effective if delivered to the
Exchange Agent by written, telegraphic, or facsimile transmission. Withdrawals
of tenders of Outstanding Securities may not be rescinded. Outstanding
Securities properly withdrawn will not be deemed validly tendered for purposes
of the Exchange Offer, but may be retendered at any subsequent time on or prior
to the Expiration Date by following any of the procedures described in the
Prospectus under "The Exchange Offer -- Procedures for Tendering."
All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by Northrop Systems,
in its sole discretion, whose determination shall be final and binding on all
parties. Northrop Systems, any affiliates or assigns of Northrop Systems, the
Exchange Agent or any other person shall not be under any duty to give any
notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any Outstanding Securities
which have been tendered but which are withdrawn will be returned to the Holder
thereof without cost to such Holder promptly after withdrawal.
12
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS.
If this Letter of Transmittal is signed by the registered Holder(s) of the
Outstanding Securities tendered hereby, the signature(s) must correspond exactly
with the name(s) as written on the face of the Certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Outstanding Securities tendered hereby are owned of
record by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any tendered Outstanding Securities are registered in different
name(s) on several Certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal as there are different
registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by
Northrop Systems, must submit proper evidence satisfactory to Northrop Systems,
in its sole discretion, of each such person's authority so to act.
When this Letter of Transmittal is signed by the registered owner(s)
of the Outstanding Securities listed and transmitted hereby, no endorsement(s)
of Certificate(s) or separate bond power(s) are required unless Exchange
Securities are to be issued in the name of a person other than the registered
Holder(s).
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Outstanding Securities listed, the Certificates must
be endorsed or accompanied by appropriate bond powers, signed exactly as the
name or names of the registered owner(s) appear(s) on the Certificates, and also
must be accompanied by such opinions of counsel, certifications and other
information as Northrop Systems or the Trustee for the Outstanding Securities
may require in accordance with the restrictions on transfer applicable to the
Outstanding Securities. Signatures on such Certificates or bond powers must be
guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If Exchange
Securities are to be issued in the name of a person other than the signer of
this Letter of Transmittal, or if Exchange Securities are to be sent to someone
other than the signer of this Letter of Transmittal or to an address other than
that shown above, the appropriate boxes on this Letter of Transmittal should be
completed. Certificates for Outstanding Securities not exchanged will be
returned by mail or, if tendered by book-entry transfer, by crediting the
account indicated above maintained at DTC. See Instruction 4.
7. IRREGULARITIES. Northrop Systems will determine, in its sole
discretion, all questions as to the form of documents, validity,
eligibility(including time of receipt) and acceptance for exchange of any tender
of Outstanding Securities, which determination shall be final and binding on all
parties. Northrop Systems reserves the absolute right to reject any and all
tenders determined by them not to be in proper form or the acceptance of which,
or exchange for which, may, in the view of counsel to Northrop Systems, be
unlawful. Northrop Systems also reserves the absolute right, subject to
applicable law, to waive any of the conditions of the Exchange Offer set forth
in the Prospectus under "The Exchange Offer -- Conditions to the Exchange Offer"
or any conditions or irregularity in any tender of Outstanding Notes of any
particular Holder whether or not similar conditions or irregularities are waived
in the case of other Holders. Northrop Systems' interpretation of the terms and
conditions of the Exchange Offer (including this Letter of Transmittal and the
instructions hereto) will be final and binding. No tender of Outstanding
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Northrop Systems, any
affiliates or assigns of Northrop Systems, the Exchange Agent, or any other
person shall not be under any duty to give notification of any irregularities in
tenders or incur any liability for failure to give such notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES.
Questions and requests for assistance may be directed to the Exchange Agent at
its address and telephone number set forth on the front of this Letter of
Transmittal. Additional copies of the Prospectus, the Notice of Guaranteed
Delivery and the Letter of Transmittal may be obtained from the Exchange Agent
or from your broker, dealer, commercial bank, trust company or other nominee.
13
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under the U.S.
