Exhibit 99.4
14,000,000 SHARES
L-3 COMMUNICATIONS HOLDINGS, INC.
COMMON STOCK, $.01 PAR VALUE
UNDERWRITING AGREEMENT
June 24, 2002
XXXXXX BROTHERS INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, XXXXXXX & CO. INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XX XXXXX SECURITIES CORPORATION
As Representatives of the several
Underwriters named in Schedule 1
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
L-3 Communications Holdings, Inc., a Delaware corporation (the
"Company"), proposes to sell an aggregate of 14,000,000 shares (the "Firm
Stock") of the Company's Common Stock, par value $.01 per share (the "Common
Stock"). In addition, the Company proposes to grant to the Underwriters named in
Schedule 1 hereto (the "Underwriters") options to purchase up to an aggregate of
2,100,000 additional shares of the Common Stock on the terms and for the
purposes set forth in Section 2 (the "Option Stock"). The Firm Stock and the
Option Stock, if purchased, are hereinafter collectively called the "Stock." As
described in the Prospectus (hereinafter defined), the Company will use the net
proceeds from the sale of the Stock to repay existing indebtedness, including
indebtedness outstanding under its 364-day revolving credit facility and its
five-year revolving credit facility (together, the "Senior Credit Facilities"),
and, to the extent available, for general corporate purposes, including
potential acquisitions. This is to confirm the agreement concerning the purchase
of the Stock from the Company by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3, and amendments Xx. 0,
Xx. 0, Xx. 0 and No. 4 thereto on Form S-3/A, with respect to the
Stock have (i) been prepared by the Company in conformity with the
requirements of the United States Securities Act of 1933, as amended
(the "Securities Act") and the rules and regulations (the "Rules and
Regulations") of the United States Securities and Exchange Commission
(the "Commission") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement and the
amendments thereto have been delivered by the Company to you as the
representatives (the "Representatives") of the Underwriters. As used
in this Agreement, "Effective Time" means the date and time as of
which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission;
"Effective Date" means the date of the Effective Time; "Preliminary
Prospectus" means each prospectus included in such registration
statement, or amendments thereof, before it became effective under the
Securities Act and any prospectus filed with the Commission by the
Company with the consent of the Representatives pursuant to Rule
424(a) of the Rules and Regulations; "Registration Statement" means
such registration statement, as amended at the Effective Time,
including any documents incorporated by reference therein at such time
and all information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations in
accordance with Section 5 hereof and deemed to be a part of the
registration statement as of the Effective Time pursuant to paragraph
(b) of Rule 430A of the Rules and Regulations; and "Prospectus" means
such final prospectus, as first filed with the Commission pursuant to
paragraph (1) or (4) of Rule 424(b) of the Rules and Regulations.
Reference made herein to any Preliminary Prospectus or to the
Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act (such documents referred to herein as the
"Exchange Act Documents"), as of the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and any reference to
any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any document filed
under the United States Securities Exchange Act of 1934, as amended
(the "Exchange Act"), after the date of such Preliminary Prospectus or
the Prospectus, as the case may be, and incorporated by reference in
such Preliminary Prospectus or the Prospectus, as the case may be; and
any reference to any amendment to the Registration Statement shall be
deemed to include any annual report of the Company filed with the
Commission pursuant to section 13(a) or 15(d) of the Exchange Act
after the Effective Time that is incorporated by reference in the
Registration Statement. If the Company has filed or is required
pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Securities Act registering additional shares
of Common Stock (a "Rule 462(b) Registration Statement"), then, unless
otherwise specified, any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462(b) Registration
Statement. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus; and no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission. Any Rule 462(b) Registration Statement
filed after the effectiveness of this Agreement will become effective
no later than 10:00 A.M., New York City time, on the date following
this Agreement.
(b) The documents incorporated by reference in the Prospectus,
when they were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Exchange
Act and the rules and regulations of the Commission
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thereunder, and none of such documents contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; and
any further documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with the Commission will
conform in all material respects to the requirements of the Exchange
Act and the rules and regulations of the Commission thereunder and
will not 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, in light of the circumstances under which
they were made, not misleading.
(c) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the
effectiveness of this Agreement) conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement
(including, if the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such
Rule 462(b) Registration Statement and any amendments thereto) or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to
the requirements of the Securities Act and the Rules and Regulations
and did not and will not, as of the applicable Effective Date (as to
the Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain 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 light of the
circumstances under which they were made, not misleading; provided
that no representation or warranty is made as to information contained
in or omitted from the Registration Statement or the Prospectus in
reliance upon and in conformity with written information furnished to
the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein.
(d) The market-related and customer-related data and estimates
included or incorporated by reference in the Prospectus are based on
or derived from sources which the Company believes to be reliable and
accurate.
(e) The Company and each of its subsidiaries (as defined in
Section 15 hereof) have been duly organized and are validly existing
as corporations, limited liability companies or limited partnerships,
as applicable, in good standing under the laws of their respective
jurisdictions of organization, are duly qualified to do business and
are in good standing as foreign corporations, limited liability
companies or limited partnerships, as applicable, in each jurisdiction
in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification,
except for such qualification and good standing the failure of which,
individually or in the aggregate, would not result in a material
adverse effect on the condition (financial or other), business,
prospects, properties, stockholders' equity or results of operations
of the Company and its subsidiaries taken as a whole (a "Material
Adverse Effect"), and have all power and authority necessary to own or
hold their respective properties and to conduct the businesses in
which they are engaged.
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(f) Prior to the delivery of the Stock on the First Delivery Date,
the Company will have an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof
contained in the Prospectus and the issuance of the Stock is not
subject to preemptive or similar rights; and (i) approximately 70% of
the membership interests in Aviation Communications & Surveillance
Systems, LLC, (ii) approximately 90% of the capital stock of
Electronic Space Systems (UK) Limited, (iii) 99.99% of the capital
stock of ESSCO Xxxxxxx Limited, (iv) approximately 50% of the
membership interests in Arbeitmedizinische Betreungsgesellschaft
Xxxxxx Bertriebe mbH, (v) approximately 98% of the membership
interests in Misure Radioelettriche S.r.l., (vi) approximately 50% of
the membership interests in ITel Solutions, LLC, (vii) approximately
53.5% of the capital stock of LogiMetrics, Inc., (viii) approximately
53.5% of the capital stock of Logimetrics FSC, Inc., (ix)
approximately 53.5% of the capital stock of mmTECH, Inc., and (x) 100%
of the issued shares of capital stock or membership interests of each
other subsidiary of the Company have been duly and validly authorized
and issued and are fully paid and non-assessable and (except for
directors' qualifying shares) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims, other than (A) liens, encumbrances, equities or claims
described in the Prospectus or in the documents incorporated therein
by reference, (B) a pledge of such shares to secure the Senior Credit
Facilities and (C) such other liens, encumbrances, equities or claims
as do not have a Material Adverse Effect.
