EXHIBIT 1.1
EXECUTION COPY
L-3 COMMUNICATIONS CORPORATION
6-1/8 % SENIOR SUBORDINATED NOTES DUE 2013
PURCHASE AGREEMENT
May 14, 2003
XXXXXX BROTHERS INC.
XXXXXX XXXXXXX & CO. INCORPORATED
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON LLC
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
L-3 Communications Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to you (the "Initial Purchasers") $400 million in
aggregate principal amount of its 6-1/8% Senior Subordinated Notes due 2013 (the
"Series A Notes") guaranteed (the "Series A Guarantees;" and, together with the
Series A Notes, the "Series A Notes and Guarantees") by Broadcast Sports Inc., a
Delaware corporation, Xxxxxxxx Aerospace Component Overhaul & Repair, Inc., a
Delaware corporation, Xxxxxxxx Avionics Systems, Inc., a Delaware corporation,
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 Integrated Systems L.P., a Delaware
limited partnership, L-3 Communications Investments, Inc., a Delaware
corporation, L-3 Communications Security and Detection Systems Corporation
Delaware, a Delaware corporation, L-3 Communications SPD Technologies, Inc., a
Delaware corporation, MPRI, Inc., a Delaware corporation, Pac Ord Inc., a
Delaware corporation, Power Paragon, Inc., a Delaware corporation, Ship
Analytics International, Inc., a Delaware corporation, SPD Electrical Systems,
Inc., a Delaware corporation, SPD Holdings, Inc., a Delaware corporation, SPD
Switchgear Inc., a Delaware corporation, Wescam Air Ops Inc., a Delaware
corporation, Wescam Air Ops LLC, a Delaware limited liability company, Wescam
Holdings (US) Inc., a Delaware corporation, and Wescam LLC, a Delaware limited
liability company (individually a "Delaware Guarantor" and collectively, the
"Delaware Guarantors") and AMI Instruments, Inc., an Oklahoma corporation,
Apcom, Inc., a Maryland corporation, Celerity Systems Incorporated, a California
corporation, EER Systems, Inc., a
Virginia corporation, Electrodynamics, Inc., an Arizona corporation, Xxxxxxxx
FlightSystems, Inc., an Ohio corporation, Interstate Electronics Corporation, a
California corporation, L-3 Communications Analytics Corporation, a California
corporation, L-3 Communications Atlantic Science and Technology Corporation, a
New Jersey corporation, X-0 Xxxxxxxxxxxxxx XXX Corporation, a Connecticut
corporation, L-3 Communications Security and Detection Systems Corporation
California, a California corporation, L-3 Communications Storm Control Systems,
Inc., a California corporation, L-3 Communications TMA Corporation, a Virginia
corporation, L-3 Communications Westwood Corporation, a Nevada corporation, MCTI
Acquisition Corporation, a Maryland corporation, Microdyne Communications
Technologies Incorporated, a Maryland corporation, Microdyne Corporation, a
Maryland corporation, Microdyne Outsourcing Incorporated, a Maryland
corporation, Ship Analytics, Inc., a Connecticut corporation, Ship Analytics
USA, Inc., a Connecticut corporation, Southern California Microwave, Inc., a
California corporation, SYColeman Corporation, a Florida corporation, Telos
Corporation, a California corporation, Troll Technology Corporation, a
California corporation, Wescam Incorporated, a Florida corporation, Wescam
Sonoma Inc., a California corporation and Wolf Coach, Inc., a Massachusetts
corporation (individually a "Non-Delaware Guarantor," collectively the
"Non-Delaware Guarantors" and, together with the Delaware Guarantors, the
"Guarantors"), pursuant to the terms of an Indenture (the "Indenture") among the
Company, the Guarantors and The Bank of New York, as trustee (the "Trustee"),
relating to the Series A Notes. Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Indenture.
The Series A Notes will be offered and sold to you pursuant to an
exemption from the registration requirements under the Securities Act of 1933,
as amended (the "Act"). The Company has prepared a final offering memorandum
(the "Offering Memorandum"), dated May 14, 2003, relating to the Company, the
Series A Notes and the Series A Guarantees. As described in the Offering
Memorandum, the Company will use the net proceeds from the offering of the
Series A Notes to redeem $180 million aggregate principal amount of its 8-1/2%
Senior Subordinated Notes due 2008 and for general corporate purposes, including
potential acquisitions.
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act, the
Series A Notes (and all securities issued in exchange therefor or in
substitution thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX
XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF
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L-3 COMMUNICATIONS CORPORATION THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF L-3
COMMUNICATIONS CORPORATION SO REQUESTS), (2) TO L-3 COMMUNICATIONS
CORPORATION OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
You have advised the Company that you will make offers (the "Exempt
Resales") of the Series A Notes purchased by you hereunder on the terms set
forth in the Offering Memorandum, as amended or supplemented, solely to (i)
persons whom you reasonably believe to be "qualified institutional buyers" as
defined in Rule 144A under the Securities Act ("QIBs"), (ii) Xxxxx X. Xxxxx, who
shall have represented to the Company and the Initial Purchasers that he is an
"Accredited Investor" referred to in Rule 501(a)(4), (5) or (6) under the Act
(the "Accredited Investor"), that he is purchasing the Series A Notes for
investment purposes only and with no present intention to resell the Series A
Notes and executed and returned to the Initial Purchasers a certificate in the
form of Exhibit C hereto and (iii) outside the United States to persons other
than U.S. Persons in offshore transactions meeting the requirements of Rule 904
of Regulation S ("Regulations S") under the Securities Act (such persons
specified in clauses (i), (ii) and (iii) being referred to herein as the
"Eligible Purchasers"). As used herein, the terms "offshore transaction,"
"United States" and "U.S. person" have the respective meanings given to them in
Regulation S. You will offer the Series A Notes to Eligible Purchasers initially
at a price equal to 100.0% of the principal amount thereof. Such price may be
changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated May 21, 2003 (the "Closing Date"),
in the form of Exhibit D hereto, for so long as such Series A Notes constitute
"Transfer Restricted Securities" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will agree to file with the Securities and Exchange Commission (the
"Commission") under the circumstances set forth therein, (i) a registration
statement under the Securities Act (the "Exchange Offer Registration Statement")
relating to the Company's 6-1/8%
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Senior Subordinated Notes due 2013 (the "Series B Notes" and, together with the
Series A Notes, the "Notes") and the guarantees thereof (the "Series B
Guarantees" and, together with the Series A Guarantees, the "Guarantees") to be
offered in exchange for the Series A Notes and Guarantees, (such offer to
exchange being referred to collectively as the "Registered Exchange Offer") and
(ii) a shelf registration statement pursuant to Rule 415 under the Securities
Act (the "Shelf Registration Statement") relating to the resale by certain
holders of the Series A Notes, and to use all commercially reasonable efforts to
cause such Registration Statements to be declared effective. This Agreement, the
Notes, the Guarantees (as defined herein), the Indenture and the Registration
Rights Agreement are hereinafter referred to collectively as the "Operative
Documents." This is to confirm the agreements concerning the purchase of the
Series A Notes from the Company by you.
1. Representations, Warranties and Agreements of the Company and the
Guarantors. The Company and the Guarantors, jointly and severally represent,
warrant and agree that:
(a) The Offering Memorandum with respect to the Series A Notes has been
prepared by the Company for use by the Initial Purchasers in connection with the
Exempt Resales. No order or decree preventing the use of the Offering
Memorandum, or any order asserting that the transactions contemplated by this
Agreement are subject to the registration requirements of the Securities Act has
been issued and no proceeding for that purpose has commenced or is pending or,
to the knowledge of the Company and the Guarantors, is contemplated.
(b) The Offering Memorandum as of its date and as of the Closing Date,
did not and will not contain an untrue statement of a material fact or omit to
state a material fact necessary, in order to make the statements, in light of
the circumstances under which they were made, not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the Offering Memorandum made in reliance upon and in conformity with information
relating to the Initial Purchasers furnished to the Company in writing by or on
behalf of the Initial Purchasers expressly for use therein.
(c) The market-related and customer-related data and estimates included
or incorporated by reference in the Offering Memorandum are based on or derived
from sources which the Company believes to be reliable and accurate.