Federal income tax law, a Holder whose tendered Outstanding Securities are
accepted for exchange is required to provide the Exchange Agent with such
Holder's correct taxpayer identification number ("TIN") on Substitute From W-9
below. If the Exchange Agent is not provided with the correct TIN, the Internal
Revenue Service (the "IRS") may subject the Holder or other payee to a $50
penalty. In addition, payments to such Holders or other payees with respect to
Outstanding Securities exchanged pursuant to the Exchange Offer may be subject
to 31% backup withholding.
The box in Part 3 of the Substitute From W-9 may be checked if the
tendering Holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 3 is checked, the
Holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60-day period following the date of the Substitute From W-9.
If the Holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute From W-9, the amounts retained during the 60-day period
will be remitted to the Holder and no further amounts shall be retained or
withheld from payments made to the Holder thereafter. If, however, the Holder
has not provided the Exchange Agent with its TIN within such 60-day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31% of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
The Holder is required to give the Exchange Agent the TIN (e.g.,
social security number or employer identification number) of the registered
owner of the Outstanding Securities or of the last transferee appearing on the
transfers attached to, or endorsed on, the Outstanding Securities. If the
Outstanding Securities are registered in more than one name or are not in the
name of the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute From W-9" for additional guidance
on which number to report.
Certain Holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such Holders should nevertheless
complete the attached Substitute From W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. In order for a foreign
person to qualify as an exempt recipient, such Holder must submit a
statement(generally IRS From W-8), signed under penalties of perjury, attesting
to that person's exempt status. Northrop Systems will not withhold federal
income tax on interest paid to a Non-United States Holder if it receives IRS
From W-8 ECI from that Non-United States Holder, establishing that such income
is effectively connected with the conduct of a trade or business in the United
States, unless Northrop Systems has knowledge to the contrary. Please consult
the enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute From W-9" for additional guidance on which Holders are exempt from
backup withholding.
Backup withholding is not an additional U.S. Federal income tax.
Rather, the U.S. Federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
10. WAIVER OF CONDITIONS. Northrop Systems reserves the absolute right
to waive satisfaction of any or all conditions enumerated in the Prospectus.
11. NO CONDITIONAL TENDERS. No alternative, conditional or contingent
tenders will be accepted. All tendering Holders of Outstanding Securities, by
execution of this Letter of Transmittal, shall waive any right to receive notice
of the acceptance of Outstanding Securities for exchange.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any
Certificate(s)representing Outstanding Securities have been lost, destroyed or
stolen, the Holder should promptly notify the Exchange Agent. The Holder will
then be instructed as to the steps that must be taken in order to replace the
Certificate(s).
14
This Letter of Transmittal and related documents cannot be processed until the
procedures for replacing lost, destroyed or stolen Certificate(s) have been
followed.
13. SECURITY TRANSFER TAXES. Holders who tender their Outstanding
Securities for exchange will not be obligated to pay any transfer taxes in
connection therewith. If, however, Exchange Securities are to be delivered to,
or are to be issued in the name of, any person other than the registered Holder
of the Outstanding Securities tendered, or if a transfer tax is imposed for any
reason other than the exchange of Outstanding Securities in connection with the
Exchange Offer, then the amount of any such transfer tax (whether imposed on the
registered Holder or any other persons) will be payable by the tendering Holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering Holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON
OR PRIOR TO THE EXPIRATION DATE.
TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS (SEE INSTRUCTION 9)
15
PAYOR'S NAME: THE CHASE MANHATTAN BANK
- -------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN AT RIGHT AND __________________________
FORM W-9 CERTIFY BY SIGNING AND DATING BELOW. Social Security Number
__________________________
Employer Identification Number
----------------------------------------------------------------------------------------------------
DEPARTMENT OF THE PART 2-- PART 3 --
TREASURY, INTERNAL CERTIFICATION -- Under the Penalties of Perjury, I Check if TIN Applied for [ ]
REVENUE SERVICE certify that: (I) The number shown on this form is
PAYOR'S REQUEST FOR my correct taxpayer identification number (or I am
TAXPAYER waiting for a number to be issued to me), (2) I am
IDENTIFICATION not subject to backup withholding either because
NUMBER ("TIN") AND (i) I am exempt from backup withholding, (ii) I
CERTIFICATION have not been notified by the Internal Revenue
Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all
interest or dividends, or (iii) the IRS has
notified me that I am no longer subject to backup
withholding, and (3) any other information
provided on this form is true and correct.
