7,400,000 SHARES
L-3 COMMUNICATIONS HOLDINGS, INC.
COMMON STOCK, $.01 PAR VALUE
U.S. UNDERWRITING AGREEMENT
---------------------------
February __, 1999
▇▇▇▇▇▇ BROTHERS INC.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇.▇. ▇▇▇▇▇▇▇▇▇, TOWBIN
As Representatives of the several
U.S. Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
L-3 Communications Holdings, Inc., a Delaware corporation (the
"Company"), and Lockheed ▇▇▇▇▇▇ Corporation, ▇▇▇▇▇▇ Brothers Capital Partners
III, L.P., LB I Group Inc., ▇▇▇▇▇▇ Brothers MBG Partners 1997 (A) L.P. and
▇▇▇▇▇▇ Brothers MBG Partners 1997 (B) L.P. (collectively, the "Selling
Stockholders") propose to sell an aggregate of 7,400,000 shares (the "Firm
Stock") of the Company's Common Stock, par value $.01 per share (the "Common
Stock"). Of the 7,400,000 shares of the Firm Stock, 2,800,000 shares are being
sold by the Company and 4,600,000 are being sold by the Selling Stockholders.
In addition, the Company proposes to grant to the U.S. Underwriters named in
Schedule 1 hereto (the "U.S. Underwriters") an option to purchase up to an
additional 1,110,000 shares of the Common Stock on the terms and for the
purposes set forth in Section 3 (the "Option Stock"). The Firm Stock and the
Option Stock, if purchased, are hereinafter collectively called the "Stock." As
described in the Prospectus (hereinafter defined), the Company will use the net
proceeds from the sale of the Stock to repay any existing indebtedness under
L-3 Communications Corporation's senior credit facilities and for general
corporate purposes, including potential acquisitions. This is to confirm the
agreement concerning the purchase of the Stock from the Company and the Selling
Stockholders by the U.S. Underwriters.
It is understood by all parties that the Company and the Selling
Stockholders are concurrently entering into an agreement dated the date hereof
(the "International Underwriting Agreement") providing for the sale by the
Company of 700,000 shares of Common Stock and the sale by the Selling
Stockholders of 1,150,000 shares of Common Stock (together the
"International Firm Stock") through arrangements with certain underwriters
outside the United States (the "International Managers"), for whom ▇▇▇▇▇▇
Brothers International (Europe), Bear, ▇▇▇▇▇▇▇ International Limited, Credit
Suisse First Boston (Europe) Limited, ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. International Limited and ▇.▇. ▇▇▇▇▇▇▇▇▇, Towbin are acting as
lead managers. In addition, the Company proposes to grant to the International
Managers an option to purchase up to an additional 277,500 shares of the Common
Stock on the terms set forth in the International Underwriting Agreement (the
"International Option Stock" and, together with the International Firm Stock,
the "International Stock"). The U.S. Underwriters and the International
Managers simultaneously are entering into an agreement between the U.S. and
international underwriting syndicates (the "Agreement Between U.S. Underwriters
and International Managers") which provides for, among other things, the
transfer of shares of Common Stock between the two syndicates. Two forms of
prospectus are to be used in connection with the offering and sale of shares of
Common Stock contemplated by the foregoing, one relating to the Stock and the
other relating to the International Stock. The latter form of prospectus will
be identical to the former except for certain substitute pages as included in
the registration statement and amendments thereto referred to below. Except as
used in Sections 3, 4, 5, 11, 12 and 13 herein, and except as the context may
otherwise require, references herein to the Stock shall include all the shares
of Common Stock which may be sold pursuant to either this Agreement or the
International Underwriting Agreement, and references herein to any prospectus
whether in preliminary or final form, and whether as amended or supplemented,
shall include both the U.S. and the international versions thereof.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1, and amendments No. 1
and No. 2 thereto, with respect to the Stock have (i) been prepared by
the Company in conformity with the requirements of the United States
Securities Act of 1933, as amended (the "Securities Act") and the
rules and regulations (the "Rules and Regulations") of the United
States Securities and Exchange Commission (the "Commission")
thereunder, (ii) been filed with the Commission under the Securities
Act and (iii) become effective under the Securities Act. Copies of
such registration statement and the amendments thereto have been
delivered by the Company to you as the representatives (the
"Representatives") of the U.S. Underwriters. As used in this
Agreement, "Effective Time" means the time as of which such
registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; " Preliminary Prospectus"
means each prospectus included in such registration statement, or
amendments thereof, before it became effective under the Securities
Act and any prospectus filed with the Commission by the Company with
the consent of the Representatives pursuant to Rule 424(a) of the
Rules and Regulations; "Registration Statement" means such
registration statement, as amended at the Effective Time, including
all information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the
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Rules and Regulations in accordance with Section 6 hereof and deemed
to be a part of the registration statement as of the Effective Time
pursuant to paragraph (b) of Rule 430A of the Rules and Regulations;
and "Prospectus" means such final prospectus, as first filed with the
Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the
Rules and Regulations. If the Company has filed or is required
pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Securities Act registering additional shares
of Common Stock (a "Rule 462(b) Registration Statement"), then, unless
otherwise specified, any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462(b) Registration
Statement. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus; and no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission. Any Rule 462(b) Registration Statement
filed after the effectiveness of this Agreement will become effective
no later than 10:00 A.M., New York City time, on the date following
this Agreement.
(b) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the
effectiveness of this Agreement) conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement
(including, if the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such
Rule 462(b) Registration Statement and any amendments thereto) or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all respects to the
requirements of the Securities Act and the Rules and Regulations and
do not and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that
no representation or warranty is made as to information contained in
or omitted from the Registration Statement or the Prospectus in
reliance upon and in conformity with written information furnished to
the Company through the Representatives by or on behalf of any U.S.
Underwriter specifically for inclusion therein.
(c) The market-related and customer-related data and estimates
included in the Prospectus 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 17) have been duly organized and are validly existing as
corporations 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
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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.
(e) Prior to the delivery of the Stock on the First Delivery
Date, the Company will have an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description thereof
contained in the Prospectus; and (i) approximately 85% of the capital
stock of Cardiovascular Computer Systems, Ltd., (ii) approximately 64%
of the membership interests in L-3 Communications Network Security
Systems LLC, (iii) approximately 92% of the capital stock of Microdyne
Corporation and (iv) 100% of the issued shares of capital stock of
each other subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims, other than (A) liens, encumbrances, equities or
claims described in the Prospectus and (B) such other liens,
encumbrances, equities or claims as are not, individually or in the
aggregate, material to the Company and its subsidiaries, taken as a
whole.
(f) Prior to the delivery of the Stock on the First Delivery
Date, the unissued shares of the Stock to be issued and sold by the
Company to the U.S. Underwriters hereunder and to the International
Managers under the International Underwriting Agreement will have been
duly and validly authorized and, when issued and delivered against
payment therefor as provided herein and in the International
Underwriting Agreement, will be duly and validly issued, fully paid
and non-assessable; and the Stock will conform to the description
thereof contained in the Prospectus.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and L-3 Communications Corporation (the
"Significant Subsidiary").