(d) The Company and each of its subsidiaries (as defined in Section 14
hereof) have been duly organized and are validly existing as corporations,
limited partnerships or limited liability companies, 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
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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(e) 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
(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 PMM Costruzioni Electtroniche Centro Misure
Radioelettriche S.r.l., (vi) approximately 50% of the membership interests in
ITel Solutions, LLC, (vii) approximately 55% of the capital stock of
LogiMetrics, Inc., (viii) approximately 55% of the capital stock of Logimetrics
FSC, Inc., (ix) approximately 55% of the capital stock of mmTECH, Inc., (x)
approximately 50% of the capital stock of Wescam Asia Pte Ltd. and (xi) 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 or a subsidiary of the Company,
free and clear of all liens, encumbrances, equities or claims, other than (A)
liens, encumbrances, equities or claims described in the Offering Memorandum or
in documents incorporated therein by reference, (B) a pledge of such shares or
membership interests to secure the Senior Credit Facilities and (C) such other
liens, encumbrances, equities or claims as do not have a Material Adverse
Effect.
(f) The Company has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement, the Indenture, the
Notes, the Guarantees and the Registration Rights Agreement.
(g) This Agreement has been duly authorized, executed and delivered by
the Company and the Guarantors.
(h) The Registration Rights Agreement has been duly authorized by the
Company and each of the Guarantors, and when duly executed by the proper
officers of the Company and the Guarantors (assuming due execution and delivery
by the Initial Purchasers) and delivered by the Company and each Guarantor, will
constitute a valid and binding agreement of the Company and each Guarantor,
enforceable against the Company and each Guarantor in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) or an implied covenant of good faith and fair
dealing and except as rights to indemnity and contribution thereunder may be
limited by Federal or state securities laws or principles of public policy.
(i) The Indenture has been duly and validly authorized by the Company
and each of the Guarantors, and when duly executed by the proper officers of the
Company and each of the Guarantors (assuming due execution and delivery by the
Trustee) and delivered by the Company and each of the Guarantors, will
constitute a valid and binding agreement of the Company and each of the
Guarantors enforceable against the Company and each of the Guarantors in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) or an
implied covenant of good faith and fair dealing; no qualification of the
Indenture under the Trust Indenture Act of 1939, as amended (the "1939 Act") is
required in connection with the Exempt Resales.
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(j) The Series A Notes have been duly and validly authorized by the
Company and when duly executed by the Company in accordance with the terms of
the Indenture and, assuming due authentication of the Series A Notes by the
Trustee, upon delivery to the Initial Purchasers against payment therefor in
accordance with the terms hereof will constitute valid and binding obligations
of the Company entitled to the benefits of the Indenture and enforceable against
the Company in accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law) or
an implied covenant of good faith and fair dealing; and the Series A Notes, when
issued and delivered, will conform to the description thereof contained in the
Offering Memorandum in all material respects.
(k) The Series A Guarantees have been duly and validly authorized by
the Guarantors and when duly endorsed on the Series A Notes in accordance with
the terms of the Indenture and, assuming due authentication of the Series A
Notes by the Trustee, upon delivery to the Initial Purchasers against payment
therefor in accordance with the terms hereof will constitute valid and binding
obligations of each of the Guarantors entitled to the benefits of the Indenture
and enforceable against in accordance with their terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law) or
an implied covenant of good faith and fair dealing; and the Series A Guarantees,
when issued and delivered, will conform to the description thereof contained in
the Offering Memorandum in all material respects.
(l) The Series B Notes have been duly and validly authorized by the
Company and if and when duly issued and authenticated in accordance with the
terms of the Indenture and delivered in accordance with the Registered Exchange
Offer provided for in the Registration Rights Agreement, will constitute valid
and binding obligations of the Company entitled to the benefits of the
Indenture, enforceable against the Company in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) or an implied covenant of good faith and fair
dealing.
(m) The guarantees of the Series B Notes (the "Series B Guarantees"
and, together with the Series A Guarantees, the "Guarantees") have been duly and
validly authorized by the Guarantors and if and when duly endorsed on the Series
A Notes in accordance with the terms of the Indenture and delivered in
accordance with the Registered Exchange Offer provided for in the Registration
Rights Agreement, will constitute valid and binding obligations of each of the
Guarantors entitled to the benefits of the Indenture and enforceable against
each of the Guarantors in accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law) or
an implied covenant of good faith and fair dealing.
(n) The execution, delivery and performance of this Agreement and the
other Operative Documents by the Company and the Guarantors and the consummation
of the transactions contemplated hereby or thereby will not conflict with or
constitute a breach or violation
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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 breach, violation or default which, individually, or in the aggregate,
would not result in a Material Adverse Effect, nor will such actions result in
any violation of the 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 as may be required in connection with
the registration under the Securities Act of the Series B Notes and Series B
Guarantees in accordance with the Registration Rights Agreement, qualification
of the Indenture under the 1939 Act and compliance with the securities or Blue
Sky laws of various jurisdictions, 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
or any of the Operative Documents by the Company and the Guarantors, as
applicable, and the consummation of the transactions contemplated hereby and
thereby.
(o) Except as described in the Offering Memorandum or in the documents
incorporated therein by reference and except as provided by the Registration
Rights Agreement and except for agreements that are not inconsistent with the
terms of the Registration Rights Agreement and do not require the Company to
include any security with the securities registered pursuant to the Exchange
Offer Registration Statement or the Shelf Registration Statement, 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 Offering Memorandum)
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 Exchange Offer Registration Statement or the Shelf
Registration Statement; and all such rights to include such securities in the
securities being registered pursuant to the Exchange Offer Registration
Statement or the Shelf Registration Statement have been waived in a manner
consistent with the terms under which they were granted.
(p) Except as described in the Offering Memorandum or in the documents
incorporated therein by reference, the Company and the Guarantors have not sold
or issued any securities with terms that are substantially similar to the Notes
and the Guarantees during the six-month period preceding the date of the
Offering Memorandum, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act.
(q) 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 Offering Memorandum, 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 Offering Memorandum or in the documents
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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 Material Adverse Effect, otherwise than as described or contemplated
in the Offering Memorandum or in the documents incorporated therein by
reference.
(r) The historical financial statements, together with related notes,
set forth or incorporated by reference in the Offering Memorandum 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
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, in accordance with generally accepted accounting principles
consistently applied throughout such periods. The other financial and
statistical information and data included or incorporated by reference in the
Offering Memorandum 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.
(s) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company, whose report appears in the Offering Memorandum or is
incorporated by reference therein and who have delivered the initial letter
referred to in Section 7(f) hereof, are independent certified public accountants
as required by the Securities Act and the Exchange 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
Offering Memorandum.
(t) The Company and each of its subsidiaries have good and marketable
title to all property (real and personal) described in the Offering Memorandum
as being owned by them, free and clear of all liens, claims, security interests
or other encumbrances except such as are described in the Offering Memorandum
(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 Offering Memorandum 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).
(u) 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 Offering
Memorandum 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 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).
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(v) Except as described in the Offering Memorandum (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.
(w) There are no contracts or other documents which would be required
to be described in a prospectus contained in a registration statement on Form
S-3 by the Securities Act or by the rules and regulations thereunder which have
not been described in the Offering Memorandum or incorporated therein by
reference.
(x) 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 Offering Memorandum or in the documents incorporated therein by reference.
(y) 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.
(z) Except as disclosed in the Offering Memorandum 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 "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.
(aa) 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.
(bb) 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,
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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.
(cc) 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.
(dd) Except as disclosed in the Offering Memorandum or in the documents
incorporated therein by reference, 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" shall have
the meanings specified in any applicable local, state, federal and foreign laws
or regulations with respect to environmental protection.
(ee) Neither the Company nor any subsidiary is, and upon the sale of
the Series A Notes to be issued and sold thereby in accordance herewith and the
application of the net proceeds to the Company of such sale as described in the
Offering Memorandum under the caption "Use of Proceeds," will not be, 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.
(ff) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D ("Regulation D") under the Securities Act) of the Company has
directly, or through any agent (provided that no representation is made as to
the Initial Purchasers or any person acting on its behalf), (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or could be integrated with
the offering and sale of the Notes in a manner that would require the
registration of the Series A Notes under the
10
Securities Act or (ii) engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D, including, but not limited to,
advertisements, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising) in connection with the offering of the
Series A Notes.