(g) Prior to the delivery of the Stock on the First Delivery Date,
the unissued shares of the Stock to be issued and sold by the Company
to the Underwriters hereunder will have been duly and validly
authorized and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued, fully paid and
non-assessable; and the Stock will conform to the description thereof
contained in the Prospectus and the issuance of the Stock is not
subject to preemptive or similar rights.
(h) The Company and L-3 Communications Corporation (the
"Significant Subsidiary") have all necessary corporate right, power
and authority to execute and deliver this Agreement and perform their
obligations hereunder; and this Agreement and the transactions
contemplated hereby have been duly authorized, executed and delivered
by the Company and the Significant Subsidiary.
(i) The execution, delivery and performance of this Agreement by
the Company and the Significant Subsidiary and the consummation of the
transactions contemplated hereby will not conflict with or constitute
a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the properties or
assets of the Company or any of its subsidiaries is subject that is
material to the financial condition or prospects of the Company and
its subsidiaries, taken as a whole (collectively, the "Material
Agreements"), except for such conflicts, breaches, violations or
defaults which, individually, or in the aggregate, would not result in
a Material Adverse Effect, nor will such actions result in any
violation of the
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provisions of the charter, by-laws or other organizational documents
of the Company or any of its subsidiaries or any material law, statute
or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets, provided, that the
provisions for indemnification and contribution hereunder and
thereunder may be limited by equitable principles and public policy
considerations; and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act, and applicable state or foreign securities laws in connection
with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement
by the Company and the Significant Subsidiary, as applicable, and the
consummation of the transactions contemplated hereby.
(j) Except as described in the Prospectus or in the documents
incorporated therein by reference, there are no contracts, agreements
or understandings between the Company and any person granting such
person the right (other than rights which have been waived or
satisfied or rights not exercisable in connection with the
Registration Statement) to require the Company to file a registration
statement under the Securities Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Securities Act; and all such rights to include such
securities in the securities being registered pursuant to the
Registration Statement have been waived in a manner consistent with
the terms under which they were granted.
(k) Except as described in the Prospectus or in the documents
incorporated therein by reference, the Company has not sold or issued
any shares of Common Stock during the six-month period preceding the
date of the Prospectus, including any sales pursuant to Rule 144A
under, or Regulations D or S of, the Securities Act other than shares
issued upon conversion of any outstanding 5.25% Convertible Senior
Subordinated Notes due 2009 or any outstanding 4% Senior Subordinated
Convertible Contingent Notes due 2011 (CODES) (referred to herein as
the "Conversions"), or shares issued pursuant to employee benefit
plans, qualified stock option plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.
(l) Neither the Company nor any of its subsidiaries has incurred,
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, any liability or
obligation, direct or contingent, or entered into any transaction, in
each case not in the ordinary course of business, that would result in
a Material Adverse Effect, otherwise than as set forth or contemplated
in the Prospectus or in the documents incorporated therein by
reference; and, since such date, there has not been any material
change in the capital stock or material increase in the short-term or
long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving or which would
reasonably be expected to involve a
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Material Adverse Effect, otherwise than as described or contemplated
in the Prospectus or in the documents incorporated therein by
reference.
(m) The historical and pro forma financial statements, together
with the related notes, set forth or incorporated by reference in the
Prospectus comply as to form in all material respects with the
requirements of Regulation S-X under the Securities Act applicable to
registration statements on Form S-3 under the Securities Act. The
historical consolidated financial statements of the Company and the
Significant Subsidiary fairly present the financial position and the
results of operations and cash flows of the entities purported to be
shown thereby, at the dates and for the periods indicated, and have
been prepared in accordance with generally accepted accounting
principles consistently applied throughout such periods. Such pro
forma financial statements have been prepared on a basis consistent
with such historical statements of the Company, except for the pro
forma adjustments specified therein, and give effect to assumptions
made on a reasonable basis and in good faith and present fairly the
historical and proposed transactions contemplated by the Prospectus
and this Agreement. The other financial and statistical information
and data included or incorporated by reference in the Prospectus,
historical and pro forma, have been derived from the financial records
of the Company (or its predecessors) and, in all material respects,
have been prepared on a basis consistent with such books and records
of the Company (or its predecessor), except as disclosed therein.
(n) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company, whose report is incorporated by
reference in the Prospectus and who have delivered the initial letter
referred to in Section 7(g) hereof, are independent certified public
accountants as required by the Securities Act and the Rules and
Regulations promulgated thereunder during the periods covered by the
financial statements on which they reported contained or incorporated
by reference in the Prospectus.
(o) The Company and each of its subsidiaries have good and
marketable title to all property (real and personal) described in the
Prospectus as being owned by them, free and clear of all liens,
claims, security interests or other encumbrances except such as are
described in the Prospectus (or in the documents incorporated therein
by reference) or, to the extent that any such liens, claims, security
interests or other encumbrances would not have a Material Adverse
Effect (individually or in the aggregate) and all the material
property described in the Prospectus as being held under lease by the
Company and its subsidiaries is held by them under valid, subsisting
and enforceable leases, with only such exceptions as would not have a
Material Adverse Effect (individually or in the aggregate).
(p) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, trademarks, service
marks, trade names, copyrights, licenses, inventions, trade secrets
and other rights, and all registrations or applications relating
thereto, described in the Prospectus as being owned by them or
necessary for the conduct of their business, except as such would not
have a Material Adverse Effect (individually or in the aggregate), and
the Company is not aware of any pending or threatened claim to
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the contrary or any pending or threatened challenge by any other
person to the rights of the Company and its subsidiaries with respect
to the foregoing which, if determined adversely to the Company and its
subsidiaries, would have a Material Adverse Effect (individually or in
the aggregate).