(h) The execution, delivery and performance of this Agreement and
the International Underwriting Agreement by the Company and the
Significant Subsidiary and the consummation of the transactions
contemplated hereby and thereby will not conflict with or constitute a
breach of, or 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
4
the Company or any of its subsidiaries is bound or to which any of the
property 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 breach of 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 or 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 consideration; and
except for the registration of the Stock and the International Stock
under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the United
States Securities Exchange Act of 1934, as amended (the "Exchange
Act") and applicable state or foreign securities laws in connection
with the purchase and distribution of the Stock by the U.S.
Underwriters and the International Managers, 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 the International
Underwriting Agreement by the Company and the Significant Subsidiary
and the consummation of the transactions contemplated hereby and
thereby.
(i) Except as described in the Prospectus and other than the
Registration Rights Agreement, dated December 11, 1998, among the
Significant Subsidiary and the parties named therein, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right (other than rights which have
been waived or satisfied or rights not exercisable in connection with
the Registration Statement) to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act.
(j) Except as described in the Registration Statement, the
Company has not sold or issued any shares of Common Stock during the
six-month period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act other than shares issued pursuant to employee benefit
plans, qualified stock options plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.
5
(k) Neither the Company nor any of its subsidiaries has incurred,
since the date of the latest audited financial statements included in
the Prospectus, any liability or obligation, direct or contingent, or
entered into any transaction, in each case not in the ordinary course
of business, that is material to the Company and its subsidiaries
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus; 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 Prospectus.
(l) The historical and pro forma financial statements, together
with the related notes, set forth in the Prospectus comply as to form
in all material respects with the requirements of Regulation S-X under
the Securities Act applicable to registration statements on Form S-1
under the Securities Act. The historical financial statements of the
Company fairly present the financial position of the Company (or its
predecessors) at the respective dates indicated and the results of
operations and cash flows of the Company (or its predecessors) for the
respective periods indicated, in accordance with generally accepted
accounting principles consistently applied throughout such periods.
Such pro forma financial statements have been prepared on a basis
consistent with such historical statements of the Company, except for
the pro forma adjustments specified therein, and give effect to
assumptions made on a reasonable basis and in good faith and present
fairly the historical and proposed transactions contemplated by the
Prospectus, this Agreement and the International Underwriting
Agreement. The other financial and statistical information and data
included in the Prospectus, historical and pro forma, have been
derived from the financial records of the Company (or its
predecessors) and, in all material respects, have been prepared on a
basis consistent with such books and records of the Company (or its
predecessor), except as disclosed therein.
(m) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company, whose report appears in the
Prospectus and who have delivered the initial letter referred to in
Section 9(h) hereof, are independent public accountants as required by
the Securities Act and the Rules and Regulations; Ernst & Young LLP
and KPMG LLP, whose reports appear in the Prospectus and who have
delivered the initial letters referred to in Sections 9(i) and 9(j)
hereof, are independent accountants as required by the Securities Act
and the Rules and Regulations; and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have
delivered the initial letters referred to in Section 9(k) hereof, are
independent accountants as required by the Securities Act and the
Rules and Regulations.
(n) The Company and each of its subsidiaries have good and
marketable title to all property (real and personal) described in the
Prospectus as
6
being owned by them, free and clear of all liens, claims, security
interests or other encumbrances except such as are described in the
Prospectus or, to the extent that any such liens, claims, security
interests or other encumbrances would not have a Material Adverse
Effect (individually or in the aggregate) and all the material
property described in the Prospectus as being held under lease by the
Company and its subsidiaries is held by them under valid, subsisting
and enforceable leases, with only such exceptions as would not have a
Material Adverse Effect (individually or in the aggregate).
(o) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, trademarks, service
marks, trade names, copyrights, licenses, inventions, trade secrets
and other rights, and all registrations or applications relating
thereto, described in the Prospectus as being owned by them or
necessary for the conduct of their business, except as such would not
have a Material Adverse Effect (individually or in the aggregate), and
the Company is not aware of any pending or threatened claim to 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).
(p) Except as described in the Prospectus, 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.
(q) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed
as exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations.
(r) No material relationship, direct or indirect, exists between
or among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
except as described in the Prospectus.
(s) 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.
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(t) Except as disclosed in the Prospectus, 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) 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 "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.
(u) 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.
(v) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws or other organizational documents,
(ii) is in default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or
condition contained in any Material Agreement or (iii) is in violation
in any material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may
be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its
business, except as would not, individually or in the aggregate, have
a Material Adverse Effect.
(w) 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.
8
(x) 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.
(y) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the United States
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
(z) All of the representations and warranties of the parties to
the International Underwriting Agreement are true and correct.
2. Representations, Warranties and Agreements of the Selling
Stockholders. Each of the Selling Stockholders severally represents, warrants
and agrees that:
(a) Such Selling Stockholder has, and immediately prior to the
First Delivery Date such Selling Stockholder will have, good and
marketable title to the shares of Stock to be sold by such Selling
Stockholder hereunder and under the International Underwriting
Agreement on such date, free and clear of all liens, encumbrances,
equities or claims except those that may be created by the U.S.
Underwriters; and upon delivery of such shares and payment therefor
pursuant hereto and thereto, good and valid title to such shares, free
and clear of all liens, encumbrances, equities or claims, will pass to
the several U.S. Underwriters and the International Managers.
9
(b) Such Selling Stockholder has placed in custody under a
custody agreement (the "Custody Agreement") with the Company, as
custodian (the "Custodian"), for delivery under this Agreement,
certificates in negotiable form (with signature guaranteed by a
commercial bank or trust company having an office or correspondent in
the United States or a member firm of the New York or American Stock
Exchanges) representing the shares of Stock to be sold by such Selling
Stockholder hereunder.
(c) Such Selling Stockholder has duly executed and delivered a
power of attorney (the "Power of Attorney") appointing the Custodian
and one or more other persons, as attorneys-in-fact, with full power
of substitution, and with full authority (exercisable by any one or
more of them) to execute and deliver this Agreement and to take such
other action as may be necessary or desirable to carry out the
provisions hereof on behalf of such Selling Stockholder.
(d) Such Selling Stockholder has full right, power and authority
to enter into this Agreement, the International Underwriting
Agreement, the Power of Attorney and the Custody Agreement; the
execution, delivery and performance of this Agreement, the
International Underwriting Agreement, the Power of Attorney and the
Custody Agreement by such Selling Stockholder and the consummation by
such Selling Stockholder of the transactions contemplated hereby and
thereby will not conflict with or constitute a breach of, or a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a party
or by which such Selling Stockholder is bound or to which any of the
property or assets of such Selling Stockholder is subject, nor will
such actions result in any violation of the provisions of the charter
or bylaws or the articles of partnership, as applicable, of the
Selling Stockholder or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over such
Selling Stockholder or the property or assets of such Selling
Stockholder; and, except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state or foreign securities laws in connection with
the purchase and distribution of the Stock by the U.S. Underwriters
and the International Managers, 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, the International Underwriting
Agreement, the Power of Attorney or the Custody Agreement by such
Selling Stockholder and the consummation by such Selling Stockholder
of the transactions contemplated hereby and thereby.
(e) The Registration Statement and the Prospectus and any further
amendments or supplements to the Registration Statement or the
Prospectus, when they become effective or are filed with the
Commission, as the case may be, do not and will not, as of the
applicable effective date (as to the Registration
10
Statement and any amendment thereto) and as of the applicable filing
date (as to the Prospectus and any amendment or supplement thereto)
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that this representation
and warranty is made as to information contained in or omitted from
the Registration Statement or the Prospectus under the caption
"Selling Stockholders" relating to such Selling Stockholder.