(gg) Except as permitted by the Securities Act, the Company has not
distributed and, prior to the later to occur of the Closing Date and completion
of the distribution of the Series A Notes, will not distribute any offering
material in connection with the offering and sale of the Series A Notes other
than the Offering Memorandum.
(hh) When the Series A Notes are issued and delivered pursuant to this
Agreement, such Series A Notes will not be of the same class (within the meaning
of Rule 144A under the Securities Act) as securities of the Company that are
listed on a national securities exchange registered under Section 6 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or that are
quoted in a U.S. automated inter-dealer quotation system.
(ii) Assuming (i) that your representations and warranties in Section 2
are true, (ii) compliance by you with your covenants set forth in Section 2 and
(iii) that each of the Eligible Purchasers is a QIB or a person who is not a
"U.S. person" who acquires the Series A Notes outside the United States in an
"offshore transaction" (within the meaning of Rule 904 of Regulation S), the
purchase of the Series A Notes by you pursuant hereto and the resale of the
Series A Notes pursuant hereto pursuant to the Exempt Resales is exempt from the
registration requirements of the Securities Act.
(jj) None of the Company or any of its affiliates or any person acting
on its or their behalf has engaged or will engage in any directed selling
efforts within the meaning of Regulation S with respect to the Notes, and the
Company and its affiliates and all persons acting on its of their behalf have
complied with and will comply with the offering restrictions requirements of
Regulation S in connection with the offering of the Notes outside of the United
States. The sales of the Series A Notes pursuant to Regulation S are "offshore
transactions" and are not part of a plan or scheme to evade the registration
provision of the Securities Act. The Company makes no representation in this
paragraph (jj) with respect to the Initial Purchasers.
(kk) The Company is a "reporting issuer" as defined in Rule 902 under
the Securities Act.
(ll) The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-14 under the Exchange Act),
which (i) are designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to the Company's
principal executive officer and its principal financial officer by others within
those entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared; (ii) have been evaluated for
effectiveness as of a date within 90 days prior to the filing of the Company's
most recent annual or quarterly report filed with the Commission; and (iii) are
effective in all material respects to perform the functions for which they were
established.
11
(mm) Based on the evaluation of its disclosure controls and procedures,
the Company is not aware of (i) any significant deficiency in the design or
operation of internal controls which could adversely affect the Company's
ability to record, process, summarize and report financial data or any material
weaknesses in internal controls or (ii) any fraud, whether or not material, that
involves management or other employees who have a significant role in the
Company's internal controls.
(nn) Since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
2. Representations, Warranties and Agreements of the Initial
Purchasers. Each Initial Purchaser represents and warrants with respect to
itself that:
(a) Such Initial Purchaser is a QIB under the Securities Act (each, an
"Accredited Institution"), in either case with such knowledge and experience in
financial and business matters as are necessary in order to evaluate the merits
and risks of an investment in the Series A Notes.
(b) Such Initial Purchaser (i) is not acquiring the Series A Notes with
a view to any distribution thereof or with any present intention of offering or
selling any of the Series A Notes, in each case in a transaction that would
violate the Securities Act or the securities laws of any State of the United
States or any other applicable jurisdiction; (ii) in connection with the Exempt
Resales, will solicit offers to buy the Series A Notes only from, and will offer
to sell the Series A Notes only to, the Eligible Purchasers in accordance with
this Agreement and on the terms contemplated by the Offering Memorandum; and
(iii) will not offer or sell the Series A Notes, nor has it offered or sold the
Series A Notes by, or otherwise engaged in, any form of general solicitation or
general advertising (within the meaning of Regulation D; including, but not
limited to, advertisements, articles, notices or other communications published
in any newspaper, magazine, or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising) in connection with the offering of
the Series A Notes.
(c) The Series A Notes have not been and will not be registered under
the Securities Act and may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons except in accordance with
Regulation S under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act. The Initial Purchasers
represent that they have not offered, sold or delivered the Series A Notes, and
will not offer, sell or deliver the Series A Notes (i) as part of its
distribution at any time or (ii) otherwise until 40 days after the later of the
commencement of the offering of the Series A Notes and the Closing Date (such
period, the "Restricted Period"), within the United States or to, or for the
account or benefit of U.S. persons, except in accordance with Rule 144A under
the Securities Act or in transactions that are exempt from the registration
requirements of the Securities Act. Accordingly, each Initial Purchaser
represents and agrees that neither it, nor any of its affiliates nor any persons
acting on its or their behalf has engaged or will engage in any directed selling
efforts within the meaning of Rule 901(b) of Regulation S with respect to the
Series A Notes, and it, its affiliates and all persons acting
12
on its behalf have complied and will comply with the offering restrictions
requirements of Regulation S.
(d) Such Initial Purchaser agrees that, at or prior to confirmation of
a sale of Series A Notes (other than a sale pursuant to Rule 144A in
transactions that are exempt from the registration requirements of the
Securities Act), it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases Series
A Notes from it during the Restricted Period a confirmation or notice
substantially to the following effect:
"The Notes covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered
and sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the
offering or the closing date, except in either case in accordance with
Regulation S (or Rule 144A if available) under the Securities Act.
Terms used above have the meanings assigned to them in Regulation S."
Such Initial Purchaser further agrees that it has not entered and will
not enter into any contractual arrangement with respect to the distribution or
delivery of the Series A Notes, except with its affiliates or with the prior
written consent of the Company.
(e) Each Initial Purchaser hereby represents and warrants to, and
agrees with, the company that (i) it and each of its affiliates have not offered
or sold and will not offer or sell any Notes to persons in the United Kingdom
prior to the expiration of the period of six months from the Closing Date,
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for purposes of
their businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (ii) it and each of its
affiliates have only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to engage
in investment activity (within the meaning of Section 21 of the Financial
Services and Markets Act 2000 (the "FSMA") received by it in connection with the
issue or sale of any Notes in circumstances in which Section 21(1) of the FSMA
does not apply to the Company; and (iii) it and each of its affiliates have
complied and will comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to the Notes in, from or otherwise involving
the United Kingdom.
(f) Such Initial Purchaser agrees not to cause any advertisement of the
Series A Notes to be published in any newspaper or periodical or posted in any
public place and not to issue any circular relating to the Series A Notes,
except such advertisements as include the statements required by Regulation S.
(g) The sales of the Series A Notes pursuant to Regulation S are
"offshore transactions" and are not part of a plan or scheme to evade the
registration provisions of the Securities Act.
(h) Such Initial Purchaser understands that the Company and, for
purposes of the opinions to be delivered to you pursuant to Section 7 hereof,
counsel to the Company, General
13
Counsel to the Company and counsel to the Initial Purchasers, will rely upon the
accuracy and truth of the foregoing representations and you hereby consent to
such reliance.
The terms used in this Section 2 that have meanings assigned to them in
Regulation S are used herein as so defined.
Each Initial Purchaser further agrees that, in connection with the
Exempt Resales, it will solicit offers to buy the Series A Notes only from, and
will offer to sell the Series A Notes only to, the Eligible Purchasers in Exempt
Resales.
3. Purchase of the Notes and the Guarantees by the Initial Purchasers.
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 the
Series A Notes (and cause the Guarantors to issue the Series A Guarantees) to
the several Initial Purchasers and each of the Initial Purchasers, severally and
not jointly, agrees to purchase the aggregate principal amount of Series A Notes
set opposite that Initial Purchaser's name in Schedule 1 hereto. Each Initial
Purchaser will purchase such aggregate principal amount of Series A Notes at an
aggregate purchase price equal to 98.00% of the principal amount thereof (the
"Purchase Price").
The Company shall not be obligated to deliver any of the Series A Notes
and the Series A Guarantees to be delivered on the Closing Date (as defined
herein), except upon payment for all the Series A Notes to be purchased on the
Closing Date as provided herein.
4. Delivery of and Payment for the Notes and the Guarantees.
(a) Delivery of and payment for the Series A Notes and the Series A
Guarantees shall be made at the office of Xxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M., New York City time, on the Closing Date.
The place of closing for the Series A Notes and the Closing Date may be varied
by agreement between the Initial Purchasers and the Company.
