Exh 10.34
Purchase Agreement dated November 21, 2000
$250,000,000
L-3 COMMUNICATIONS HOLDINGS, INC.
5 1/4% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2009
PURCHASE AGREEMENT
November 16, 2000
▇▇▇▇▇▇ BROTHERS INC.
Three World Financial Center
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
L-3 Communications Holdings, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
$250,000,000 in aggregate principal amount of its 5 1/4% Convertible Senior
Subordinated Notes due 2009 (the "Firm Notes") to ▇▇▇▇▇▇ Brothers Inc. (the
"Initial Purchaser"). In addition, the Company proposes to grant to the Initial
Purchaser an option (the "Option") to purchase up to an additional $50,000,000
in aggregate principal amount of 5 1/4% Convertible Senior Subordinated Notes
due 2009 to cover over-allotments, if any (the "Optional Notes" and, together
with the Firm Notes, the "Notes").
The Notes will be convertible into fully paid, nonassessable shares of
common stock of the Company, par value $0.01 per share (the "Common Stock"), on
the terms, and subject to the conditions, set forth in the Indenture. As used
herein, "Conversion Shares" means the shares of Common Stock into which the
Notes are convertible. The Notes will be issued pursuant to an indenture (the
"Indenture") to be dated as of the First Delivery Date (as defined in Section
2(a)), between the Company and The Bank of New York, as Trustee (the "Trustee").
The Company's obligations under the Notes, including the due and punctual
payment of interest on the Notes, will be unconditionally guaranteed (the
"Guarantees") by certain of the present domestic subsidiaries of the Company,
including, as of this date, L-3 Communications Corporation, Hygienetics
Environmental Services, Inc., a Delaware corporation, L-3 Communications ILEX
Systems, Inc, a Delaware corporation, L-3 Communications Aydin Corporation, a
Delaware corporation, MPRI, Inc., a Delaware corporation, L-3 Communications SPD
Technologies, Inc., a Delaware corporation, SPD Holdings, Inc., a Delaware
corporation, SPD Electrical Systems, Inc., a Delaware corporation, SPD
Switchgear, Inc., a Delaware corporation, Pac Ord, Inc., a Delaware corporation,
▇▇▇▇▇▇▇▇, Inc., a Delaware corporation, Power Paragon, Inc., a Delaware
corporation, L-3 Communications ESSCO, Inc., a Delaware corporation
(individually a "Delaware Guarantor" and collectively, the "Delaware
Guarantors"), and Electrodynamics, Inc., an Arizona Corporation, Interstate
Electronics Corporation, a California Corporation, Southern California Microwave
Inc, a California corporation, L-3 Communications Storm Control Systems, Inc., a
California corporation, L-3 Communications DBS Microwave, Inc., a California
corporation and Microdyne Corporation, a Maryland corporation (individually a
"Non-Delaware Guarantor," collectively the "Non-Delaware Guarantors" and,
together with the Delaware Guarantors, the "Guarantors"). As used herein, the
term "Notes" shall include the Guarantees thereof by the Guarantors, unless the
context otherwise requires.
The Notes will be offered and sold to the Initial Purchaser without being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
in reliance upon an exemption therefrom. Holders of the Notes (including the
Initial Purchaser and its direct and indirect transferees) will be entitled to
the benefits of a Resale Registration Rights Agreement, dated the First Delivery
Date, between the Company and the Initial Purchaser (the "Registration Rights
Agreement"), pursuant to which the Company will agree to file with the
Securities and Exchange Commission (the "Commission") a registration statement
pursuant to Rule 415 under the Securities Act (the "Registration Statement")
covering the resale of the Notes and the Conversion Shares, and to use its best
efforts to cause the Registration Statement to be declared effective.
This Agreement, the Indenture, the Notes and the Registration Rights
Agreement are referred to herein collectively as the "Operative Documents."
This is to confirm the agreement between the Company and the Initial
Purchaser concerning the issue, offer and sale of the Notes.