(f) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the shares of the
Stock.
3. Purchase of the Stock by the U.S. Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 2,800,000 shares of
the Firm Stock and each Selling Stockholder, severally and not jointly, agrees
to sell the number of shares of the Firm Stock set forth opposite its name in
Schedule 2 hereto to the several U.S. Underwriters and each of the U.S.
Underwriters, severally and not jointly, agrees to purchase the number of
shares of the Firm Stock set opposite that U.S. Underwriter's name in Schedule
1 hereto. Each U.S. Underwriter shall be obligated to purchase from the Company
and from each Selling Stockholder that number of shares of the Firm Stock which
represents the same proportion of the number of shares of the Firm Stock to be
sold by the Company and each Selling Stockholder as the number of shares of the
Firm Stock set forth opposite the name of such U.S. Underwriter in Schedule 1
represents of the total number of shares of the Firm Stock to be purchased by
all of the U.S. Underwriters pursuant to this Agreement. The respective
purchase obligations of the U.S. Underwriters with respect to the Firm Stock
shall be rounded among the U.S. Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the U.S. Underwriters an option to
purchase, in whole or in part, the Option Stock. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 5 hereof. Shares of Option Stock shall be
purchased severally for the account of the U.S. Underwriters in proportion to
the number of shares of Firm Stock set opposite the name of such U.S.
Underwriters in Schedule 1 hereto. The respective purchase obligations of each
U.S. Underwriter with respect to the Option Stock shall be adjusted by the
Representatives so that no U.S. Underwriter shall be obligated to purchase
Option Stock other than in 100 share amounts. The price of both the Firm Stock
and any Option Stock shall be $[___] per share.
The Company and the Selling Stockholders shall not be obligated to
deliver any of the Stock to be delivered on any Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein and in the International
Underwriting Agreement.
11
4. Offering of Stock by the U.S. Underwriters.
Upon authorization by the Representatives of the release of the Firm
Stock, the several U.S. Underwriters propose to offer the Firm Stock for sale
upon the terms and conditions set forth in the Prospectus.
Each U.S. Underwriter agrees that, except to the extent permitted by
the Agreement Between U.S. Underwriters and International Managers, it will not
offer or sell any of the Stock outside of the United States.
5. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the office of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 A.M., New York City time, on the third
full business day following the date of this Agreement or at such other date or
place as shall be determined by agreement between the Representatives and the
Company. This date and time are sometimes referred to as the "First Delivery
Date." On the First Delivery Date, the Company and the Selling Stockholders
shall deliver or cause to be delivered certificates representing the Firm Stock
to the Representatives for the account of each U.S. Underwriter against payment
to or upon the order of the Company and the Selling Stockholders of the
purchase price by wire transfer in immediately available funds. Time shall be
of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each U.S. Underwriter
hereunder. Upon delivery, the Firm Stock shall be registered in such names and
in such denominations as the Representatives shall request in writing not less
than two full business days prior to the First Delivery Date. For the purpose
of expediting the checking and packaging of the certificates for the Firm
Stock, the Company and the Selling Stockholders shall make the certificates
representing the Firm Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been
exercised nor later than the fifth business day after the date on which the
option shall have been exercised. The date and time the shares of Option Stock
are delivered are sometimes referred to as a "Second Delivery Date" and the
First Delivery Date and any Second Delivery Date are sometimes each referred to
as a "Delivery Date."
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 5
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New
12
York City time, on such Second Delivery Date. On such Second Delivery Date, the
Company shall deliver or cause to be delivered the certificates representing
the Option Stock to the Representatives for the account of each U.S.
Underwriter against payment to or upon the order of the Company of the purchase
price by wire transfer in immediately available funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each U.S. Underwriter
hereunder. Upon delivery, the Option Stock shall be registered in such names
and in such denominations as the Representatives shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Company shall make the certificates
representing the Option Stock available for inspection by the Representatives
in New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to such Second Delivery Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than Commission's close of business
on the second business day following the execution and delivery of
this Agreement or, if applicable, such earlier time as may be required
by Rule 430A(a)(3) under the Securities Act; to make no further
amendment or any supplement to the Registration Statement or to the
Prospectus except as permitted herein; to advise the Representatives,
promptly (i) after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended
Prospectus has been filed and (ii) if the Company is required to file
a Rule 462(b) Registration Statement after the effectiveness of this
Agreement, when the Rule 462(b) Registration Statement has become
effective and, in the case of each of (i) and (ii), to furnish the
Representatives with copies thereof; to advise the Representatives,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Stock for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification, to use promptly its reasonable best efforts to
obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the U.S. Underwriters a conformed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
13
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request
each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus; and, if the delivery of a prospectus is
required at any time after the Effective Time in connection with the
offering or sale of the Stock or any other securities relating thereto
and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus in order to comply
with the Securities Act, to notify the Representatives and, upon their
request, to file such document and to prepare and furnish (without
charge for the 9 month period following the First Delivery Date) to
each U.S. Underwriter and to any dealer in securities as many copies
as the Representatives may from time to time reasonably request of an
amended or supplemented Prospectus which will correct such statement
or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Representatives and counsel for the U.S.
Underwriters and not to file any such document to which the
Representatives shall reasonably object after having been given
reasonable notice of the proposed filing thereof;
(f) As soon as practicable after the Effective Date, (it being
understood that the Company shall have until at least 410 days after
the end of the Company's current fiscal quarter) to make generally
available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158);
(g) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives 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 general consent to service of process in any
jurisdiction in which it is not now so subject) and to comply with
such laws
14
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 Stock;
(h) For a period of 180 days from the date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell, or otherwise
dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition by any person
at any time in the future of) any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock
(other than the Stock, the International Stock and shares issued
pursuant to currently outstanding options, warrants, rights or
convertible securities), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock
or other securities, in cash or otherwise, in each case without the
prior written consent of ▇▇▇▇▇▇ Brothers Inc.; and to cause each of
the Selling Stockholders, ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
to furnish to the Representatives, prior to the date of the
Prospectus, a letter or letters, in form and substance satisfactory to
counsel for the U.S. Underwriters, pursuant to which each such person
shall agree not to, directly or indirectly, (1) offer for sale, sell,
or otherwise dispose of (or enter into any transaction or device which
is designed to, or could be expected to, result in the disposition by
any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common
Stock or (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether
any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case for a period of 270 days from the date of the
Prospectus except for transactions by any person other than the
Company and its subsidiaries relating to shares of Common Stock or
other securities convertible into or exchangeable or exercisable for
Common Stock acquired in open market transactions after the completion
of the offering of Common Stock described in the Prospectus or sales
by Messrs. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ of up to 100,000 and 200,000 shares of
Common Stock, respectively, at any time and from time to time
beginning 30 days after the Closing Date, without the prior written
consent of ▇▇▇▇▇▇ Brothers Inc.;
(i) To apply the net proceeds from the sale of the Stock being
sold by the Company as set forth in the Prospectus;
(j) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment
company" within the meaning of such term under the United States
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder; and
15
(k) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Shares, to
file a Rule 462(b) Registration Statement with the Commission
registering the Shares not so covered in compliance with Rule 462(b)
by 10:00 A.M., New York City time, on the date following this
Agreement and to pay to the Commission the filing fee for such Rule
462(b) Registration Statement at the time of the filing thereof or to
give irrevocable instructions for the payment of such fee pursuant to
Rule 111(b) under the Securities Act.