(b) On the Closing Date, one or more Series A Notes in definitive form,
registered in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"), or such other names as the Initial Purchasers may request upon at least
one business days' notice to the Company, having an aggregate principal amount
corresponding to the aggregate principal amount of Series A Note sold pursuant
to Eligible Resales (collectively, the "Global Note"), shall be delivered by the
Company to the Initial Purchasers against payment by the Initial Purchasers of
the purchase price thereof by wire transfer of immediately available funds as
the Company may direct by written notice delivered to you two business days
prior to the Closing Date. The Global Note in definitive form shall be made
available to you for inspection not later than 2:00 p.m. on the business day
prior to the Closing Date.
(c) 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 Initial Purchaser hereunder.
5. Further Agreements of the Company. The Company agrees:
14
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, of (i) the issuance by any state securities commission of any
stop order suspending the qualification or exemption from qualification of any
Series A Notes or Series A Guarantees for offering or sale in any jurisdiction,
or the initiation or threatening of any proceeding for such purpose by the
Commission or any state securities commission or other regulatory authority, and
(ii) the happening of any event that makes any statement of a material fact made
in the Offering Memorandum untrue or which requires the making of any additions
to or changes in the Offering Memorandum in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company shall use all commercially reasonable efforts to prevent
the issuance of any stop order or order suspending the qualification or
exemption of the Series A Notes or Series A Guarantees under any state
securities or Blue Sky laws and, if at any time any state securities commission
shall issue any stop order suspending the qualification or exemption of the
Series A Notes or Series A Guarantees under any state securities or Blue Sky
laws, the Company shall use every reasonable effort to obtain the withdrawal or
lifting of such order at the earliest possible time.
(b) To furnish to you, as many copies of the Offering Memorandum, and
any amendments or supplements thereto, as you may reasonably request. Such
copies shall be furnished without charge for use in connection with the Exempt
Resales for the nine-month period immediately following the Closing Date. The
Company consents to the use of the Offering Memorandum, and any amendments and
supplements thereto required pursuant to this Agreement, by you in connection
with the Exempt Resales that are in compliance with this Agreement.
(c) Not to amend or supplement the Offering Memorandum prior to the
Closing Date or during the period referred to in (d) below unless you shall
previously have been advised of, and shall not have reasonably objected to, such
amendment or supplement within a reasonable time, but in any event not longer
than five days after being furnished a copy of such amendment or supplement. The
Company shall promptly prepare, upon any reasonable request by you, any
amendment or supplement to the Offering Memorandum that may be necessary or
advisable in connection with Exempt Resales.
(d) If, in connection with any Exempt Resales or market making
transactions after the date of this Agreement and prior to the consummation of
the Registered Exchange Offer, any event shall occur that, in the judgment of
the Company or in the reasonable judgment of counsel to you, makes any statement
of a material fact in the Offering Memorandum untrue or that requires the making
of any additions to or changes in the Offering Memorandum in order to make the
statements in the Offering Memorandum, in light of the circumstances under which
they were made at the time that the Offering Memorandum is delivered to
prospective Eligible Purchasers, not misleading, or if it is necessary to amend
or supplement the Offering Memorandum to comply with applicable law, the Company
shall promptly notify you of such event and prepare an appropriate amendment or
supplement to the Offering Memorandum so that (i) the statements in the Offering
Memorandum as amended or supplemented will, in light of the circumstances under
which they were made at the time that the Offering Memorandum is delivered to
prospective Eligible Purchasers, not be misleading and (ii) the Offering
Memorandum will comply with applicable law.
(e) Promptly from time to time to take such action as the Initial
Purchasers may reasonably request to qualify the Series A Notes and the Series A
Guarantees for offering and sale
15
under the securities laws of such jurisdictions as the Initial Purchasers may
request (provided, however, that the Company shall not be obligated to qualify
as a foreign corporation in any jurisdiction in which it is not now so qualified
or to take any action that would subject it to taxation or to general consent to
service of process in any jurisdiction in which it is not now so subject) and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the
distribution of the Series A Notes and the Series A Guarantees.
(f) Prior to the Closing Date, to furnish to you, as soon as they have
been prepared, a copy of any internal consolidated financial statements of the
Company for any period subsequent to the period covered by the financial
statements appearing in the Offering Memorandum.
(g) To use all commercially reasonable efforts to do and perform all
things required to be done and performed under this Agreement by it prior to or
after the Closing Date and to satisfy all conditions precedent on its part to
the delivery of the Series A Notes and the Series A Guarantees.
(h) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act) that
would be integrated with the sale of the Series A Notes in a manner that would
require the registration under the Securities Act of the sale to you or the
Eligible Purchasers of Series A Notes.
(i) During any period in which the Company is not subject to Section 13
or 15(d) of the Exchange Act within the two-year period following the Closing
Date, to make available to any registered holder or beneficial owner of Series A
Notes in connection with any sale thereof and any prospective purchaser of such
Series A Notes from such registered holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act.
(j) To use all commercially reasonable efforts to effect the inclusion
of the Notes in the National Association of Securities Dealers, Inc. Automated
Quotation System - PORTAL ("PORTAL").
(k) To apply the net proceeds from the sale of the Series A Notes being
sold by the Company as set forth in the Offering Memorandum under the caption
"Use of Proceeds."
(l) 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.
(m) To take such steps as shall be necessary to ensure that all the
subsidiaries of the Company that are not designated as "unrestricted
subsidiaries" or "foreign subsidiaries" in accordance with the Indenture will be
guarantors of the Notes.
(n) For a period of 90 days from the date of the Offering Memorandum,
not to, directly or indirectly, sell, offer to sell, contract to sell, grant any
option to purchase, issue any instrument convertible into or exchangeable for,
or otherwise transfer or dispose of (or enter into
16
any transaction or device which is designed to, or could be expected to, result
in the disposition in the future of), any debt securities of the Company or any
of its subsidiaries, except (i) for the Series B Notes in connection with the
Registered Exchange Offer or (ii) with the prior consent of Xxxxxx Brothers Inc.
6. Expenses. The Company agrees to pay: (a) the costs incident to the
authorization, issuance, sale and delivery of the Notes and the Guarantees and
any taxes payable in that connection; (b) the costs incident to the preparation,
printing and filing of the Offering Memorandum and any amendments and
supplements thereto; (c) the costs of distributing the Offering Memorandum and
any amendment or supplement to the Offering Memorandum, all as provided in this
Agreement; (d) the fees, disbursements and expenses of the Company's counsel and
accountants; (e) all expenses and listing fees in connection with the
application for quotation of the Series A Notes in PORTAL; (f) all fees and
expenses (including fees and expenses of counsel) of the Company in connection
with approval of the Notes by DTC for "book-entry" transfer; (g) the fees and
expenses of qualifying the Notes and Guarantees under the securities laws of the
several jurisdictions as provided in Section 5(e) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Initial Purchasers); (h) any fees charged by securities rating
services for rating the Notes and Guarantees; (i) all costs and expenses
incident to the performance of the Company's obligations under Section 9; and
(j) all other costs and expenses incident to the performance of the obligations
of the Company and the Guarantors.
7. Conditions of Initial Purchasers' Obligations. The respective
obligations of the Initial Purchasers hereunder are subject to the accuracy,
when made and on the Closing Date, of the representations and warranties of the
Company and the Guarantors contained herein, to the performance by the Company
and the Guarantors of their obligations hereunder, and to each of the following
additional terms and conditions:
(a) No Initial Purchaser shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Offering Memorandum or any
amendment or supplement thereto contains an untrue statement of a fact which, in
the opinion of Xxxxxx & Xxxxxxx LLP, counsel for the Initial Purchasers, is
material or omits to state a fact which, in the opinion of such counsel, is
material and is necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the other Operative
Documents, the Offering Memorandum, 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 Initial Purchasers, 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.
(c) Xxxxxxx Xxxxxxx & Xxxxxxxx shall have furnished to the Initial
Purchasers, its written opinion, as counsel to the Company, addressed to the
Initial Purchasers and dated the Closing Date, in the form attached hereto as
Exhibit A.
17
(d) Xxxxxxxxxxx X. Xxxxxxx, General Counsel of the Company, shall have
furnished to the Initial Purchasers his written opinion, as General Counsel to
the Company, addressed to the Initial Purchasers and dated the Closing Date, in
the form attached hereto as Exhibit B.
(e) The Initial Purchasers shall have received from Xxxxxx & Xxxxxxx
LLP, counsel for the Initial Purchasers, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Series A Notes, the
Series A Guarantees, the Offering Memorandum and other related matters as the
Initial Purchasers 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.