(q) Except as described in the Prospectus or in the documents
incorporated therein by reference, there are no legal or governmental
proceedings pending or, to the knowledge of the Company, threatened,
against the Company or any of its subsidiaries or to which the Company
or any of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the subject which,
if determined adversely to the Company or any of its subsidiaries, are
reasonably likely to cause a Material Adverse Effect.
(r) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(s) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed
as exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations.
(t) No material relationship, direct or indirect, exists between
or among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
except as described in the Prospectus or in the documents incorporated
therein by reference.
(u) The Company is not involved in any strike, job action or labor
dispute with any group of employees that would have a Material Adverse
Effect, and, to the Company's knowledge, no such action or dispute is
threatened.
(v) Except as disclosed in the Prospectus or in the documents
incorporated therein by reference, the Company is in compliance in all
material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) subject to Title IV of ERISA
for which the Company would have any material liability; the Company
has not incurred and does not expect to incur any material liability
under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any such "pension plan" or (ii) Sections 412 or 4971
of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code")
(other than contributions in the normal course which are not in
default); and each such "pension plan" for which the Company would
have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which
would reasonably be expected to cause the loss of such qualification.
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(w) The Company and its subsidiaries have filed all federal, state
and local income and franchise tax returns required to be filed
through the date hereof and have paid all taxes due thereon, and no
tax deficiency has been determined adversely to the Company or any of
its subsidiaries nor does the Company have any knowledge of any tax
deficiency which, if determined adversely to the Company and its
subsidiaries, might have a Material Adverse Effect.
(x) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws or other organizational documents,
(ii) is in default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or
condition contained in any Material Agreement or (iii) is in violation
in any material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may
be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its
business, except as would not, individually or in the aggregate, have
a Material Adverse Effect.
(y) To the best of the Company's knowledge, neither the Company
nor any of its subsidiaries, nor any director, officer, agent,
employee or other person associated with or acting on behalf of the
Company or any of its subsidiaries, has used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or
employee from corporate funds or violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; except as such
that would not have a Material Adverse Effect.
(z) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes,
medical wastes, hazardous wastes or hazardous substances by the
Company or any of its subsidiaries (or, to the knowledge of the
Company, any of their predecessors in interest) at, upon or from any
of the property now or previously owned or leased by the Company or
its subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or
remedial action which would not have, or would not be reasonably
likely to have, singularly or in the aggregate with all such
violations and remedial actions, a Material Adverse Effect; there has
been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to
or caused by the Company or any of its subsidiaries or with respect to
which the Company has knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not
have or would not be reasonably likely to have, singularly or in the
aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a Material Adverse Effect;
and the terms "hazardous wastes," "toxic wastes," "hazardous
substances" and "medical wastes"
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shall have the meanings specified in any applicable local, state,
federal and foreign laws or regulations with respect to environmental
protection.
(aa) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the United States
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
(bb) The Company has not taken, directly or indirectly, any action
designed to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company in connection
with this transaction.
(cc) The Stock is of a class of equity securities in which there
is a "bona fide independent market" within the meaning of Section
(b)(3) of National Association of Securities Dealers ("NASD") Rule
2720.
2. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 14,000,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Stock shall be
rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters options to
purchase, from time to time, in whole or in part, up to an aggregate of
2,100,000 additional shares of Option Stock. Such options are granted for the
purpose of covering over-allotments in the sale of Firm Stock and are
exercisable as provided in Section 4 hereof. Shares of Option Stock shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts. The price of both the Firm Stock and any Option Stock shall be $54.90
per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), as the case may be,
except upon payment for all the Stock to be purchased on such Delivery Date as
provided herein.
3. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus.
4. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the office of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M., New York City time, on the fourth full
business day following the
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date of this Agreement or at such other date or place as shall be determined by
agreement between the Representatives and the Company. This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the Company shall deliver or cause to be delivered certificates representing the
Firm Stock to the Representatives for the account of each Underwriter against
payment to or upon the order of the Company of the purchase price by wire
transfer in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Firm Stock shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Stock, the Company shall make the
certificates representing the Firm Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.
The option granted in Section 2 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "Second Delivery Date" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "Delivery
Date."