7. Further Agreements of the Selling Stockholders. Each Selling
Stockholder agrees:
(a) For a period of 270 days from the date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell or otherwise
dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition by any person
at any time in the future of) any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock
(other than the Stock, the International Stock and shares issued
pursuant to currently outstanding options, warrants, rights or
convertible securities) or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock
or other securities, in cash or otherwise, in each case without the
prior written consent of ▇▇▇▇▇▇ Brothers Inc.;
(b) That the Stock to be sold by such Selling Stockholder
hereunder which is represented by the certificates held in custody for
such Selling Stockholder is subject to the interest of the U.S.
Underwriters, the International Managers and the other Selling
Stockholders, that the arrangements made by such Selling Stockholder
for such custody are to that extent irrevocable except as provided in
the Custody Agreement, and that the obligations of such Selling
Stockholder hereunder shall not be terminated by any act of such
Selling Stockholder, by operation of law or the occurrence of any
other event; and
(c) To deliver to the Representatives prior to the First Delivery
Date a properly completed and executed United States Treasury
Department Form W-8 (if such Selling Stockholder is a non-United
States person) or Form W-9 (if such Selling Stockholder is a United
States person).
8. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable
in that connection; (b) the costs incident to the preparation, printing and
filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto (provided that the U.S. Underwriters and the
International Managers will pay $350,000 of the printing costs of the
Registration Statement); (c) the costs of distributing the Registration
Statement as originally filed
16
and each amendment thereto and any post-effective amendments thereof
(including, in each case, exhibits), any Preliminary Prospectus, the Prospectus
and any amendment or supplement to the Prospectus, all as provided in this
Agreement; (d) the costs of delivering and distributing the Custody Agreement
and the Power of Attorney; (e) the filing fees incident to securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of sale of the Stock; (f) any applicable listing or other fees; (g) the
fees and expenses of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 6(g) and of preparing, printing
and distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the U.S. Underwriters); and (h) all other costs and expenses
incident to the performance of the obligations of the Company and the Selling
Stockholders; provided that (x) the Company and the U.S. Underwriters will bear
their own "road show" expenses and (y) the Company on the one hand, and the
U.S. Underwriters and the International Managers on the other hand, will each
bear one half of the cost of the charter aircraft used in connection with the
"road show" relating to the offering of Common Stock described in the
Prospectus.
9. Conditions of U.S. Underwriters' Obligations. The respective
obligations of the U.S. Underwriters hereunder are subject to the accuracy,
when made and on each Delivery Date, of the representations and warranties of
the Company and the Selling Stockholders contained herein, to the performance
by the Company and the Selling Stockholders of their respective obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied
with; and any 462(b) Registration Statement required by this Agreement
to be filed shall have been so filed and become effective.
(b) No U.S. Underwriter or International Manager shall have
discovered and disclosed to the Company on or prior to such Delivery
Date that the Registration Statement or the Prospectus or any
amendment or supplement thereto contains an untrue statement of a fact
which, in the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the U.S.
Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the
International Underwriting Agreement, the Stock, the Registration
Statement and the Prospectus, and all other legal matters relating to
this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the
U.S. Underwriters, and the Company and the Selling Stockholders shall
have
17
furnished to such counsel all documents and information that they
may reasonably request to enable them to pass upon such matters.
(d) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall have furnished to the
Representatives its written opinion, as counsel to the Company,
addressed to the U.S. Underwriters and dated such Delivery Date, in
form and substance reasonably satisfactory to the Representatives, to
the effect that:
(i) The Company and each of its Delaware subsidiaries have
been duly organized and are validly existing as corporations and
in good standing under the laws of Delaware, and have all
corporate power and authority necessary to conduct their
respective businesses as described in the Registration Statement
and the Prospectus;
(ii) All of the outstanding shares of Common Stock of the
Company (including the shares of Stock and International Stock
being delivered on such Delivery Date) have been duly authorized
and all outstanding shares of Common Stock have been and, upon
payment and delivery in accordance with this Agreement, the Stock
will be validly issued, fully paid and non-assessable; all of the
issued shares of capital stock of each Delaware subsidiary of the
Company have been duly and validly authorized and issued, are
fully paid, and non-assessable (except for directors' qualifying
shares) and, based solely on an examination of each such
subsidiary's stock ledger and minute books, all such shares are
held of record by the Company and/or a subsidiary of the Company;
(iii) The Registration Statement has become effective under
the Securities Act and the Prospectus was filed pursuant to Rule
424(b) of the rules and regulations of the Commission under the
Act and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued or
proceeding for that purpose has been instituted or threatened by
the Commission;
(iv) The statements contained in the Prospectus under the
captions "Risk Factors - A Number of Shares are or Will be
Available for Future Sale", "Risk Factors - Certain Factors may
Delay or Prevent a Change of Control Transaction,"
"Business-Pension Plans," "Certain Relationships and Related
Transactions," "Management-Limitations on Liability and
Indemnification Matters," "Management-1997 Stock Option Plan,"
"Management-Employment Agreements," "Description of Certain
Indebtedness," "Description of Capital Stock" and "Shares
Eligible for Future Sale," insofar as they describe charter
documents, contracts, statutes, rules and regulations and other
legal matters, constitute an accurate summary thereof in all
material respects;
18
(v) The statements made in the Prospectus under the caption
"Certain United States Federal Tax Considerations," 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;
(vi) To such counsel's knowledge, there are no contracts or
documents of a character required by the Securities Act or the
rules and regulations thereunder to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not described or
filed as required by the Securities Act or the rules and
regulations thereunder;
(vii) This Agreement and the International Underwriting
Agreement have each been duly authorized, executed and delivered
by the Company and the Significant Subsidiary;
(viii) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the compliance
by the Company and the Significant Subsidiary, as applicable,
with all of the provisions of this Agreement and the
International Underwriting Agreement and the consummation of the
transactions contemplated hereby and thereby will not breach or
result in a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument filed as
an exhibit to the Registration Statement nor will such actions
violate the Certificate of Incorporation or By-Laws or other
organizational documents of the Company or any of its
subsidiaries or any federal or New York statute, the Delaware
Limited Liability Company Act or the Delaware General Corporation
Law or any rule or regulation that has been issued pursuant to
any federal or New York statute, the Delaware Limited Liability
Company Act or the Delaware General Corporation Law or any order
known to such counsel issued pursuant to any federal or New York
statute, the Delaware Limited Liability Company Act or the
Delaware General Corporation Law by any court or governmental
agency or body or court having jurisdiction over the Company or
any of its subsidiaries or any of their properties 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 Limited Liability Company Act or the
Delaware General Corporation Law or, to such counsel's knowledge,
any federal or New York court or any Delaware court acting
pursuant to the Delaware Limited Liability Company Act or the
Delaware General Corporation Law is required for the issue and
sale of the Stock and International Stock by the Company, except
for the registration under the Act and the Exchange Act
19
of the Stock and the International Stock, 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 Stock and the
International Stock by the U.S. Underwriters and the
International Managers. The opinions set forth in this paragraph
are based upon our consideration of only those statutes, rules
and regulations which, in such counsel's experience, are normally
applicable to securities underwriting transactions.