(f) At the time of execution of this Agreement, the Initial Purchasers
shall have received from PricewaterhouseCoopers LLP, a letter, in accordance
with professional standards established by the AICPA and in form and substance
satisfactory to the Initial Purchasers, addressed to the Initial Purchasers (i)
confirming that they are independent public accountants under Rule 101 of the
AICPA's Code of Professional Conduct, and its interpretation and rulings 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 Offering Memorandum, as of a date not more
than five days prior to the date hereof), the conclusions and findings of such
firm with respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to Initial Purchasers in connection
with registered public offerings.
(g) With respect to the letter of PricewaterhouseCoopers LLP referred
to in the preceding paragraph and delivered to the Initial Purchasers
concurrently with the execution of this Agreement (the "initial letter"), the
Company shall have furnished to the Initial Purchasers a letter (the "bring-down
letter") of such accountants in accordance with professional standards
established by the AICPA, addressed to the Initial Purchasers and dated the
Closing Date (i) confirming that they are independent public accountants under
Rule 101 of the AICPA's Code of Professional Conduct, and its interpretation and
rulings and (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 Offering Memorandum,
as of a date not more than five days prior to the date of the bring-down
letter), the conclusions and findings of such firm 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.
(h) The Company and the Guarantors shall have furnished to the Initial
Purchasers a certificate, dated the Closing Date, of their respective Chairman
of the Board, their respective President or a Vice President and their
respective chief financial officer stating that:
(i) The representations and warranties of the Company and the
Guarantors in Section 1 are true and correct as of the Closing Date;
the Company and the Guarantors have complied with all their agreements
contained herein; and the conditions set forth in Sections 7(i) and
7(j) have been fulfilled; and
(ii) They have carefully examined the Offering Memorandum and,
in their opinion (A) the Offering Memorandum as of its date and as of
the Closing Date,
18
did not include any untrue statement of a material fact and did not
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B) since
the date of the Offering Memorandum, no event has occurred which should
have been set forth in a supplement or amendment to the Offering
Memorandum.
(i) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements incorporated
by reference in the Offering Memorandum 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 Offering
Memorandum (or in the documents incorporated therein by reference) 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 Offering Memorandum (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 Initial Purchasers, so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Notes and the Guarantees being delivered on the
Closing Date on the terms and in the manner contemplated in the Offering
Memorandum.
(j) 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) under the
Securities Act 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.
(k) 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 such 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 there shall
have occurred any other calamity or crisis (including, without limitation, as a
result of terrorist activities) or (iv) there shall have occurred such a
material 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 Initial Purchasers,
impracticable or inadvisable to proceed with the public offering or delivery of
the
19
Notes being delivered on the Closing Date on the terms and in the manner
contemplated in the Offering Memorandum.
(l) On or prior to the Closing Date, The Depository Trust Company shall
have accepted the Series A Notes for clearance.
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 reasonably satisfactory
to counsel for the Initial Purchasers.
8. Indemnification and Contribution.
(a) The Company and the Guarantors shall jointly and severally
indemnify and hold harmless each Initial Purchaser, its officers and employees
and each person, if any, who controls any Initial Purchaser 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 Notes and Guarantees), to which that Initial Purchaser, 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 (A) in the Offering Memorandum or in any amendment or supplement
thereto or (B) in any blue sky application or other document prepared or
executed by the Company (or based upon any written information furnished by the
Company) specifically for the purpose of qualifying any or all of the Series A
Notes under the securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a "Blue Sky
Application"), (ii) the omission or alleged omission to state in the Offering
Memorandum, 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 Initial Purchaser in connection with, or
relating in any manner to, the Notes 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 Guarantors 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 Initial Purchaser through its gross negligence or
willful misconduct), and shall reimburse each Initial Purchaser and each such
officer, employee or controlling person promptly upon demand for any legal or
other expenses reasonably incurred by that Initial Purchaser, 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 Guarantors
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
the Offering Memorandum, or in any such amendment or supplement, or in any Blue
Sky Application, in reliance upon and in conformity with written information
concerning such Initial Purchaser furnished to the Company by or on behalf of
any Initial Purchaser specifically for inclusion therein. The foregoing
indemnity agreement is in addition to any liability which the
20
Company and the Guarantors may otherwise have to any Initial Purchaser or to any
officer, employee or controlling person of that Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall indemnify
and hold harmless the Company, the Guarantors, their officers and employees,
each of their directors, and each person, if any, who controls the Company and
the Guarantors 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, the Guarantors or any such director, officer 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 (A) in the Offering Memorandum or in any amendment or supplement
thereto, or (B) in any Blue Sky Application or (ii) the omission or alleged
omission to state in the Offering Memorandum, 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 Initial Purchaser furnished to the Company
by or on behalf of that Initial Purchaser specifically for inclusion therein,
and shall reimburse the Company, the Guarantors and any such director, officer
or controlling person for any legal or other expenses reasonably incurred by the
Company, such Guarantor or any such director, officer 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. The
foregoing indemnity agreement is in addition to any liability which any Initial
Purchaser may otherwise have to the Company, the Guarantors or any such
director, officer, employee or controlling person.
(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
21
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 have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that 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 Initial Purchaser or any of their respective officers, employees
or controlling persons, or by the Company, if the indemnified parties under this
Section consist of the Company, the Guarantors or any of the Company's or the
Guarantors' 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 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
and the Guarantors on the one hand and the Initial Purchasers on the other from
the offering of the Series A Notes and the Series A Guarantees 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 and
the Guarantors on the one hand and the Initial Purchasers 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 and the
Guarantors on the one hand and the Initial Purchasers 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 Series A Notes purchased under this Agreement
(before deducting expenses) received by the Company and the Guarantors, on the
one hand, and the total discounts and commissions received by the Initial
Purchasers with respect to the Series A Notes and the Series A Guarantees
purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the Series A Notes under this Agreement. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a
22
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, the Guarantors or the Initial
Purchasers, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantors and the Initial Purchasers agree that it would not
be just and equitable if contributions pursuant to this Section 8(d) were to be
determined by pro rata allocation (even if the Initial Purchasers 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 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 Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at which
the Series A Notes purchased by it was resold to Eligible Purchasers exceeds the
amount of any damages which such Initial Purchaser 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 Initial Purchasers' obligations to contribute as provided
in this Section 8(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Initial Purchasers severally confirm and the Company and the
Guarantors acknowledge that the first sentence of the last paragraph on the
cover page, the last paragraph on page ii and the last paragraph, the first
sentence of the third to last paragraph and the fifth to last paragraph under
the caption "Plan of Distribution" constitute the only information concerning
such Initial Purchasers furnished in writing to the Company by or on behalf of
the Initial Purchasers specifically for inclusion in the Offering Memorandum.
9. Termination. The obligations of the Initial Purchasers hereunder may
be terminated by Xxxxxx Brothers Inc. by notice given to and received by the
Company prior to delivery of and payment for the Series A Notes and the Series A
Guarantees if, prior to that time, any of the events described in Sections 7(i),
7(j) or 7(k), shall have occurred or if the Initial Purchasers shall decline to
purchase the Series A Notes for any reason permitted under this Agreement.
10. Reimbursement of Initial Purchasers' Expenses. If the Company and
the Guarantors shall fail to tender the Series A Notes and the Series A
Guarantees for delivery to the Initial Purchasers by reason of any failure,
refusal or inability on the part of the Company and the Guarantors to perform
any agreement on its part to be performed, or because any other condition of the
Initial Purchasers' obligations hereunder required to be fulfilled by the
Company and the Guarantors is not fulfilled, the Company and the Guarantors will
reimburse the Initial Purchasers for all reasonable out-of-pocket expenses
(including fees and disbursements of counsel) incurred by the Initial Purchasers
in connection with this Agreement and the proposed purchase of the Series A
Notes and the Series A Guarantees, and upon demand the Company and the
Guarantors shall pay the full amount thereof to the Initial Purchasers.
23
11. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail,
telex or facsimile transmission to (i) Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department (Fax: 000-000-0000),
(ii) Xxxxxx Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Syndicate Department (iii) Banc of America Securities LLC, 0 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxx (Fax
000-000-0000) and (iv) Credit Suisse First Boston LLC, 00 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Transaction Advisory Group with a copy to
Xxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx Xxxxxxx (Fax: 000-000-0000) and, in the case of any notice pursuant to
Section 8, 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 and the Guarantors, shall be delivered or sent by
mail, telex or facsimile transmission to L-3 Communications Corporation, 000
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxxxxx X.