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on such Second Delivery
Date. On such Second Delivery Date, the Company shall deliver or cause to be
delivered the certificates representing the Option Stock to the Representatives
for the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Option Stock shall be registered in
such names and in such denominations as the Representatives shall request in the
aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Company shall make the
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to such Second Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than Commission's close of business
on the second business day following the execution and
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delivery of this Agreement or, if applicable, such earlier time as may
be required by Rule 430A(a)(3) under the Securities Act; to make no
further amendment or any supplement to the Registration Statement or
to the Prospectus prior to the last Delivery Date except as permitted
herein; to advise the Representatives, promptly (i) after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and (ii) if the
Company is required to file a Rule 462(b) Registration Statement after
the effectiveness of this Agreement, when the Rule 462(b) Registration
Statement has become effective and, in the case of each of (i) and
(ii), to furnish the Representatives with copies thereof; to file
promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering
or sale of the Stock; to advise the Representatives, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its reasonable best efforts to obtain
its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a conformed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request:
(i) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus and (ii) any document incorporated by
reference in the Prospectus (excluding exhibits thereto); and, if the
delivery of a prospectus is required at any time after the Effective
Time in connection with the offering or sale of the Stock or any other
securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Securities
Act or the Exchange Act, to notify the Representatives and, upon their
request, to file such document and to prepare and furnish (without
charge for the 9 month period following the First Delivery Date) to
each Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
or supplemented Prospectus which will correct such statement or
omission or effect such compliance;
11
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus, any document
incorporated by reference in the Prospectus or any Prospectus pursuant
to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives and counsel for the Underwriters and not to file
any such document to which the Representatives shall reasonably object
after having been given reasonable notice of the proposed filing
thereof;
(f) As soon as practicable after the Effective Date, (it being
understood that the Company shall have until at least 410 days after
the end of the Company's current fiscal quarter) to make generally
available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158);
(g) To use its reasonable efforts to take such action as the
Representatives may reasonably request from time to time to qualify
the Stock for offering and sale under the securities laws of such
jurisdictions as the Representatives may request and to comply with
such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions in the United States for as long as may
be necessary to complete the sale of the Stock; provided, however,
that in connection therewith, the Company shall not be required to
qualify as a foreign corporation or otherwise subject itself to
taxation in any jurisdiction in which it is not otherwise so qualified
or subject;
(h) For a period of 90 days from the date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common
Stock, or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether
any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of Xxxxxx
Brothers Inc. except for (A) the sale of the Firm Stock and the Option
Stock to the Underwriters, (B) the issuance by the Company of options
under any of its currently effective stock option or incentive plans
or of shares of Common Stock upon the exercise of a currently
outstanding option, warrant or right of the conversion of a security
outstanding on the date of the Prospectus, (C) the issuance by the
Company of shares of Common Stock to its employees or directors or as
dividends on its Common Stock or (D) the issuance by the Company of
Common Stock as consideration for the purchase of any business or
assets; and to cause Messrs. Xxxxx X. Xxxxx and Xxxxxx X. XxXxxxx to
furnish to the Representatives, prior to the date of the Prospectus, a
letter or letters, in form and substance satisfactory to counsel for
the
12
Underwriters, pursuant to which each such person shall agree not to,
directly or indirectly, (1) offer for sale, sell, or otherwise dispose
of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock (including, without
limitation, shares of Common Stock that may be deemed to be
beneficially owned by Xxxxx X. Xxxxx or Xxxxxx X. XxXxxxx, as the case
may be, in accordance with the Rules and Regulations of the Commission
and shares of Common Stock that may be issued upon exercise of any
option or warrant) or securities convertible into or exchangeable or
exercisable for Common Stock owned by Xxxxx X. Xxxxx or Xxxxxx X.
XxXxxxx on the date hereof or on the date of the completion of the
offering of Common Stock or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock
or other securities, in cash or otherwise, in each case for a period
of 90 days from the date of the Prospectus, except for transactions
with any person other than the Company and its subsidiaries relating
to shares of Common Stock or other securities convertible into or
exchangeable or exercisable for Common Stock acquired in open market
transactions after the completion of the offering of Common Stock
described in the Prospectus, and except for the sale by Xxxxx X. Xxxxx
of up to 500,000 shares of Common Stock or the sale by Xxxxxx X.
XxXxxxx of up to 500,000 shares of Common Stock, at any time and from
time to time beginning on the date of the Prospectus, without the
prior written consent of Xxxxxx Brothers Inc.;
(i) Prior to the Closing Date, to apply for the listing of the
Stock on the New York Stock Exchange and to use its best efforts to
complete that listing, subject only to official notice of issuance,
prior to the First Delivery Date;
(j) To apply the net proceeds from the sale of the Stock being
sold by the Company as set forth under "Use of Proceeds" in the
Prospectus;
(k) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment
company" within the meaning of such term under the United States
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder; and
(l) If the Registration Statement at the time of the effectiveness
of this Agreement does not cover all of the Stock, to file a Rule
462(b) Registration Statement with the Commission registering the
Stock not so covered in compliance with Rule 462(b) by 10:00 A.M., New
York City time, on the date following this Agreement and to pay to the
Commission the filing fee for such Rule 462(b) Registration Statement
at the time of the filing thereof or to give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the
Securities Act.
6. Expenses. The Company agrees to pay: (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the
13
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus or any document incorporated by reference therein, all as provided in
this Agreement; (d) the filing fees incident to securing any required review by
the National Association of Securities Dealers, Inc. of the terms of sale of the
Stock; (e) any applicable listing or other fees; (f) the fees and expenses of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 5(g) and of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of counsel to the Underwriters);
and (g) all other costs and expenses incident to the performance of the
obligations of the Company; provided that (x) the Company and the Underwriters
will bear their own "road show" expenses and (y) the Company on the one hand,
and the Underwriters on the other hand, will each bear one half of the cost of
the charter aircraft used in connection with the "road show" relating to the
offering of Common Stock described in the Prospectus.
7. Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied
with; and any 462(b) Registration Statement required by this Agreement
to be filed shall have been so filed and become effective.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of any fact which is material or omits to
state any fact which is material and is required to be stated therein
or is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Stock, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all material respects to counsel
for the Underwriters, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request
to enable them to pass upon such matters.
14
(d) Xxxxxxx Xxxxxxx & Xxxxxxxx shall have furnished to the
Representatives its written opinion, as counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in the
form attached hereto as Exhibit A.
(e) Xxxxxxxxxxx X. Xxxxxxx, General Counsel of the Company, shall
have furnished to the Representatives his written opinion, as General
Counsel to the Company, addressed to the Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) Other than as set forth in the Prospectus or the
documents incorporated therein by reference, there are no
preemptive or other rights to subscribe for or to purchase, nor
any restriction upon the voting or transfer of, any shares of the
Stock pursuant to the Company's charter or by-laws or any
agreement or other instrument known to such counsel;
(ii) To such counsel's knowledge, the Company and each of its
subsidiaries have good and marketable title to all property (real
and personal) described in the Prospectus or the documents
incorporated therein by reference as being owned by them, free
and clear of all liens, claims, security interests or other
encumbrances except such as are described in the Prospectus or
the documents incorporated therein by reference or, to the extent
that any such liens, claims, security interests or other
encumbrances would not have a Material Adverse Effect
(individually or in the aggregate) and all the material property
described in the Prospectus or the documents incorporated therein
by reference as being held under lease by the Company and its
subsidiaries is held by them under valid, subsisting and
enforceable leases, with only such exceptions as would not have a
Material Adverse Effect (individually or in the aggregate);
(iii) To such counsel's knowledge and except as otherwise
disclosed in the Prospectus or the documents incorporated therein
by reference, there are no legal or governmental proceedings
pending or threatened, against the Company or any of its
subsidiaries or to which the Company or any of its subsidiaries
is a party or of which any property or assets of the Company or
any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, are
reasonably likely to cause a Material Adverse Effect;
(iv) To such counsel's knowledge and except as otherwise
disclosed in the Prospectus or in the documents incorporated
therein by reference there are no contracts, agreements or
understandings between the Company and any person granting such
person the right to require the Company to include such person's
securities in the securities registered pursuant to the
Registration Statement; and
(v) None of the issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the compliance
by the Company and the Significant Subsidiary with all of the
provisions of this Agreement and the consummation of the
transactions contemplated hereby requires any consent, approval,
authorization or other order of, or registration or filing with,
any federal
15
court, federal regulatory body, federal administrative agency or
other federal governmental official having authority over
government procurement matters (provided, that the opinion in
this paragraph (v) may be delivered by other counsel reasonably
satisfactory to the Representatives).