- -------------------------------------------------------------------------------------------------------------------------
You must cross out item (2) in Part (2) above if you have been notified by the IRS that you are subject to backup
withholding because of underreporting interest or dividends on you tax return and you have not been notified by the IRS
that you are no longer subject to backup withholding
- -------------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN A $50 PENALTY IMPOSED BY THE INTERNAL REVENUE SERVICE AND
BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE
EXCHANGE SECURITIES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-
9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all payments made to me on account of the Exchange Securities shall be
retained until I provide a taxpayer identification number to the Exchange Agent
and that, if I do not provide my taxpayer identification number within 60 days,
such retained amounts shall be remitted to the Internal Revenue Service as
backup withholding and 31% of all reportable payments made to me thereafter will
be withheld and remitted to the Internal Revenue Service until I provide a
taxpayer identification number.
SIGNATURE _______________________________________ DATE ________________, 2001
16
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
NORTHROP GRUMMAN SYSTEMS CORPORATION
(formerly Northrop Grumman Corporation)
OFFER TO EXCHANGE ITS
7 1/8% EXCHANGE NOTES DUE 2011 FOR ITS OUTSTANDING 7 1/8% NOTES DUE 2011
7 3/4% EXCHANGE DEBENTURES DUE 2031 FOR ITS OUTSTANDING 7 3/4% DEBENTURES DUE
2031
THE EXCHANGE NOTES AND EXCHANGE DEBENTURES TO BE UNCONDITIONALLY
GUARANTEED BY NORTHROP GRUMMAN CORPORATION (formerly NNG, INC.)
AND LITTON INDUSTRIES, INC.
PURSUANT TO THE PROSPECTUS DATED ______________________, 2001
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for Northrop Grumman Systems Corporation's outstanding 7 1/8% Notes
due 2011 and 7 3/4% Debentures due 2031 (the "Outstanding Securities") are not
immediately available, (ii) Outstanding Securities, the Letter of Transmittal
and all other required documents cannot be delivered to The Chase Manhattan Bank
(the "Exchange Agent") on or prior to the Expiration Date or (iii) the
procedures for delivery by book-entry transfer cannot be completed on a timely
basis. This Notice of Guaranteed Delivery may be delivered by telegram,
overnight courier or mail, or transmitted by facsimile transmission, to the
Exchange Agent. See "The Exchange Offer - Procedures for tendering" and "-
Guaranteed Delivery Procedures for Securities" in the Prospectus. Capitalized
terms not defined herein have the meanings assigned to them in the Prospectus.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE CHASE MANHATTAN BANK
By Mail:
-------
P.O. Box 2320
Dallas, TX 75221-2320
Attn: Events
By Hand Delivery or Overnight Courier:
-------------------------------------
2001 Bryan Street, 9th Floor
Dallas, TX 75201
Attn: Events
By Facsimile Transmission:
-------------------------
(214)468-6494
For Information or Confirmation by Telephone:
--------------------------------------------
(800) 275-2048
----------------------
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE
TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES.
IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN
"ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE
MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER
OF TRANSMITTAL.
1
Ladies and Gentlemen:
The undersigned hereby tenders to Northrop Grumman Systems Corporation, a
Delaware corporation, formerly Northrop Grumman Corporation ("Northrop
Systems"), acting on its behalf and on behalf of Northrop Grumman Corporation,
formerly NNG, Inc., and Litton Industries, Inc., a Delaware corporation, upon
the terms and subject to the conditions set forth in the Prospectus dated
_______________, 2001 (as the same may be amended or supplemented from time to
time, the "Prospectus"), and the related Letter of Transmittal (which together
constitute the "Exchange Offer"), receipt of which is hereby acknowledged, the
aggregate principal amount of Outstanding Securities set forth below pursuant to
the guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer - Guaranteed Delivery Procedures for Securities."