Xxxxxxx (Fax: 000-000-0000), with a copy to Xxxxxxx Xxxxxxx & Xxxxxxxx, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxx, Xx. (Fax:
(000) 000-0000).
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
Initial Purchasers by Xxxxxx Brothers Inc.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company,
the Guarantors 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
and the Guarantors contained in this Agreement shall also be deemed to be for
the benefit of the person or persons, if any, who control any Initial Purchaser
within the meaning of Section 15 of the Securities Act and (B) the indemnity
agreement of the Initial Purchasers contained in Section 8(b) of this Agreement
shall be deemed to be for the benefit of directors of the Company and the
Guarantors and any person controlling the Company and the Guarantors within the
meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 12, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
13. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Guarantors and the Initial Purchasers
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Notes and the Guarantees and shall remain in full force and effect, regardless
of any investigation made by or on behalf of any of them or any person
controlling any of them.
24
14. 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 rules
and regulations of the Commission under the Securities Act.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK.
16. 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.
17. 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]
25
If the foregoing correctly sets forth the agreement among the Company,
the Guarantors and the Initial Purchasers, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
L-3 COMMUNICATIONS CORPORATION,
as the Company
By:
-----------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Senior Vice President,
Secretary and General Counsel
AMI INSTRUMENTS, INC.
APCOM, INC.
BROADCAST SPORTS INC.
CELERITY SYSTEMS INCORPORATED
EER SYSTEMS, INC.
ELECTRODYNAMICS, INC.
XXXXXXXX AEROSPACE COMPONENT OVERHAUL & REPAIR, INC.
XXXXXXXX AVIONICS SYSTEMS, INC.
XXXXXXXX FLIGHTSYSTEMS, INC.
XXXXXXXX, INC.
HYGIENETICS ENVIRONMENTAL SERVICES, INC.
INTERSTATE ELECTRONICS CORPORATION
KDI PRECISION PRODUCTS, INC.
L-3 COMMUNICATIONS AIS GP CORPORATION
L-3 COMMUNICATIONS ANALYTICS CORPORATION
L-3 COMMUNICATIONS ATLANTIC SCIENCE & TECHNOLOGY CORPORATION
L-3 COMMUNICATIONS AYDIN CORPORATION
L-3 COMMUNICATIONS ESSCO, INC.
L-3 COMMUNICATIONS ILEX SYSTEMS, INC.
X-0 XXXXXXXXXXXXXX XXX CORPORATION
L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P.
L-3 COMMUNICATIONS INVESTMENTS, INC.
L-3 COMMUNICATIONS SECURITY AND DETECTION SYSTEMS CORPORATION DELAWARE
L-3 COMMUNICATIONS SECURITY AND DETECTION SYSTEMS CORPORATION CALIFORNIA
L-3 COMMUNICATIONS SPD TECHNOLOGIES, INC.
L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC.
L-3 COMMUNICATIONS TMA CORPORATION
L-3 COMMUNICATIONS WESTWOOD CORPORATION
MCTI ACQUISITION CORPORATION
MICRODYNE COMMUNICATIONS TECHNOLOGY INCORPORATED
MICRODYNE CORPORATION
MICRODYNE OUTSOURCING INCORPORATED
MPRI, INC.
PAC ORD, INC.
POWER PARAGON, INC.
SHIP ANALYTICS, INC.
SHIP ANALYTICS INTERNATIONAL, INC.
SHIP ANALYTICS USA, INC.
SOUTHERN CALIFORNIA MICROWAVE, INC.
SPD ELECTRICAL SYSTEMS, INC.
SPD HOLDINGS, INC.
SPD SWITCHGEAR, INC.
SYCOLEMAN CORPORATION
TELOS CORPORATION
TROLL TECHNOLOGY CORPORATION
WESCAM AIR OPS INC.
WESCAM AIR OPS LLC
WESCAM HOLDINGS (US) INC.
WESCAM INCORPORATED
WESCAM LLC
WESCAM SONOMA INC.
WOLF COACH, INC.
as Guarantors
By:
------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President and Secretary
L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P.
By: L-3 COMMUNICATIONS AIS GP CORPORATION,
as general partner
By:
------------------------------------
Name:
Title: Authorized Person
Accepted:
XXXXXX BROTHERS INC.
XXXXXX XXXXXXX & CO. INCORPORATED
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON LLC
For themselves and as Representatives
of the several Initial Purchasers named
in Schedule 1 hereto
By: XXXXXX BROTHERS INC.
By:
------------------------------------
Authorized Representative
SCHEDULE 1
Principal
Initial Purchaser: Amount of Notes
------------------ ---------------
Xxxxxx Brothers Inc. $125,629,000
Xxxxxx Xxxxxxx & Co. Incorporated $125,629,000
Banc of America Securities LLC $ 50,251,000
Credit Suisse First Boston LLC $ 40,201,000
XX Xxxxx Securities Corporation $ 11,658,000
Wachovia Securities, Inc. $ 11,658,000
Banc One Capital Markets, Inc. $ 5,829,000
Barclays Capital Inc. $ 5,829,000
BNY Capital Markets, Inc. $ 5,829,000
Credit Lyonnais Securities (USA) Inc. $ 5,829,000
Fleet Securities, Inc. $ 5,829,000
Scotia Capital (USA) Inc. $ 5,829,000
------------
Total $400,000,000
============
I-1
EXHIBIT A
OPINION OF XXXXXXX XXXXXXX & XXXXXXXX
May 21, 2003
XXXXXX BROTHERS INC.
XXXXXX XXXXXXX & CO. INCORPORATED
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON LLC
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 Corporation, a Delaware
corporation (the "Company"), in connection with the purchase by you of
$400,000,000 aggregate principal amount of its 6-1/8% Senior Subordinated Notes
due 2013 (the "Notes") of the Company and the related guarantees (the
"Guarantees") by the Delaware subsidiaries of the Company named on Schedule I
attached hereto (each, a "Delaware Guarantor" and collectively, the "Delaware
Guarantors") and the non-Delaware subsidiaries of the Company named on Schedule
II attached hereto (each, a "Non-Delaware Guarantor" and collectively, the
"Non-Delaware Guarantors," taken together with the Delaware Guarantors, the
"Subsidiary Guarantors"), pursuant to the Purchase Agreement dated May 14, 2003
(the "Purchase Agreement"), among Xxxxxx Brothers Inc., Xxxxxx Xxxxxxx & Co.
Incorporated, Banc of America Securities LLC and Credit Suisse First Boston LLC,
as initial purchasers (the "Initial Purchasers"), the Company and the Subsidiary
Guarantors.
I-1
We have examined the Offering Memorandum dated May 14, 2003, relating
to the sale of the Notes (the "Offering Memorandum"), which incorporates or is
deemed to incorporate by reference the Annual Report on Form 10-K of L-3
Communications Holdings, Inc. ("Holdings") and the Company for the fiscal year
ended December 31, 2002 and the Quarterly Report on Form 10-Q of Holdings and
the Company for the fiscal quarter ended March 31, 2003 (the "Exchange Act
Documents"), each as filed under the Securities Exchange Act of 1934; the
Indenture dated as of May 21, 2003 (the "Indenture") among the Company, the
Subsidiary Guarantors and The Bank of New York, as trustee (the "Trustee"); the
Notes; the guarantees indorsed on or annexed to the Notes (the "Guarantees");
the Purchase Agreement; and the Registration Rights Agreement dated as of May
21, 2003 (the "Registration Rights Agreement") among the Company, the Subsidiary
Guarantors and the Initial Purchasers pursuant to which the Company's Series B
6-1/8% Senior Subordinated Notes due 2013 (the "Series B Notes") will be
registered under the Securities Act of 1933, as amended (the "Securities Act").
The Series B Notes will be guaranteed by each of the Subsidiary Guarantors (the
"Series B Guarantees"). 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 of public officials and of officers and representatives of
the Company and the Subsidiary Guarantors, and have made such other
investigations, as we have deemed relevant and necessary in connection with the
opinions hereinafter set forth.