(f) The Representatives shall have received from Xxxxxx & Xxxxxxx,
counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(g) At the time of execution of this Agreement, the
Representatives shall have received from PricewaterhouseCoopers LLP a
letter, in form and substance satisfactory to the Representatives,
addressed to the Underwriters and the Company dated the date hereof
(i) confirming that they are independent certified public accountants
within the meaning of the Securities Act and the applicable rules and
regulations thereunder adopted by the Commission and (ii) stating, as
of the date hereof (or, with respect to matters involving changes or
developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not
more than five days prior to the date hereof), the conclusions and
findings of PricewaterhouseCoopers LLP with respect to the financial
information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(h) With respect to the letter referred to in the preceding
paragraph and delivered to the Representatives concurrently with the
execution of this Agreement (the "initial letter"),
PricewaterhouseCoopers LLP shall have furnished to the Representatives
a letter (the "bring-down letter"), in form and substance satisfactory
to the Representatives, addressed to the Underwriters and the Company
dated such Delivery Date (i) confirming that they are independent
certified public accountants within the meaning of the Securities Act
and the applicable rules and regulations thereunder adopted by the
Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the
date of the bring-down letter), the conclusions and findings of
PricewaterhouseCoopers LLP with respect to the financial information
and other matters covered by the initial letter and (iii) confirming
in all material respects the conclusions and findings set forth in the
initial letter.
(i) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date and delivered on behalf of the
Company, of its Chairman of the Board, its President or a Vice
President and its chief financial officer stating, in form and
substance satisfactory to the Representatives that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of the date given
and as of such Delivery Date;
16
and the Company has complied with all its agreements contained
herein; and the conditions set forth in Sections 7(a) and 7(m)
have been fulfilled; and
(ii) Such officers have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the
Effective Date, and as of the Delivery Date, the Registration
Statement and Prospectus did not include any untrue statement of
any material fact and did not 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, and (B) since the Effective Date no event
has occurred which should have been set forth in a supplement or
amendment to the Registration Statement or the Prospectus.
(j) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus or (ii)
since such date there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or
any change, or any development involving a prospective change, in or
affecting the business, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus or in the documents incorporated therein by reference, the
effect of which, in any such case described in clause (i) or (ii), is,
in the judgment of the Representatives, so material and adverse as to
make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Company's debt securities by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities.
(l) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, the American
Stock Exchange, the NASDAQ National Market or the over-the-counter
market, or trading in any securities of the Company on any exchange or
in the over-the-counter market shall have been suspended or the
settlement of such trading generally shall have been materially
disrupted or minimum prices shall have been established on any such
exchange or market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction; (ii) a
banking moratorium shall have been declared by Federal or state
authorities; (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of
a national emergency or war by the United States; or (iv) there shall
have occurred such a material
17
adverse change in general economic, political or financial conditions,
including without limitation as a result of terrorist activities after
the date hereof, or the effect of international conditions on the
financial markets in the United States shall be such, as to make it in
the case of (iii) or (iv), in the sole judgment of a majority in
interest of the several Underwriters, impracticable or inadvisable to
proceed with the public offering or delivery of the Stock being
delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(m) The New York Stock Exchange shall have approved the Stock for
listing, subject only to official notice of issuance and evidence of
satisfactory distribution.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to counsel
for the Underwriters.
8. Indemnification and Contribution.
(a) The Company and the Significant Subsidiary shall jointly and
severally indemnify and hold harmless each Underwriter, its officers
and employees and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Stock), to
which that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or
supplement thereto, (ii) the omission or alleged omission to state in
any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, or in any Blue
Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any
act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the
Stock or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or (ii)
above (provided that the Company and the Significant Subsidiary shall
not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly
from any such acts or failures to act undertaken or omitted to be
taken by such Underwriter through its gross negligence or willful
misconduct), and shall reimburse each Underwriter and each such
officer, employee or controlling person promptly upon demand for any
legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company and the Significant
Subsidiary shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in
18
any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any such amendment or supplement, in reliance upon
and in conformity with written information concerning such Underwriter
furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein, which
information consists solely of the information specified in Section
8(e); provided further, that the indemnification contained in this
paragraph (a) with respect to the Preliminary Prospectus shall not
inure to the benefit of any Underwriter (or to the benefit of any
officers or employees of any Underwriter or of any person controlling
such Underwriter) on account of any such loss, claim, damage,
liability or action arising from the sale of Stock by such Underwriter
to any person if the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in the
Preliminary Prospectus was corrected in the Prospectus and the
Underwriter sold Stock to that person without sending or giving at or
prior to the written confirmation of such sale, a copy of the
Prospectus (as then amended or supplemented) if the Company has
previously furnished sufficient copies thereof to the Underwriter on a
timely basis to permit such sending or giving. The foregoing indemnity
agreement is in addition to any liability which the Company or the
Significant Subsidiary may otherwise have to any Underwriter or to any
officer, employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company, the officers and employees of the
Company, each of the directors of the Company, and each person, if
any, who controls the Company within the meaning of the Securities
Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any
such director of the Company, officer of the Company or controlling
person of the Company may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or (B) in any Blue Sky Application or
(ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information concerning such Underwriter furnished to the
Company through the Representatives by or on behalf of that
Underwriter specifically for inclusion therein, and shall reimburse
the Company and any such director of the Company, officer of the
Company or controlling person of the Company for any legal or other
expenses reasonably incurred by the Company or any such director of
the Company, officer of the Company or controlling person of the
Company in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as
such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to
the Company or any such director of the Company, officer of the
Company, employee of the Company, or controlling person of the
Company.