7 1/8% NOTES DUE 2011
Name(s) of Registered
Amount Tendered: $ ______________________ Holder(s): _______________________
Certificate No(s) (if available): _____________________________________________
_______________________________________________________________________________
$______________________________________________________________________________
(Total Principal Amount Represented by 7 1/8% Notes Certificate(s))*
7 3/4% DEBENTURES DUE 2031
Name(s) of Registered
Amount Tendered: $ _______________________ Holder(s): _____________________
Certificate No(s) (if available): ____________________________________________
______________________________________________________________________________
$_____________________________________________________________________________
(Total Principal Amount Represented by 7 3/4% Debentures Certificate(s))*
If Outstanding Securities will be tendered by book-entry transfer, provide the
following:
DTC Account
Number: ______________________________________________________________________
Date: ________________________________________________________________________
* Must be in integral multiples of $1,000
2
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
________________________________________________________________________________
PLEASE SIGN HERE
X ______________________________________ _____________________________________
X ______________________________________ _____________________________________
Signature(s) of Owner(s) or Authorized Date
Signatory
Area Code and Telephone Number: ________________________________________________
Must be signed by the holder(s) of the Outstanding Securities as their name(s)
appear(s) on certificates for Outstanding Securities or on a security position
listing, or by person(s) authorized to become registered holder(s) by
endorsement and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian, attorney-in-
fact, officer or other person acting in a fiduciary or representative capacity,
such person must set forth his or her full title below and, unless waived by
Northrop Systems, provide proper evidence satisfactory to Northrop Systems of
such person's authority to so act.
Please print name(s) and address(es)
Name(s) ___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
Capacity: ___________________________________________________________________
Address(es):___________________________________________________________________
___________________________________________________________________
3
GUARANTEE OF DELIVERY
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities exchange or
of the National Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United States, or an
eligible guarantor institution as defined by Rule l7Ad-15 under the Securities
Exchange Act of 1934, as amended (each of the foregoing being referred to as an
"Eligible Institution"), hereby guarantees to deliver to the Exchange Agent, at
one of its addresses set forth above, either the Outstanding Securities tendered
hereby in proper form for transfer, or confirmation of the book-entry transfer
of such Outstanding Securities to the Exchange Agent's account at The Depository
Trust Company ("DTC"), pursuant to the procedures for book-entry transfer set
forth in the Prospectus, in either case together with one or more properly
completed and duly executed Letter(s) of Transmittal, or an Agent's Message in
lieu thereof, and any other required documents within three New York Stock
Exchange trading days after the date of execution of this Notice of Guaranteed
Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal, or an Agent's Message in lieu thereof, and the Outstanding
Securities tendered hereby to the Exchange Agent within the time period set
forth above and that failure to do so could result in a financial loss to the
undersigned.
----------------------------------- -----------------------------------
Name of Firm Authorized Signature
----------------------------------- -----------------------------------
Address Title
----------------------------------- -----------------------------------
Zip Code Name (Please type or print)
Area Code and
Telephone Number: __________________ Date: _______________________________
NOTE: DO NOT SEND CERTIFICATES FOR OUTSTANDING SECURITIES WITH THIS FORM.
CERTIFICATES FOR OUTSTANDING SECURITIES SHOULD ONLY BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
4
NORTHROP GRUMMAN SYSTEMS CORPORATION
(formerly Northrop Grumman Corporation)
INSTRUCTION TO REGISTERED HOLDER AND/OR DEPOSITORY TRUST COMPANY
PARTICIPANT FROM BENEFICIAL OWNER
FOR
OFFER TO EXCHANGE ITS
7 1/8% EXCHANGE NOTES DUE 2011 FOR ITS OUTSTANDING 7 1/8% NOTES DUE 2011
7 3/4% EXCHANGE DEBENTURES DUE 2031 FOR ITS OUTSTANDING 7 3/4% DEBENTURES
DUE 2031
THE EXCHANGE NOTES AND EXCHANGE DEBENTURES TO BE UNCONDITIONALLY
GUARANTEED BY NORTHROP GRUMMAN CORPORATION (formerly NNG, Inc.)
AND LITTON INDUSTRIES, INC.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON __________, 2001, UNLESS THE OFFER IS EXTENDED.
TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME,
ON THE EXPIRATION DATE.