1. Representations, Warranties and Agreements of the Company and the
Guarantors. The Company and the Guarantors represent, warrant to and agree with,
the Initial Purchaser that:
(a) The Company and the Guarantors have prepared an offering memorandum
dated November 16, 2000 (the "Offering Memorandum") setting forth information
concerning the Company, the Notes, the Guarantees, the Registration Rights
Agreement and the Common Stock. Copies of the Offering Memorandum will be
delivered by the Company to the Initial Purchaser pursuant to the terms of this
Agreement. As used in this Agreement, "Offering Memorandum" means the Offering
Memorandum as amended or supplemented. The Offering Memorandum did not as of its
date, and will not as of a Delivery Date (as defined in Section 2(b)), contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that no
representation or warranty is made as to information contained in or omitted
from the Offering Memorandum in reliance upon and in conformity with written
information furnished to the Company by ▇▇▇▇▇▇ Brothers Inc. specifically for
inclusion therein;
(b) Assuming the accuracy of the representations and warranties of the
Initial Purchaser contained in Section 6 and their compliance with the
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Notes to the Initial Purchaser and the offer, resale
and delivery of the Notes by the Initial Purchaser in the manner contemplated by
this Agreement, the Indenture, the Registration Rights Agreement and the
Offering Memorandum, to register the Notes or the Conversion Shares under the
Securities Act or to qualify the Indenture under the Trust Indenture Act;
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(c) The market-related and customer-related data and estimates included in
the Offering Memorandum are based on or derived from sources which the Company
believes to be reliable and accurate;
(d) The Company and each of its subsidiaries (as defined in Section 14)
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
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) The Company has an authorized capitalization as set forth in the
Offering Memorandum, and all of the issued and outstanding 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
Offering Memorandum; and 100% of the issued shares of capital stock of each
Guarantor 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 Offering Memorandum, (B) a pledge of such shares to
secure the Senior Credit Facilities (as described in the Offering Memorandum)
and (C) 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) The Conversion Shares which are authorized on the date hereof have been
duly and validly authorized and reserved for issuance upon conversion of the
Notes and are free of preemptive rights; and all Conversion Shares, when so
issued and delivered upon such conversion in accordance with the terms of the
Indenture, will be duly and validly authorized and issued, fully paid and
non-assessable and free and clear of all liens, encumbrances, equities or
claims;
(g) This Agreement has been duly authorized, executed and delivered by the
Company and the Guarantors;
(h) Except as disclosed in the Offering Memorandum under the heading
"Description of the Notes--Interest Rate Adjustments," the execution, delivery
and performance of this Agreement, the Registration Rights Agreement and the
Indenture by the Company and the Guarantors and the consummation of the
transactions contemplated hereby and thereby, and the
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issuance and delivery of the Notes and the Conversion Shares will not conflict
with, constitute or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the properties or assets of the Company
or any of its subsidiaries is subject that is material to the financial
condition or prospects of the Company and its subsidiaries, taken as a whole
(collectively, the "Material Agreements"), except for 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, 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 (i)
with respect to the transactions contemplated by the Registration Rights
Agreement as may be required under the Securities Act, the Trust Indenture Act
and the rules and regulations promulgated thereunder, (ii) as required by state
securities or "blue sky" laws, 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 the Operative Documents
by the Company, and the consummation of the transactions contemplated hereby and
thereby. No qualification of the Indenture under the Trust Indenture Act of
1939, as amended (the "1939 Act"), is required in connection with the sale of
the Notes by the Initial Purchaser;
(i) The Company and the Guarantors have all necessary corporate right,
power and authority to execute and deliver this Agreement and perform their
obligations hereunder; and this Agreement and the transactions contemplated
hereby have been duly authorized, executed and delivered by the Company and the
Guarantors;
(j) The Company has all necessary corporate right, power and authority to
execute and deliver the Indenture and perform its obligations thereunder; the
Indenture has been duly authorized by the Company, and upon the effectiveness of
the Registration Statement, will be qualified under the Trust Indenture Act; on
the First Delivery Date (as defined below in Section 2(a)), the Indenture will
have been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery of the Indenture by the Trustee, will
constitute a legally valid and binding agreement of the Company enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, subject
to general principles of equity and to limitations on availability of equitable
relief, including specific performance (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing; and
the Indenture will conform in all material respects to the description thereof
contained in the Offering Memorandum;
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(k) The Company has all necessary corporate right, power and authority to
execute and deliver the Registration Rights Agreement and perform its
obligations thereunder; the Registration Rights Agreement and the transactions
contemplated thereby have been duly authorized by the Company; when the
Registration Rights Agreement is duly executed and delivered by the Company
(assuming due authorization, execution and delivery by the Initial Purchaser),