In rendering such opinion, such counsel may state that its
opinion is limited to matters governed by the federal laws of the
United States and the laws of the State of New York and the
Delaware General Corporation Law.
Such counsel shall also have furnished to the
Representatives a written statement, addressed to the U.S.
Underwriters and dated such Delivery Date stating: Such counsel
has not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration
Statement or the Prospectus and take no responsibility therefor,
except as and to the extent set forth in paragraph (iv) above. In
the course of the preparation by the Company of the Registration
Statement and the Prospectus, such counsel participated in
conferences with certain officers and employees of the Company,
with representatives of PricewaterhouseCoopers LLP, Ernst & Young
LLP, KPMG LLP, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and with counsel to the
Company. Based upon such counsel's examination of the
Registration Statement and the Prospectus, our investigations
made in connection with the preparation of the Registration
Statement and the Prospectus and our participation in the
conferences referred to above, (i) such counsel is of the opinion
that the Registration Statement, as of its effective date, and
the Prospectus, as of February ___, 1999, complied as to form in
all material respects with the requirements of the Act and the
applicable rules and regulations of the Commission thereunder,
except that in each case such counsel need not express opinion
with respect to the financial statements or other financial data
contained or incorporated by reference in the Registration
Statement or the Prospectus, and (ii) such counsel has no reason
to believe that the Registration Statement, as of its effective
date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein
or necessary in order to make the statements therein not
misleading or that the Prospectus contains any untrue statement
of a material fact or omits to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except
that in each case such counsel need not express belief
20
with respect to the financial statements or other financial
data contained in the Registration Statement or the Prospectus.
(e) ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel of the Company, shall
have furnished to the Representatives his written opinion, as General
Counsel to the Company, addressed to the U.S. Underwriters and dated
such Delivery Date, in form and substance reasonably satisfactory to
the Representatives, to the effect that:
(i) Other than as set forth in the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase, nor
any restriction upon the voting or transfer of, any shares of the
Stock pursuant to the Company's charter or by-laws or any
agreement or other instrument known to such counsel;
(ii) To such counsel's knowledge, the Company and each of
its subsidiaries have good and marketable title to all property
(real and personal) described in the Prospectus as being owned by
them, free and clear of all liens, claims, security interests or
other encumbrances except such as are described in the Prospectus
or, to the extent that any such liens, claims, security interests
or other encumbrances would not have a Material Adverse Effect
(individually or in the aggregate) and all the material property
described in the Prospectus as being held under lease by the
Company and its subsidiaries is held by them under valid,
subsisting and enforceable leases, with only such exceptions as
would not have a Material Adverse Effect (individually or in the
aggregate);
(iii) To such counsel's knowledge and except as otherwise
disclosed in the Prospectus, there are no legal or governmental
proceedings pending or threatened, against the Company or any of
its subsidiaries or to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries,
are reasonably likely to cause a Material Adverse Effect;
(iv) To such counsel's knowledge and except as otherwise
disclosed in the Prospectus, there are no contracts, agreements
or understandings between the Company and any person granting
such person the right to require the Company to include such
person's securities in the securities registered pursuant to the
Registration Statement;
(v) None of the issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the compliance
by the Company and the Significant Subsidiary with all of the
provisions of this
21
Agreement and the International Underwriting 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 in this paragraph
(v) may be delivered by other counsel reasonably satisfactory to
the Representatives).
(f) ▇▇▇▇▇▇ ▇. Block, Esq., as counsel for Lockheed ▇▇▇▇▇▇
Corporation and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq., as counsel for the other
Selling Stockholders shall have each furnished to the Representatives
their written opinion, as counsel to such Selling Stockholder,
addressed to the U.S. Underwriters and dated the First Delivery Date,
in form and substance reasonably satisfactory to the Representatives,
to the effect that:
(i) Such Selling Stockholder has full right, power and
authority to enter into this Agreement, the International
Underwriting Agreement, the Power of Attorney and the Custody
Agreement; the execution, delivery and performance of this
Agreement, the International Underwriting Agreement, the Power of
Attorney and the Custody Agreement by such Selling Stockholder
and the consummation by such Selling Stockholder of the
transactions contemplated hereby and thereby will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which such
Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of
such Selling Stockholder is subject, nor will such actions result
in any violation of the provisions of the charter or bylaws or
the articles of partnership, as applicable, of such Selling
Stockholder or any statute or any order, rule or regulation known
to such counsel of any court or governmental agency or body
having jurisdiction over such Selling Stockholder or the property
or assets of such Selling Stockholder; and, except for the
registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state or foreign securities laws in connection with
the purchase and distribution of the Stock by the U.S.
Underwriters and the International Managers, 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,
the International Underwriting Agreement, the Power of Attorney
or the Custody Agreement by such Selling Stockholder and the
consummation by such
22
Selling Stockholder of the transactions contemplated hereby
and thereby;
(ii) This Agreement and the International Underwriting
Agreement has each been duly authorized, executed and delivered
by or on behalf of such Selling Stockholder;
(iii) A Power-of-Attorney and a Custody Agreement have been
duly authorized, executed and delivered by such Selling
Stockholder and constitute valid and binding agreements of such
Selling Stockholder, enforceable in accordance with their
respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating
to or affecting creditors' rights generally, and by general
principles of equity, regardless of whether considered in a
proceeding in equity or at law; and
(iv) Upon physical delivery of the shares of Stock to be
sold by such Selling Stockholder to the U.S. Underwriters and the
International Managers in the State of New York with stock powers
duly endorsed in blank by an effective endorsement and payment
therefor in accordance with the terms of this Agreement and the
International Underwriting Agreement, the U.S. Underwriters and
the International Managers will become the "protected purchaser"
(as defined in Section 8-303(a) of the New York Uniform
Commercial Code) of such shares of Stock, free of any "adverse
claim" (as defined in Section 8-102(a)(1) of the New York Uniform
Commercial Code).
(i) In rendering such opinion, such counsel may state that its
opinion is limited to matters governed by the federal laws of the
United States of America, the laws of the State of New York or the
State of Maryland, as the case may be, and the Delaware General
Corporation Law and (ii) in rendering the opinion in Section 9(f)(iv)
above, rely upon a certificate of such Selling Stockholder in respect
of matters of fact as to ownership of and any adverse liens,
encumbrances, equities or claims on the shares of Stock sold by such
Selling Stockholder, provided that such counsel shall furnish copies
thereof to the Representatives and state that they believe that the
U.S. Underwriters, the International Managers and they are justified
in relying upon such certificate.
(g) The Representatives shall have received from ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the U.S. Underwriters, such opinion or opinions,
dated such Delivery Date, with respect to the issuance and sale of the
Stock, the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
23
(h) At the time of execution of this Agreement, the
Representatives shall have received from PricewaterhouseCoopers LLP a
letter, in form and substance satisfactory to the Representatives,
addressed to the U.S. Underwriters and dated the date hereof (i)
confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission and (ii) stating,
as of the date hereof (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not
more than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information and
other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(i) At the time of execution of this Agreement, the
Representatives shall have received from Ernst & Young LLP letters, in
form and substance satisfactory to the Representatives, addressed to
the U.S. Underwriters and dated the date hereof (i) confirming that
they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five days prior
to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(j) At the time of execution of this Agreement, the
Representatives shall have received from KPMG LLP a letter, in form
and substance satisfactory to the Representatives, addressed to the
U.S. Underwriters and dated the date hereof (i) confirming that they
are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five days prior
to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(k) At the time of execution of this Agreement, the
Representatives shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP letters,
in form and substance satisfactory to the Representatives, addressed
to the U.S. Underwriters and dated
24
the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission and (ii) stating, as of the date hereof (or, with respect
to matters involving changes or developments since the respective
dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date
hereof), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with
registered public offerings.