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 and the Delaware Guarantors (other than
Wescam Air Ops LLC and Wescam LLC (the "LLCs") and 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 Delaware, and
has all corporate power and authority necessary to conduct its respective
businesses as described in the Offering Memorandum.
2. Each of the LLCs has been duly formed and is validly existing as
a limited liability company in good standing under the laws of Delaware,
and has all limited liability company power and authority necessary to
conduct its business as described in the Offering Memorandum.
3. The LP has been duly formed and is validly existing as a limited
partnership in good standing under the laws of Delaware, and has all
limited partnership power and authority necessary to conduct its business
as described in the Offering Memorandum.
4. All of the outstanding shares of Common Stock of the Company
have been duly authorized and have been validly issued, fully paid and
non-assessable; and all of the issued shares of capital stock of each of
the Delaware Guarantors (other than the LP and the LLCs) have been duly and
validly authorized and issued, are fully paid and non-assessable and, based
solely on an examination of each such subsidiary's stock ledger and minute
book, all such shares are held of record by the Company or one of its
subsidiaries.
5. Based solely on an examination of (i) the Limited Liability
Agreement of Wescam LLC, dated as of October 26, 1999, and (ii) the Limited
Liability Agreement of Wescam Air Ops LLC, dated as of January 25, 2001,
all of the membership interests of each LLC are held of record by the
Company or one of its subsidiaries.
6. The Indenture has been duly authorized, executed and delivered
by the Company and the Delaware Guarantors and, assuming that the Indenture
is the valid and legally binding obligation of the Trustee, constitutes a
valid and legally binding obligation of the Company and the Delaware
Guarantors enforceable against the Company and the Delaware Guarantors in
accordance with its terms.
7. Assuming that the Indenture has been duly authorized, executed
and delivered by the Non-Delaware Guarantors and assuming that the
Indenture is the valid and legally binding obligation of the Trustee, the
Indenture constitutes a valid and legally binding obligation of the
Non-Delaware Guarantors enforceable against the Non-Delaware Guarantors in
accordance with its terms.
8. The Notes have been duly authorized, executed and issued by the
Company and, assuming due authentication thereof by the Trustee and upon
payment and delivery in accordance with the terms of the Purchase
Agreement, will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture.
9. The Guarantees have been duly authorized, executed and issued by
each of the Delaware Guarantors and, assuming due authentication of the
Notes by the Trustee, upon payment and delivery of the Notes in accordance
with the terms of the Purchase Agreement, will constitute valid and legally
binding obligations of the Delaware Guarantors enforceable against the
Delaware Guarantors in accordance with their terms.
10. Assuming that the Guarantees have been duly authorized,
executed and issued by each of the Non-Delaware Guarantors and, assuming
due authentication of the Notes by the Trustee, upon payment and delivery
of the Notes in accordance with the terms of the Purchase Agreement, the
Guarantees will constitute valid and legally binding obligations of the
Non-Delaware Guarantors enforceable against the Non-Delaware Guarantors in
accordance with their terms.
11. The Series B Notes have been duly authorized by the Company,
and the Series B Guarantees have been duly authorized by the Delaware
Guarantors.
12. The statements contained in the Offering Memorandum under the
captions "Business--Pension Plans," "Description of Other Indebtedness,"
and "Description of the Notes," insofar as they describe charter documents,
contracts, statutes, rules and regulations and other legal matters,
constitute an accurate summary thereof in all material respects.
13. The statements made in the Offering Memorandum under the
caption "Certain United States Federal Income Tax Considerations 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.
14. 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 a prospectus included in a registration
statement on Form S-3 which are not described in the Offering Memorandum or
in documents incorporated therein by reference.
15. The Purchase Agreement has been duly authorized, executed and
delivered by the Company and the Delaware Guarantors.
16. The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and the Delaware Guarantors and,
assuming that the Registration Rights Agreement is the valid and legally
binding obligation of the Initial Purchasers, constitutes a valid and
legally binding obligation of the Company and the Delaware Guarantors,
enforceable against the Company and the Delaware Guarantors in accordance
with its terms.
17. Assuming that the Registration Rights Agreement has been duly
authorized, executed and delivered by the Non-Delaware Guarantors and,
assuming that the Registration Rights Agreement is the valid and legally
binding obligation of the Initial Purchasers, the Registration Rights
Agreement constitutes a valid and legally binding obligation of the
Non-Delaware Guarantors enforceable against the Non-Delaware Guarantors in
accordance with its terms.
18. The issue and sale of the Notes by the Company and the
Guarantees by the Subsidiary Guarantors and the compliance by the Company
or the Subsidiary Guarantors, as applicable, with all of the provisions of
the Purchase Agreement, the Indenture, the Notes, the Guarantees and the
Registration Rights 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 Company's Registration Statement
on Form S-3 (Registration No. 333-84826), nor will such actions violate the
Certificate of Incorporation or By-Laws of the Company or the Delaware
Guarantors (or, in the case of the LP, the Limited Partnership Agreement,
dated February 22, 2002,
between L-3 Communications Investments Inc. and L-3 Communications AIS GP
Corporation or, in the case of the LLCs, the Limited Liability Agreements
referenced in paragraph 5 above) or any federal or New York statute or the
Delaware General Corporation Law, the Delaware Revised Uniform Limited
Partnership Act or the Delaware Limited Liability Company Act or any rule
or regulation that has been issued pursuant to any federal or New York
statute or the Delaware General Corporation Law, the Delaware Revised
Uniform Limited Partnership Act or the Delaware Limited Liability Company
Act or any order known to us issued pursuant to any federal or New York
statute or the Delaware General Corporation Law, the Delaware Revised
Uniform Limited Partnership Act or the Delaware Limited Liability Company
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
respective properties or assets; 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, the Delaware
Revised Uniform Limited Partnership Act or the Delaware Limited Liability
Company Act or, to our knowledge, any federal or New York court or any
Delaware court acting pursuant to the Delaware General Corporation Law, the
Delaware Revised Uniform Limited Partnership Act or the Delaware Limited
Liability Company Act is required for the issuance and sale of the Notes by
the Company or the issuance of the Guarantees by the Subsidiary Guarantors,
except for the registration under the Securities Act of the Series B Notes
and the Series B Guarantees, in accordance with the Registration Rights
Agreement, and the qualification of the Indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), 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 Notes and the Guarantees by the Initial
Purchasers. 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.
19. No registration of the Notes and the Guarantees under the
Securities Act and no qualification of the Indenture under the Trust
Indenture Act is required for the offer and sale of the Notes by the
Company and the Guarantees by the Subsidiary Guarantors to the Initial
Purchasers or the reoffer and resale of the Notes by the Initial Purchasers
to the initial purchasers therefrom solely in the manner contemplated by
the Offering Memorandum, the Purchase Agreement and the Indenture.
Our opinions set forth in paragraphs 6, 7, 8, 9, 10, 16 and 17 above
are subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing. Our opinions set forth in paragraphs 16 and 17 are further limited by
considerations of public policy.
We express no opinion as to the validity, legally binding effect or
enforceability of any provision of the Registration Rights Agreement or any
related provisions of the Indenture
that requires or relates to payment of any interest at a rate or in an amount
which a court would determine in the circumstances under applicable law to be
commercially unreasonable or a penalty or a forfeiture. In addition, we express
no opinion as to the validity, legally binding effect or enforceability of the
waiver of rights and defenses contained in Section [11.07] of the Indenture.