To Registered Holder and/or Depository Trust Company Participant:
The undersigned hereby acknowledges receipt of the Prospectus dated,
___________, 2001 (the "Prospectus") of Northrop Grumman Systems Corporation, a
Delaware corporation, formerly Northrop Grumman Corporation ("Northrop
Systems"), Northrop Grumman Corporation, a Delaware corporation, formerly NNG,
Inc. ("Northrop Grumman"), and Litton Industries, Inc., a Delaware corporation
("Litton"), and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), that together constitute Northrop Systems', Northrop Grumman's
and Litton's offer (the "Exchange Offer") to exchange Northrop Systems' 7 1/8%
Exchange Notes due 2011 and 7 3/4% Exchange Debentures due 2031 (the
"Exchange Securities") for all of its outstanding 7 1/8% Notes due 2011 and 7
3/4% Debentures due 2031 (the "Outstanding Securities"). Capitalized terms used
but not defined herein have the meanings ascribed to them in the Prospectus.
This will instruct you, the registered holder and/or Depository Trust
Company Participant, as to the action to be taken by you relating to the
Exchange Offer with respect to the Outstanding Securities held by you for the
account of the undersigned.
The aggregate face amount of the Outstanding Securities held by you
for the account of the undersigned is (FILL IN AMOUNT):
$ _____________ of the 7 1/8% Notes due 2011
$ _____________ of the 7 3/4% Debentures due 2031
With respect to the Exchange Offer, the undersigned hereby instructs
you (CHECK APPROPRIATE BOX):
[ ] To TENDER the following Outstanding Securities held by you for
the account of the undersigned (INSERT PRINCIPAL AMOUNT OF
OUTSTANDING SECURITIES TO BE TENDERED (IF LESS THAN ALL)):
$ _____________ 7 1/8% Notes due 2011
$ _____________ 7 3/4% Debentures due 2031
[ ] NOT to TENDER any Outstanding Securities held by you for the
account of the undersigned.
1
If the undersigned instructs you to tender any Outstanding Securities
held by you for the account of the undersigned, it is understood that you are
authorized to make, on behalf of the undersigned (and the undersigned, by its
signature below, hereby makes to you), the representations and warranties
contained in the Letter of Transmittal that are to be made with respect to the
undersigned as a beneficial owner, including but not limited to the
representations that (i) the undersigned is not an "affiliate" of Northrop
Systems, (ii) any Exchange Securities to be received by the undersigned are
being acquired in the ordinary course of its business, (iii) the undersigned has
no arrangement or understanding with any person to participate in a distribution
(within the meaning of the Securities Act) of Exchange Securities to be received
in the Exchange Offer, and (iv) if the undersigned is not a broker-dealer, the
undersigned is not engaged in, and does not intend to engage in, a distribution
(within the meaning of the Securities Act) of such Exchange Securities. Northrop
Systems may require the undersigned, as a condition to the undersigned's
eligibility to participate in the Exchange Offer, to furnish to Northrop Systems
(or an agent thereof) in writing information as to the number of "beneficial
owners" within the meaning of Rule 13d-3 under the Exchange Act on behalf of
whom the undersigned holds the Outstanding Securities to be exchanged in the
Exchange Offer. By tendering Outstanding Securities pursuant to the Exchange
Offer, a holder of Outstanding Securities which is a broker-dealer represents
and agrees, consistent with certain interpretive letters issued by the staff of
the Division of Corporation Finance of the Securities and Exchange Commission to
third parties, that such Outstanding Securities were acquired by such broker-
dealer for its own account as a result of market-making activities or other
trading activities, and it will deliver a Prospectus (as amended or supplemented
from time to time) meeting the requirements of the Securities Act in connection
with any resale of such Exchange Securities (provided that, by so acknowledging
and by delivering a Prospectus, such broker-dealer will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act).
SIGN HERE
_______________________________________________________________________________
Name of beneficial owner(s)
_______________________________________________________________________________
_______________________________________________________________________________
Signature(s)
_______________________________________________________________________________
_______________________________________________________________________________
Name(s) (please print)
_______________________________________________________________________________
(Address)
_______________________________________________________________________________
(Telephone Number)
_______________________________________________________________________________
(Taxpayer Identification or Social Security Number)
_______________________________________________________________________________
Date
[ ] Check here if you are a broker-dealer and wish to receive 10 additional
copies of the Prospectus and 10 copies of any amendments or supplements thereto.
2