(l) With respect to the letters referred to in the preceding four
paragraphs and delivered to the Representatives concurrently with the
execution of this Agreement (the "initial letters"), the Company shall
have furnished to the Representatives letters (the "bring-down
letters") of such accountants, in form and substance satisfactory to
the Representatives, addressed to the U.S. Underwriters and dated such
Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letters
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is
given in the Prospectus, as of a date not more than five days prior to
the date of the bring-down letter), the conclusions and findings of
such firms with respect to the financial information and other matters
covered by the initial letters and (iii) confirming in all material
respects the conclusions and findings set forth in the initial
letters.
(m) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board,
its President or a Vice President and its chief financial officer
stating that:
(i) The representations and warranties of the Company in
Section 1 are true and correct as of such Delivery Date; the
Company has complied with all its agreements contained herein;
and the conditions set forth in Sections 9(a) and 9(o) have been
fulfilled; and
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the Effective
Date, the Registration Statement and Prospectus 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
Effective Date no event has occurred which should have been set
forth in a supplement or amendment to the Registration Statement
or the Prospectus.
25
(n) Each of the Selling Stockholders (or the Custodian or one or
more attorneys-in-fact on behalf of each of the Selling Stockholders)
shall have furnished to the Representatives on the First Delivery Date
a certificate, dated the First Delivery Date, signed by, or on behalf
of, each of the Selling Stockholders (or the Custodian or one or more
attorneys-in-fact) stating that the representations and warranties of
each of the Selling Stockholders contained herein are true and correct
as of the First Delivery Date and that each of the Selling
Stockholders has complied with all agreements contained herein to be
performed by each of the Selling Stockholders at or prior to the First
Delivery Date.
(o) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or (ii) since such
date there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or
affecting the business, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause
(i) or (ii), is, in the judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Stock being delivered on
such Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(p) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Company's debt securities by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities.
(q) 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 or the American
Stock Exchange or in 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 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
26
States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political
or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such) as to make
it, in the judgment of a majority in interest of the several U.S.
Underwriters, impracticable or inadvisable to proceed with the public
offering or delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(r) The Representatives shall have received a copy of the
executed Custody Agreement and Power of Attorney from each Selling
Stockholder.
(s) The closing under the International Underwriting Agreement
shall have occurred concurrently with the closing hereunder on the
First Delivery Date.
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 U.S. Underwriters.
10. Indemnification and Contribution.
(a) The Company and the Significant Subsidiary, jointly and
severally, shall indemnify and hold harmless each U.S. Underwriter,
its officers and employees and each person, if any, who controls any
U.S. Underwriter within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and sales of
Stock), to which that U.S. Underwriter, officer, employee or
controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, (ii) the omission or alleged omission
to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any amendment or supplement thereto, or in any
Blue Sky Application any material fact required to be stated therein
or necessary to make the statements therein not misleading or (iii)
any act or failure to act or any alleged act or failure to act by any
U.S. Underwriter in connection with, or relating in any manner to, the
Stock or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or (ii)
above (provided that the Company and the Significant Subsidiary shall
not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly
from any such acts or failures to act undertaken or omitted to be
taken by such U.S. Underwriter through
27
its gross negligence or willful misconduct), and shall reimburse
each U.S. Underwriter and each such officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably
incurred by that U.S. Underwriter, officer, employee or controlling
person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company and
the Significant Subsidiary shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any
such amendment or supplement, in reliance upon and in conformity with
written information concerning such U.S. Underwriter furnished to the
Company through the Representatives by or on behalf of any U.S.
Underwriter specifically for inclusion therein, which information
consists solely of the information specified in Section 10(f);
provided further, that the indemnification contained in this paragraph
(a) with respect to the Preliminary Prospectus shall not inure to the
benefit of any U.S. Underwriter (or to the benefit of any officers or
employees of any U.S. Underwriter or of any person controlling such
U.S. Underwriter) on account of any such loss, claim, damage,
liability or action arising from the sale of Stock by such U.S.
Underwriter to any person if the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained
in the Preliminary Prospectus was corrected in the Prospectus and the
U.S. Underwriter sold Stock to that person without sending or giving
at or prior to the written confirmation of such sale, a copy of the
Prospectus (as then amended or supplemented) if the Company has
previously furnished sufficient copies thereof to the U.S. Underwriter
on a timely basis to permit such sending or giving. The foregoing
indemnity agreement is in addition to any liability which the Company
or the Significant Subsidiary may otherwise have to any U.S.
Underwriter or to any officer, employee or controlling person of that
U.S. Underwriter.
(b) Each Selling Stockholder, severally and not jointly, shall
indemnify and hold harmless each U.S. Underwriter, its officers and
employees and each person, if any, who controls any U.S. Underwriter
within the meaning of Section 15 of the Securities Act, from and
against any loss, claim, damage or liability (including, without
limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim),
or any action in respect thereof (including, but not limited to, any
loss, claim, damage or liability or action relating to purchases and
sales of Stock), to which that U.S. Underwriter, officer, employee or
controlling person may become subject, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto or (ii) the
omission or alleged omission to
28
state in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any amendment or supplement thereto, 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 the omission
or alleged omission relates to information under the caption "Selling
Stockholders" relating to such Selling Stockholder; provided, however,
that the indemnification contained in this paragraph (b) with respect
to the Preliminary Prospectus shall not inure to the benefit of any
U.S. Underwriter (or to the benefit of any officers or employees of
any U.S. Underwriter or of any person controlling such U.S.
Underwriter) on account of any such loss, claim, damage, liability or
action arising from the sale of Stock by such U.S. Underwriter to any
person if the untrue statement or alleged untrue statement or omission
or alleged omission of a material fact contained in the Preliminary
Prospectus was corrected in the Prospectus and the U.S. Underwriter
sold Stock to that person without sending or giving at or prior to the
written confirmation of such sale, a copy of the Prospectus (as then
amended or supplemented) if the Company has previously furnished
sufficient copies thereof to the U.S. Underwriter on a timely basis to
permit such sending or giving. The foregoing indemnity agreement is in
addition to any liability which the Selling Stockholders may otherwise
have to any U.S. Underwriter or any officer, employee or controlling
person of that U.S. Underwriter. Notwithstanding any other provision
of this Section, the liability of each Selling Stockholder under this
Section 10(b) to all such indemnified parties shall not exceed the net
amount received by each such Selling Stockholder (after deducting any
underwriting discount) from the sale of the Stock pursuant to this
Agreement.
(c) Each U.S. Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, the Selling Stockholders, the
officers and employees of the Company, each of the directors of the
Company, and each person, if any, who controls the Company or any
Selling Stockholder within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company or any such director
of the Company, officer of the Company or controlling person of the
Company, or Selling Stockholder or controlling person of any Selling
Stockholder may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or (B) in any Blue Sky Application or
(ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent
that the untrue statement or alleged untrue
29
statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such U.S.