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Offering Memorandum or the
Exchange Act Documents and take no responsibility therefor, except as and to the
extent set forth in paragraphs 12 and 13 above. In the course of the preparation
by the Company of the Offering Memorandum (excluding the Exchange Act
Documents), we participated in conferences with certain officers and employees
of the Company, with representatives of PricewaterhouseCoopers L.L.P. and with
counsel to the Initial Purchasers. We did not prepare the Exchange Act
Documents. Based upon our examination of the Offering Memorandum and the
Exchange Act Documents, our investigations made in connection with the
preparation of the Offering Memorandum (excluding the Exchange Act Documents)
and our participation in the conferences referred to above, we have no reason to
believe that the Offering Memorandum (including the Exchange Act Documents) as
of its date contained or as of the date hereof contains any untrue statement of
a material fact or omits or omitted 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 in the Offering Memorandum 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, the Delaware General Corporation
Law, the Delaware Revised Uniform Limited Partnership Act and the Delaware
Limited Liability Company 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 I
DELAWARE GUARANTORS
-------------------
BROADCAST SPORTS INC., a Delaware corporation
XXXXXXXX AEROSPACE COMPONENT OVERHAUL & REPAIR, INC., a Delaware corporation
XXXXXXXX AVIONICS SYSTEMS, INC., a Delaware corporation
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 INTEGRATED SYSTEMS L.P., a Delaware limited partnership
L-3 COMMUNICATIONS INVESTMENTS, INC., a Delaware corporation
L-3 COMMUNICATIONS SECURITY AND DETECTION SYSTEMS CORPORATION DELAWARE,
a Delaware corporation
L-3 COMMUNICATIONS SPD TECHNOLOGIES, INC., a Delaware corporation
MPRI, INC., a Delaware corporation
PAC ORD INC., a Delaware corporation
POWER PARAGON, INC., a Delaware corporation
SHIP ANALYTICS INTERNATIONAL, INC., a Delaware corporation
SPD ELECTRICAL SYSTEMS, INC., a Delaware corporation
SPD HOLDINGS, INC., a Delaware corporation
SPD SWITCHGEAR INC., a Delaware corporation
WESCAM AIR OPS INC., a Delaware corporation
WESCAM AIR OPS LLC, a Delaware limited liability company
WESCAM HOLDINGS (US) INC., a Delaware corporation
WESCAM LLC, a Delaware limited liability company
SCHEDULE II
NON-DELAWARE GUARANTORS
-----------------------
AMI INSTRUMENTS, INC., an Oklahoma corporation
APCOM, INC., a Maryland corporation
CELERITY SYSTEMS INCORPORATED, a California corporation
EER SYSTEMS, INC., a Virginia corporation
ELECTRODYNAMICS, INC., an Arizona corporation
XXXXXXXX FLIGHTSYSTEMS, INC., an Ohio corporation
INTERSTATE ELECTRONICS CORPORATION, a California corporation
L-3 COMMUNICATIONS ANALYTICS CORPORATION, a California corporation
L-3 COMMUNICATIONS ATLANTIC SCIENCE AND TECHNOLOGY CORPORATION,
a New Jersey corporation
X-0 XXXXXXXXXXXXXX XXX CORPORATION, a Connecticut corporation
L-3 COMMUNICATIONS SECURITY AND DETECTION SYSTEMS CORPORATION CALIFORNIA,
a California corporation
L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC., a California corporation
L-3 COMMUNICATIONS TMA CORPORATION, a Virginia corporation
L-3 COMMUNICATIONS WESTWOOD CORPORATION, a Nevada corporation
MCTI ACQUISITION CORPORATION, a Maryland corporation
MICRODYNE COMMUNICATIONS TECHNOLOGIES INCORPORATED, a Maryland corporation
MICRODYNE CORPORATION, a Maryland corporation
MICRODYNE OUTSOURCING INCORPORATED, a Maryland corporation
SHIP ANALYTICS, INC., a Connecticut corporation
SHIP ANALYTICS USA, INC., a Connecticut corporation
SOUTHERN CALIFORNIA MICROWAVE, INC., a California corporation
SYCOLEMAN CORPORATION, a Florida corporation
TELOS CORPORATION, a California corporation
TROLL TECHNOLOGY CORPORATION, a California corporation
WESCAM INCORPORATED, a Florida corporation
WESCAM SONOMA INC., a California corporation
WOLF COACH, INC., a Massachusetts corporation
EXHIBIT B
OPINION OF XXXXXXXXXXX X. XXXXXXX
1. To my knowledge, the Company and each of its subsidiaries have good
and marketable title to all property (real and personal) described in the
Offering Memorandum as being owned by them, free and clear of all liens, claims,
security interests or other encumbrances except such as are described in the
Offering Memorandum (or in 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 Offering Memorandum 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).
2. To my knowledge and except as otherwise disclosed in the Offering
Memorandum (or in 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.
3. To my knowledge and except (i) as otherwise disclosed in the
Offering Memorandum (or in documents incorporated therein by reference) and (ii)
as provided in the Registration Rights Agreement, 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 Exchange Offer Registration Statement
or the Shelf Registration Statement.
4. None of the issue and sale of the Notes by the Company and the
Guarantees by the Guarantors and the compliance by the Company and the
Guarantors, as applicable, with all of the provisions of this Agreement and the
consummation of the transactions contemplated hereby and thereby requires any
consent, approval, authorization or other order of, or registration or filing
with, any federal court, federal regulatory body, federal administrative agency
or other federal governmental official having authority over government
procurement matters (provided, that the opinion contained in this paragraph (4)
may be delivered by other counsel reasonably satisfactory to the Initial
Purchasers).
Whenever a statement herein is qualified by "to my knowledge" or a
similar phrase, it is intended that I do not have current, actual knowledge of
the inaccuracy of such statement; however, except as expressly indicated, I have
not undertaken any independent investigation to determine the accuracy of such
statement and no inference should be drawn that I have any such knowledge solely
from my position with the Company.
I am a member of the Bar of the State of New York, and I 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, the Delaware Revised Uniform Limited
Partnership Act, the Delaware General Corporation Law and the Delaware Limited
Liability Company Act.
EXHIBIT C
FORM OF CERTIFICATE FROM
ACQUIRING ACCREDITED INVESTOR
XXXXXX BROTHERS INC.
XXXXXX XXXXXXX & CO. INCORPORATED
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON LLC
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx, Xxxxx Xxxxx
High Yield Capital Markets
New York, New York 10019
Re: L-3 Communications Corporation
------------------------------
Reference is hereby made to (i) the Purchase Agreement, dated May 14, 2003
(the "Purchase Agreement") among L-3 Communications Corporation, as issuer (the
"Company"), the Guarantors named on the signature pages thereto and you and (ii)
the Indenture to be dated as of May 21, 2003 (the "Indenture") relating to the
6-1/8% Senior Subordinated Notes due 2013, among the Company, the Guarantors
named on the signature pages thereto and The Bank of New York, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture or the Purchase Agreement.
In connection with my proposed purchase of $1,000,000 aggregate
principal amount of Series A Notes, I hereby confirm that:
1. I understand that any subsequent transfer of the Series A Notes, or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the Series A Notes and the undersigned agrees to be bound
by, and not to resell, pledge or otherwise transfer the Series A Notes or any
interest therein except in compliance with, such restrictions and conditions and
the Securities Act of 1933, as amended (the "Securities Act").
2. I understand that the offer and sale of the Series A Notes has not
been registered under the Securities Act, and that the Series A Notes and any
interest therein may not be offered or sold except as permitted in the following
sentence. I agree that if I should sell the Series A Notes or any interest
therein, I will do so only (1) (a) to a person who I reasonably believe is a
Qualified Institutional Buyer (as defined in Rule 144A under the Act) in a
transaction meeting the requirements of Rule 144A, (b) in a transaction meeting
the requirements of Rule 144 under the Securities Act, (c) outside the United
States to a foreign person in a transaction meeting the requirements of Rule 904
under the Securities Act or (d) in accordance with another exemption from the
registration requirements of the Securities Act (and based on an opinion of
counsel if the Company so requests), (2) to the Company or (3) pursuant to an
effective registration statement and, in each case, in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction, and I further agree to provide to any person purchasing
a beneficial interest in a Series A Note from me in a transaction meeting the
requirements of clauses (a) through (d) above a notice advising such purchaser
that resales thereof are restricted as stated herein.
3. I understand that, on any proposed resale of the Series A Notes or
beneficial interest therein, I will be required to furnish to the Company such
certifications, legal opinions and other information as the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. I further understand that the Series A Notes purchased by me will
bear a legend to the foregoing effect.
4. I am an "accredited investor" (as defined in Rule 501(a)(4), (5) or
(6) of Regulation D under the Securities Act) and have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of my investment in the Series A Notes and I am able to bear
the economic risk of my investment.
5. I am acquiring the Series A Notes or beneficial interest therein
purchased by me for my account.
6. I am acquiring the Series A Notes for investment purposes only with
no present intention to resell the Series A Notes, and agree not to sell,
transfer, assign, pledge or hypothecate any of the Series A Notes for at least
three months following the completion of the offering.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Signature Page to Follow]
By:
-------------------------------
Name:
Title:
Dated:
----------------------------