19
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action,
the indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 8 except to the extent it has been materially prejudiced
by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel
reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 8 for
any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, any indemnified party shall
have the right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of the indemnified party unless (i)
the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have
been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to
those available to the indemnifying party and in the reasonable
judgment of such counsel, it is advisable for such indemnified party
to employ separate counsel or (iii) the indemnifying party has failed
to assume the defense of such action and employ counsel reasonably
satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not, in connection with any one
such action or separate but substantially similar or related actions
in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to one local
counsel) at any time for all such indemnified parties, which firm
shall be designated in writing by Xxxxxx Brothers Inc., if the
indemnified parties under this Section 8 consist of any Underwriters
or any of their respective officers, employees or controlling persons,
or by the Company, if the indemnified parties under this Section 8
consist of the Company or any of the Company's directors, officers,
employees or controlling persons. No indemnifying party shall (i)
without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or
not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or
(ii) be liable for any settlement of any such action effected without
its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the
20
indemnifying party or if there be a final judgment of the plaintiff in
any such action, the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss or liability
by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred
to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company or the Significant Subsidiary on the one hand
and the Underwriters on the other from the offering of the Stock or
(ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also
the relative fault of the Company or the Significant Subsidiary, on
the one hand and the Underwriters on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the
Company or the Significant Subsidiary, on the one hand and the
Underwriters on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the Stock purchased under this Agreement (before deducting
expenses) received by the Company or the Significant Subsidiary, on
the one hand, and the total underwriting discounts and commissions
received by the Underwriters with respect to the shares of the Stock
purchased under this Agreement, on the other hand, bear to the total
gross proceeds from the offering of the shares of the Stock under this
Agreement, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company, the Significant Subsidiary or the
Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such
statement or omission. For purposes of the preceding two sentences,
the net proceeds deemed to be received by the Company shall be deemed
to be also for the benefit of the Significant Subsidiary and
information supplied by the Company shall also be deemed to have been
supplied by the Significant Subsidiary. The Company, the Significant
Subsidiary and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8 were to be
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability,
or action in respect thereof, referred to above in this Section 8
shall be deemed to include, for purposes of this Section 8(d), any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 8(d), no
Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Stock underwritten by
it and distributed to the public was offered to the public exceeds the
amount of any damages which such Underwriter
21
has otherwise paid or become liable to pay by reason of any 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.
The Underwriters' obligations to contribute as provided in this
Section 8(d) are several in proportion to their respective
underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Company and the
Significant Subsidiary acknowledge that the statements with respect to
the public offering of the Stock by the Underwriters in the fourth,
seventh, eighth, fourteenth, fifteenth and nineteenth paragraphs and
the second and third sentences of the sixteenth paragraph under the
caption "Underwriting" in the Prospectus are correct and constitute
the only information concerning such Underwriters furnished in writing
to the Company by or on behalf of the Underwriters specifically for
inclusion in the Registration Statement and the Prospectus.
9. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 2. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Stock to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the Representatives
do not elect to purchase the shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date, this Agreement
(or, with respect to such Delivery Date, the obligation of the Underwriters to
purchase, and of the Company to sell, the Option Stock) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
that the Company and the Significant Subsidiary will continue to be liable for
the payment of expenses to the extent set forth in Sections 6 and 11. As used in
this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases Firm Stock which a
defaulting Underwriter agreed but failed to purchase.
22
Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Stock of a defaulting
or withdrawing Underwriter, either the Representatives or the Company may
postpone the Delivery Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
prior to delivery of and payment for the Firm Stock if, prior to that time, any
of the events described in Sections 7(j), 7(k) or 7(l), shall have occurred or
if the Underwriters shall decline to purchase the Stock for any reason permitted
under this Agreement.
11. Reimbursement of Underwriters' Expenses. If (a) the Company shall
fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company and the Significant Subsidiary will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Stock, and upon demand the Company
and the Significant Subsidiary shall pay the full amount thereof to the
Representative(s). If this Agreement is terminated pursuant to Section 9 by
reason of the default of one or more Underwriters, the Company and the
Significant Subsidiary shall not be obligated to reimburse any defaulting
Underwriter on account of those expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department
(Fax: (000) 000-0000), with a copy, in the case of any notice pursuant
to Section 8(c), to the Director of Litigation, Office of the General
Counsel, Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000;
and
(b) if to the Company or to the Significant Subsidiary, shall be
delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Registration Statement,
Attention: Xxxxxxxxxxx X. Xxxxxxx (Fax: 000-000-0000);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of the
Representatives.
23
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Significant Subsidiary and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company contained in this Agreement shall also be deemed to be for the
benefit of the officers and employees of the Underwriters and the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 8(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing contained in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Significant Subsidiary and the Underwriters
contained in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Stock 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 of them or any person controlling any of them.
15. Definition of the Terms "Business Day" and "Subsidiary." For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the
Securities Act Rules and Regulations.
16. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Signature pages follow]
24
If the foregoing correctly sets forth the agreement among the Company,
the Significant Subsidiary and the Underwriters, please indicate your acceptance
in the space provided for that purpose below.
Very truly yours,
L-3 COMMUNICATIONS HOLDINGS, INC.,
the Company
By:
------------------------------
Name:
Title:
L-3 COMMUNICATIONS CORPORATION,
the Significant Subsidiary
By:
------------------------------
Name:
Title:
Accepted:
XXXXXX BROTHERS INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, XXXXXXX & CO. INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XX XXXXX SECURITIES CORPORATION
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By: XXXXXX BROTHERS INC.
By:
-------------------------------------
Authorized Representative
SCHEDULE 1
NUMBER OF
UNDERWRITERS SHARES
------------ ------
Xxxxxx Brothers Inc................................ 4,200,000
Credit Suisse First Boston Corporation 2,520,000
Bear, Xxxxxxx & Co. Inc. .......................... 2,520,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx 1,540,000
Incorporated...................................