Underwriter furnished to the Company through the Representatives by or
on behalf of that U.S. Underwriter specifically for inclusion therein,
and shall reimburse the Company and any such director of the Company,
officer of the Company or controlling person of the Company, or
Selling Stockholder or controlling person of any Selling Stockholder
for any legal or other expenses reasonably incurred by the Company or
any such director of the Company, officer of the Company or
controlling person of the Company, or Selling Stockholder or
controlling person of any Selling Stockholder 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 U.S. Underwriter may otherwise have to the Company
or any such director of the Company, officer of the Company, employee
of the Company, or controlling person of the Company or Selling
Stockholder or controlling person of any Selling Stockholder.
(d) Promptly after receipt by an indemnified party under this
Section 10 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 10, 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 10 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 10.
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 10 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
30
for such indemnified party to employ separate counsel or (iii)
the indemnifying party has failed to assume the defense of such action
and employ counsel reasonably satisfactory to the indemnified party,
in which case, if such indemnified party notifies the indemnifying
party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not,
in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of
attorneys (in addition to one local counsel) at any time for all such
indemnified parties, which firm shall be designated in writing by
▇▇▇▇▇▇ Brothers Inc., if the indemnified parties under this Section 10
consist of any U.S. Underwriters or any of their respective officers,
employees or controlling persons, or by the Company, if the
indemnified parties under this Section 10 consist of the Company or
any of the Company's directors, officers, employees or controlling
persons, or by the attorney-in-fact under the Power of Attorney, if
the indemnified parties under this Section 10 consist of the Selling
Stockholders or any of their respective officers, employees or
controlling persons, provided that if the Company is the indemnifying
party and a Selling Stockholder is an indemnified party, such firm
shall be designated by such Selling Stockholder rather than the
attorney-in-fact. 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.
(e) If the indemnification provided for in this Section 10 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 10(a), 10(b) or 10(c) 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, the Significant Subsidiary or the Selling
Stockholders on the one hand and the U.S. Underwriters on the other
from the offering of the Stock or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company, the Significant Subsidiary or the Selling Stockholders, on
the one hand
31
and the U.S. Underwriters on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the
Company, the Significant Subsidiary or the Selling Stockholders, on
the one hand and the U.S. Underwriters on the other with respect to
such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this
Agreement (before deducting expenses) received by the Company, the
Significant Subsidiary or the Selling Stockholders, on the one hand,
and the total underwriting discounts and commissions received by the
U.S. Underwriters with respect to the shares of the Stock purchased
under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the shares of the Stock under this
Agreement, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company, the Significant Subsidiary, the
Selling Stockholders or the U.S. Underwriters, the intent of the
parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. For
purposes of the preceding two sentences, the net proceeds deemed to be
received by the Company shall be deemed to be also for the benefit of
the Significant Subsidiary and information supplied by the Company
shall also be deemed to have been supplied by the Significant
Subsidiary. The Company, the Significant Subsidiary, the Selling
Stockholders and the U.S. Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 10 were to be
determined by pro rata allocation (even if the U.S. Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability,
or action in respect thereof, referred to above in this Section 10
shall be deemed to include, for purposes of this Section 10(e), 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 10(e), no U.S.
Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Stock underwritten by
it and distributed to the public was offered to the public exceeds the
amount of any damages which such U.S. Underwriter 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
32
be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The U.S. Underwriters' obligations
to contribute as provided in this Section 10(e) are several in
proportion to their respective underwriting obligations and not joint.
(f) The U.S. Underwriters severally confirm and the Company and
the Significant Subsidiary acknowledge that the statements with
respect to the public offering of the Stock by the U.S. Underwriters
and the last sentence of the first paragraph on the cover page of, the
legend concerning stabilization on page (i) of, and the fourth,
seventh, ninth, fifteenth, twentieth, twenty-first and twenty-third
paragraphs and the stabilization language in paragraphs ten through
thirteen under the caption "Underwriting" in, the Prospectus are
correct and constitute the only information concerning such U.S.
Underwriters furnished in writing to the Company by or on behalf of
the U.S. Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
11. Defaulting U.S. Underwriters.
If, on either Delivery Date, any U.S. Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting U.S. Underwriters shall be obligated to purchase the Stock which
the defaulting U.S. Underwriter agreed but failed to purchase on such Delivery
Date in the respective proportions which the number of shares of the Firm Stock
set opposite the name of each remaining non-defaulting U.S. Underwriter in
Schedule 1 hereto bears to the total number of shares of the Firm Stock set
opposite the names of all the remaining non-defaulting U.S. Underwriters in
Schedule 1 hereto; provided, however, that the remaining non-defaulting U.S.
Underwriters shall not be obligated to purchase any of the Stock on such
Delivery Date if the total number of shares of the Stock which the defaulting
U.S. Underwriter or U.S. Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of shares of the Stock to be purchased
on such Delivery Date, and any remaining non-defaulting U.S. Underwriter shall
not be obligated to purchase more than 110% of the number of shares of the
Stock which it agreed to purchase on such Delivery Date pursuant to the terms
of Section 3. If the foregoing maximums are exceeded, the remaining
non-defaulting U.S. Underwriters, or those other underwriters satisfactory to
the Representatives who so agree, shall have the right, but shall not be
obligated, to purchase, in such proportion as may be agreed upon among them,
all the Stock to be purchased on such Delivery Date. If the remaining U.S.
Underwriters or other underwriters satisfactory to the Representatives do not
elect to purchase the shares which the defaulting U.S. Underwriter or U.S.
Underwriters agreed but failed to purchase on such Delivery Date, this
Agreement (or, with respect to the Second Delivery Date, the obligation of the
U.S. Underwriters to purchase, and of the Company to sell, the Option Stock)
shall terminate without liability on the part of any non-defaulting U.S.
Underwriter or the Company or the Selling Stockholders, except that the Company
and the Significant Subsidiary will continue to be liable for the payment of
expenses to the extent set forth in Sections 8 and 13. As used in this
Agreement, the term "U.S. Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who,
33
pursuant to this Section 11, purchases Firm Stock which a defaulting U.S.
Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting U.S. Underwriter
of any liability it may have to the Company and the Selling Stockholders for
damages caused by its default. If other underwriters are obligated or agree to
purchase the Stock of a defaulting or withdrawing U.S. Underwriter, either the
Representatives or the Company may postpone the Delivery Date for up to seven
full business days in order to effect any changes that in the opinion of
counsel for the Company or counsel for the U.S. Underwriters may be necessary
in the Registration Statement, the Prospectus or in any other document or
arrangement.
12. Termination. The obligations of the U.S. Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company and the Selling Stockholders prior to delivery of and payment for the
Firm Stock if, prior to that time, any of the events described in Sections
9(o), 9(p) or 9(q), shall have occurred or if the U.S. Underwriters shall
decline to purchase the Stock for any reason permitted under this Agreement.