XX Xxxxx Securities Corporation.................... 1,540,000
Xxxxxxx, Xxxxx & Co. .............................. 560,000
Xxxxxxx Xxxxx Barney Inc. ......................... 560,000
Wachovia Securities, Inc. ......................... 560,000
Total.......................................... 14,000,000
==========
FORM OF LOCK-UP LETTER AGREEMENT
XXXXXX BROTHERS INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, XXXXXXX & CO. INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XX XXXXX SECURITIES CORPORATION
As Representatives of the
several Underwriters
c/x XXXXXX BROTHERS INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands that you and certain other firms propose to
enter into an underwriting agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (collectively, the "Underwriters")
of shares (the "Shares") of Common Stock, par value $.01 per share (the "Common
Stock"), of L-3 Communications Holdings, Inc. (the "Company") and that the
Underwriters propose to reoffer the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc., the undersigned will not, directly or indirectly, (1) offer for
sale, sell, or otherwise dispose of (or enter into any transaction or device
that is designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock (including,
without limitation, shares of Common Stock that may be deemed to be beneficially
owned by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and shares of Common Stock that may be issued
upon exercise of any option or warrant) or securities convertible into or
exchangeable or exercisable for Common Stock owned by the undersigned on the
date of execution of this Lock-Up Letter Agreement or on the date of the
completion of the Offering, or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in each case for a
period of 90 days after the date of the final Prospectus relating to the
Offering, except in each case for transactions with any person other than the
Company relating to shares of Common Stock or other securities convertible into
or exchangeable or exercisable for Common Stock acquired in open market
transactions after the completion of the Offering, and except for the sale by
Xx. Xxxxx of up to an aggregate of 500,000 shares of Common Stock or the sale by
Xx. XxXxxxx of up to an aggregate of 500,000 shares of Common Stock, in each
case at any time and from time to time beginning on date of the Prospectus (as
defined in the Underwriting Agreement).
In furtherance of the foregoing, the Company and EquiServe Trust
Company, N.A., as the transfer agent (the "Transfer Agent") are hereby
authorized to decline to make any transfer of securities if such transfer would
constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, the undersigned will be released from
any obligations under this Lock-Up Letter Agreement. In addition, this Agreement
shall lapse and become null and void if the Offering shall not have occurred on
or before July 15, 2002.
The Underwriters and/or the Company will immediately notify the
undersigned if any Lock-Up Letter Agreement is modified, amended, waived or
terminated in a manner so as to impose less stringent restrictions upon the
person to which such Lock-Up Letter Agreement applies as well as the nature of
any such modification, amendment, waiver or termination and this Lock-Up Letter
Agreement shall be deemed to have been modified, amended, waived or terminated
in the same manner as of the same effective date and time.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
By:
----------------------------------
Name:
Title:
Dated:
----------------------
EXHIBIT A
FORM OF XXXXXXX XXXXXXX & XXXXXXXX OPINION
June 28, 2002
XXXXXX BROTHERS INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, XXXXXXX & CO. INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XX XXXXX SECURITIES CORPORATION
and the other Underwriters named in the
Underwriting Agreement referred to below
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel to L-3 Communications Holdings, Inc.,
a Delaware corporation (the "Company"), in connection with the purchase by you
of an aggregate of 14,000,000 shares of Common Stock, par value $.01 per share
(the "Shares"), of the Company from the Company pursuant to the Underwriting
Agreement dated June 24, 2002 among the Company, L-3 Communications Corporation,
a Delaware corporation ("L-3 Communications"), Xxxxxx Brothers Inc. and the
other several underwriters named therein (the "Underwriting Agreement").
Capitalized terms used herein and not otherwise defined shall have the meaning
assigned to them in the Underwriting Agreement.
We have examined the Registration Statement on Form S-3 (File
No. 333-84826) filed by the Company, L-3 Communications and the additional
registrants named therein under the Securities Act of 1933, as amended (the
"Securities Act"), as it became effective under the Securities Act (the
"Registration Statement") and the Company's prospectus dated June 20, 2002, as
supplemented by the prospectus supplement dated June 24, 2002 (the
"Prospectus"), filed by the Company pursuant to Rule 424(b) of the rules and
regulations of the Securities and Exchange Commission (the "Commission") under
the Securities Act, which pursuant to Form S-3 incorporates by reference the
Annual Report on Form 10-K of the Company and L-3 Communications for the fiscal
year ended December 31, 2001, as amended by the Company's and L-3
Communications' Annual Report on a Form 10-K/A-1 filed on June 19, 2002, the
Current Reports on Form 8-K of the Company and L-3 Communications filed on March
22, 2002, April 24, 2002 and June 19, 2002 and the Quarterly Report on Form 10-Q
of the Company and L-3 Communications for the quarter ended March 31, 2002
(each, an "Exchange Act Document" and collectively, the "Exchange Act
Documents"), each as filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). We have also examined a specimen
certificate representing the Common Stock of the Company. In addition, we have
examined, and have relied as to matters of fact upon, the documents delivered to
you at the closing and upon originals or duplicates or certified or conformed
copies of such corporate records, agreements, documents and other instruments
and such certificates or comparable documents or oral statements of public
officials and of officers and representatives of the Company and L-3
Communications, and have made such other and further investigations, as we have
deemed relevant and necessary as a basis for the opinions hereinafter set forth.
Our opinion that the Registration Statement has been declared effective under
the Securities Act is based on oral advice from the staff of the Commission.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as duplicates or certified or conformed copies and
the authenticity of the originals of such latter documents.
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion that:
1. Each of the Company, L-3 Communications and the Company's
subsidiaries listed on Schedule A hereto (each, a "Subsidiary" and
collectively, the "Subsidiaries") (other than L-3 Communications
Integrated Systems LP (the "LP")) has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware, and has all corporate power and authority
necessary to conduct its respective businesses as described in the
Registration Statement and the Prospectus.
2. The LP has been duly formed and is validly existing as a
limited partnership in good standing under the laws of the State of
Delaware, and has all limited partnership power and authority necessary
to conduct its business as described in the Registration Statement and
the Prospectus.
3. All of the outstanding shares of Common Stock of the
Company have been duly authorized and are validly issued, fully paid
and non-assessable; all of the Shares to be sold by the Company have
been duly authorized and, upon payment and delivery in accordance with
the Underwriting Agreement, will be validly issued, fully paid and
non-assessable; all of the issued shares of capital stock of L-3
Communications and each Subsidiary (other than the LP) have been duly
and validly authorized and issued, are fully paid and non-assessable
(except for directors' qualifying shares); and, based solely on an
examination of each such Subsidiary's stock ledger and minute books,
all such shares are held of record by the Company or one of its
subsidiaries.