13. Reimbursement of U.S. Underwriters' Expenses. If (a) the Company
or the Selling Stockholders shall fail to tender the Stock for delivery to the
U.S. Underwriters by reason of any failure, refusal or inability on the part of
the Company or any Selling Stockholder to perform any agreement on its part to
be performed, or because any other condition of the U.S. Underwriters'
obligations hereunder required to be fulfilled by the Company or the Selling
Stockholders is not fulfilled, the Company and the Significant Subsidiary will
reimburse the U.S. Underwriters for all reasonable out-of-pocket expenses
(including fees and disbursements of counsel) incurred by the U.S. Underwriters
in connection with this Agreement and the proposed purchase of the Stock, and
upon demand the Company and the Significant Subsidiary shall pay the full
amount thereof to the Representative(s). If this Agreement is terminated
pursuant to Section 11 by reason of the default of one or more U.S.
Underwriters, the Company and the Significant Subsidiary shall not be obligated
to reimburse any defaulting U.S. Underwriter on account of those expenses.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the U.S. Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy, in the case of any notice
pursuant to Section 10(d), to the Director of Litigation, Office of
the General Counsel, ▇▇▇▇▇▇ Brothers Inc., Three World Financial
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇;
(b) if to the Company or to the Significant Subsidiary, shall be
delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Registration Statement,
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
34
(c) if to any Selling Stockholder, shall be delivered or sent by
mail, telex or facsimile transmission to such Selling Stockholder at
the address set forth in the Custody Agreement executed by such
Selling Stockholder;
provided, however, that any notice to an U.S. Underwriter pursuant to Section
10(d) shall be delivered or sent by mail, telex or facsimile transmission to
such U.S. Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by
the Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and
the Selling Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the U.S. Underwriters
by ▇▇▇▇▇▇ Brothers Inc. on behalf of the Representatives and the Company and
the U.S. Underwriters shall be entitled to act and rely on any request,
consent, notice or agreement given or made on behalf of the Selling
Stockholders by the Custodian.
15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the U.S. Underwriters, the Company,
the Significant Subsidiary, the Selling Stockholders 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 Selling Stockholders
contained in this Agreement shall also be deemed to be for the benefit of the
person or persons, if any, who control any U.S. Underwriter within the meaning
of Section 15 of the Securities Act and for the benefit of each International
Manager (and controlling persons thereof) who offers or sells any shares of
Common Stock in accordance with the terms of the Agreement Between U.S.
Underwriters and International Managers and (B) the indemnity agreement of the
U.S. Underwriters contained in Section 10(c) of this Agreement shall be deemed
to be for the benefit of directors of the Company, officers of the Company who
have signed the Registration Statement and any person controlling the Company
within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 15, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
16. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Significant Subsidiary, the Selling
Stockholders and the U.S. Underwriters 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 Stock 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.
17. 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.
35
18. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK.
19. 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.
20. 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]
36
If the foregoing correctly sets forth the agreement among the Company,
the Significant Subsidiary, the Selling Stockholders and the U.S. Underwriters,
please indicate your acceptance in the space provided for that purpose below.
Very truly yours,
L-3 COMMUNICATIONS HOLDINGS, INC.
By:
------------------------------
Name:
Title:
L-3 COMMUNICATIONS CORPORATION,
the Significant Subsidiary
By:
------------------------------
Name:
Title:
THE SELLING STOCKHOLDERS NAMED IN
SCHEDULE 2 TO THIS AGREEMENT
By: ATTORNEY-IN-FACT
By:
------------------------------
Name:
Title:
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇.▇. ▇▇▇▇▇▇▇▇▇, TOWBIN
For themselves and as Representatives
of the several U.S. Underwriters named
in Schedule 1 hereto
By: ▇▇▇▇▇▇ BROTHERS INC.
By:
--------------------------------
Authorized Representative
SCHEDULE 1
Number of
U.S. Underwriters Shares
----------------- ------
▇▇▇▇▇▇ Brothers Inc.....................................
Bear, ▇▇▇▇▇▇▇ & Co. Inc.................................
Credit Suisse First Boston Corporation
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated..........................................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇.▇. ▇▇▇▇▇▇▇▇▇, Towbin..................................
---------
Total 7,400,000
=========
SCHEDULE 2
NUMBER OF
SELLING STOCKHOLDERS SHARES
-------------------- ------
Lockheed ▇▇▇▇▇▇ Corporation.............................
▇▇▇▇▇▇ Brothers Capital Partners III, L.P...............
LB I Group Inc. ........................................
▇▇▇▇▇▇ Brothers MBG Partners 1997 (A) L.P...............
▇▇▇▇▇▇ Brothers MBG Partners 1997 (B) L.P...............
---------
Total.............................................. 4,600,000
=========
FORM OF LOCK-UP LETTER AGREEMENT
▇▇▇▇▇▇ BROTHERS INC.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇.▇. ▇▇▇▇▇▇▇▇▇, TOWBIN
As Representatives of the
several U.S. underwriters
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
BEAR, ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INTERNATIONAL LIMITED
▇.▇. ▇▇▇▇▇▇▇▇▇, TOWBIN
As Representatives of the
several international managers
c/▇ ▇▇▇▇▇▇ BROTHERS INC.
Three World Financial Center
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned understands that you and certain other firms propose
to enter into underwriting agreements (the "Underwriting Agreements") providing
for the purchase by you and such other firms (collectively, the "Underwriters")
of shares (the "Shares") of Common Stock, par value $.01 per share (the "Common
Stock"), of L-3 Communications Holdings, Inc. (the "Company") and that the
Underwriters propose to reoffer the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreements by
the Underwriters, and for other good and valuable consideration, the
undersigned hereby irrevocably agrees that, without the prior written consent
of ▇▇▇▇▇▇ Brothers Inc., the undersigned will not, directly or indirectly, (1)
offer for sale, sell, or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock
(including, without limitation, shares of Common Stock that may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common
Stock that may be issued upon exercise of any option or warrant) or securities
convertible into or exchangeable or exercisable for Common Stock (other than
the Shares) owned by the undersigned on the date of execution of this Lock-Up
Letter Agreement or on the date of the completion of the Offering, or (2) enter
into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, for a period of _____ days
after the date of the final Prospectus relating to the Offering except in each
case for transactions by any person other than the Company relating to shares
of Common Stock or other securities convertible into or exchangeable or
exercisable for Common Stock acquired in open market transactions after the
completion of the Offering.
In furtherance of the foregoing, the Company and its Transfer Agent
are hereby authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if the Company or the Selling Stockholders
notifies you that it does not intend to proceed with the Offering, if the
Underwriting Agreement does not become effective, or if the Underwriting
Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Shares, we
will be released from our obligations under this Lock-Up Letter Agreement.
It is further understood that the Company and the Underwriters have
represented to the undersigned that each Selling Stockholder and certain
officers and directors of the Company shall be required to execute a Lock-Up
Letter Agreement the terms of which are identical to those contained herein.
The Underwriters and/or the Company will immediately notify the undersigned if
any such Lock-Up Letter Agreement is modified, amended, waived or terminated in
a manner so as to impose less stringent restrictions upon the person to which
such Lock-Up Letter Agreement applies as well as the nature of any such
modification, amendment, waiver or termination and this Lock-Up Letter
Agreement shall be deemed to have been modified, amended, waived or terminated
in the same manner as of the same effective date and time.
The undersigned understands that the Company, the Selling Stockholders
and the Underwriters will proceed with the Offering in reliance on this Lock-Up
Letter Agreement.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this Lock-Up Letter Agreement and
that, upon request, the undersigned will execute any additional documents
necessary in connection with the enforcement hereof. Any obligations of the
undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
By:
-------------------------------------
Name:
Title:
Dated:
----------------------------