4. The Registration Statement has become effective under the
Securities Act and the Prospectus was filed on June 25, 2002 pursuant
to Rule 424(b) of the rules and regulations of the Commission under the
Securities Act, and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued or
proceeding for that purpose has been instituted or threatened by the
Commission.
5. The statements made in the Prospectus under the captions
"Risks Related to Our Common Stock - Delaware law and the charter
documents of L-3 Holdings may impede or discourage a takeover, which
could cause the market price of its shares to
decline," and "Description of Capital Stock", insofar as they describe
charter documents, contracts, statutes, rules and regulations and
other legal matters, constitute an accurate summary thereof in all
material respects.
6. The statements made in the Prospectus under the caption
"Certain U.S. Federal Tax Consequences to Non-U.S. Holders", insofar as
they purport to constitute summaries of matters of United States
federal tax law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters described therein
in all material respects.
7. To our knowledge, there are no contracts or documents of a
character required by the Securities Act or the rules and regulations
thereunder to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
which are not described or filed as required by the Securities Act or
the rules and regulations thereunder.
8. The Underwriting Agreement has been duly authorized,
executed and delivered by the Company and L-3 Communications.
9. The issue and sale of the Shares being delivered by the
Company and the compliance by the Company and L-3 Communications, as
applicable, with all of the provisions of the Underwriting Agreement
will not breach, or result in a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument filed as
an exhibit to the Registration Statement nor will such actions violate
the Certificate of Incorporation or By-Laws of the Company, L-3
Communications or the Subsidiaries (other than the LP) or, in the case
of the LP, the Limited Partnership Agreement dated February 22, 2002,
between L-3 Communications AIS GP Corporation and L-3 Communications
Investments, Inc., or any federal or New York statute or the Delaware
General Corporation Law or the Delaware Revised Uniform Limited
Partnership Act or any rule or regulation that has been issued pursuant
to any federal or New York statute or the Delaware General Corporation
Law or the Delaware Revised Uniform Limited Partnership Act or any
order known to us issued pursuant to any federal or New York statute or
the Delaware General Corporation Law or the Delaware Revised Uniform
Limited Partnership Act by any court or governmental agency or body or
court having jurisdiction over the Company or any of its subsidiaries
or any of their properties; and no consent, approval, authorization,
order, registration or qualification of or with any federal or New York
governmental agency or body or any Delaware governmental agency or body
acting pursuant to the Delaware General Corporation Law or the Delaware
Revised Uniform Limited Partnership Act or, to our knowledge, any
federal or New York court or any Delaware court acting pursuant to the
Delaware General Corporation Law or the Delaware Revised Uniform
Limited Partnership Act is required for the issue and sale of the
Shares by the Company, except for the registration under the Securities
Act of the Shares, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters. The opinions set forth
in this paragraph are based upon our consideration of only those
statutes, rules and regulations, which, in our experience, are normally
applicable to securities underwriting transactions.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Prospectus or the Exchange Act Documents and take no responsibility
therefor, except as and to the extent set forth in paragraphs (5) and (6) above.
In the course of the preparation by the Company of the Registration Statement
and the Prospectus (excluding the Exchange Act Documents), we participated in
conferences with certain officers and employees of the Company, with
representatives of PricewaterhouseCoopers LLP and with counsel to the
Underwriters. We did not prepare the Exchange Act Documents. Based upon our
examination of the Registration Statement, the Prospectus and the Exchange Act
Documents, our investigations made in connection with the preparation of the
Registration Statement and the Prospectus (excluding the Exchange Act Documents)
and our participation in the conferences referred to above, (i) we are of the
opinion that the Registration Statement, as of its effective date, and the
Prospectus, as of June 24, 2002, complied as to form when filed in all material
respects with the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder and that the Exchange Act Documents
complied as to form when filed in all material respects with the requirements of
the Exchange Act and the applicable rules and regulations of the Commission
thereunder, except that we express no opinion with respect to the financial
statements or other financial data contained or incorporated by reference in the
Registration Statement, the Prospectus or the Exchange Act Documents, and (ii)
we have no reason to believe that the Registration Statement, as of its
effective date (including the Exchange Act Documents on file with the Commission
on such effective date), contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading or that the Prospectus
(including the Exchange Act Documents) as of June 24, 2002 and as of the date
hereof, contained as of such date or contains any untrue statement of a material
fact or omitted as of such date or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that in each case we express no
belief with respect to the financial statements or other financial data
contained or incorporated by reference in the Registration Statement, the
Prospectus or the Exchange Act Documents.
We are members of the Bar of the State of New York and we do
not express any opinion herein concerning any law other than the law of the
State of New York, the federal law of the United States, Delaware General
Corporation Law and the Delaware Revised Uniform Limited Partnership Act.
This opinion letter is rendered to you in connection with the
above described transactions. This opinion letter may not be relied upon by you
for any other purpose, or relied upon by, or furnished to, any other person,
firm or corporation without our prior written consent.
Very truly yours,
XXXXXXX XXXXXXX & XXXXXXXX
SCHEDULE A
Xxxxxxxx Inc., a Delaware corporation
Hygienetics Environmental Services, Inc., a Delaware corporation
KDI Precision Products, Inc., a Delaware Corporation
L-3 Communications AIS GP Corporation, a Delaware corporation
L-3 Communications Aydin Corporation, a Delaware corporation
L-3 Communications ESSCO, Inc., a Delaware corporation
L-3 Communications ILEX Systems, Inc., a Delaware corporation
L-3 Communications Investments, Inc., a Delaware corporation
L-3 Communications SPD Technologies, Inc., a Delaware corporation
L-3 Communications Integrated Systems LP, a Delaware limited partnership
MPRI, Inc., a Delaware corporation
Pac Ord Inc., a Delaware corporation
Power Paragon, Inc., a Delaware corporation
SPD Electrical Systems, Inc., a Delaware corporation
SPD Holdings, Inc., a Delaware corporation
SPD Switchgear Inc., a Delaware corporation