it will be a legally valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, subject to general principles of equity and to
limitations on availability of equitable relief, including specific performance
(whether considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing, and except with respect to the rights of
indemnification and contribution thereunder, where enforcement thereof may be
limited by federal or state securities laws or the policies underlying such
laws; and the Registration Rights Agreement will conform in all material
respects to the description thereof contained in the Offering Memorandum;
(l) The Company has all necessary corporate right, power and authority to
execute, issue and deliver the Notes and perform its obligations thereunder; the
Notes have been duly and validly authorized by the Company and when duly
executed by the Company in accordance with the terms of the Indenture and,
assuming due authentication of the Notes by the Trustee, upon delivery to the
Initial Purchaser against payment therefor in accordance with the terms hereof,
will constitute valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) or an implied covenant of good faith and fair
dealing; and the Notes, when issued and delivered, will conform in all material
respects to the description thereof contained in the Offering Memorandum;
(m) The Guarantees have been duly and validly authorized by the Guarantors
and when duly endorsed on the Notes in accordance with the terms of the
Indenture and, assuming due authentication of the Notes by the Trustee, upon
delivery to the Initial Purchaser against payment therefor in accordance with
the terms hereof, will constitute valid and binding obligations of each of the
Guarantors entitled to the benefits of the Indenture and enforceable in
accordance with their terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principals (whether considered in a proceeding in equity or at law) or an
implied covenant of good faith and fair dealing;
(n) Except (1) as described in the Offering Memorandum, (2) as provided in
the Registration Rights Agreement dated the First Delivery Date, (3) in respect
of the obligation to deliver freely "tradable shares" to the sellers in
connection with the acquisition of the ILEX Systems, Inc. business and (4) other
than the Registration Rights Agreement, dated December 11,
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1998, among the L-3 Communications Corporation 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 Offering
Memorandum) to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities in any
securities being registered pursuant to any registration statement filed by the
Company under the Securities Act;
(o) Except as described in the Offering Memorandum, the Company and the
Guarantors have not sold or issued any Securities with terms that are
substantially similar to the Notes and the Guarantees during the six-month
period preceding the date of the Offering Memorandum, including any sales
pursuant to Rule 144A under, or Regulations D or S of, the Securities Act other
than shares issued pursuant to employee benefit plans, qualified stock option
plans or other employee compensation plans or pursuant to outstanding options,
rights or warrants;
(p) Neither the Company nor any of its subsidiaries has incurred, since the
date of the latest audited financial statements included or incorporated by
reference in the Offering Memorandum, any liability or obligation, direct or
contingent, or entered into any transaction, in each case not in the ordinary
course of business, that is material to the Company and its subsidiaries taken
as a whole, otherwise than as set forth or contemplated in the Offering
Memorandum; and, since such date, there has not been any material change in the
capital stock or material increase in the short-term or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or any
development involving or which would reasonably be expected to involve a
Material Adverse Effect, otherwise than as described or contemplated in the
Offering Memorandum;
(q) The historical and pro forma financial statements, together with the
related notes, set forth or incorporated by reference in the Offering Memorandum
comply as to form in all material respects with the requirements of Regulation
S-X under the Securities Act, except as disclosed in the Offering Memorandum.
The historical financial statements of the Company present fairly the financial
condition and results of operations of the entities purported to be shown
thereby, at the dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the periods involved;
(r) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company, whose report appears in the Offering Memorandum or is
incorporated by reference therein and who have delivered the initial letter
referred to in Section 5(n) hereof, are independent public accountants as
required by the Securities Act and the Rules and Regulations promulgated
thereunder during the periods covered by the financial statements on which they
reported contained or incorporated in the Offering Memorandum;
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(s) The Company and each of its subsidiaries have good and marketable title
to all property (real and personal) described in the Offering Memorandum as
being owned by them, free and clear of all liens, claims, security interests or
other encumbrances except such as are described in the Offering Memorandum or,
to the extent that any such liens, claims, security interests or other
encumbrances would not have a Material Adverse Effect (individually or in the
aggregate) and all the material property described in the Offering Memorandum as
being held under lease by the Company and its subsidiaries is held by them under
valid, subsisting and enforceable leases, with only such exceptions as would not
have a Material Adverse Effect (individually or in the aggregate);
(t) The Company and each of its subsidiaries own or possess adequate rights
to use all material patents, trademarks, service marks, trade names, copyrights,
licenses, inventions, trade secrets and other rights, and all registrations or
applications relating thereto, described in the Offering Memorandum as being
owned by them or necessary for the conduct of their business, except as such
would not have a Material Adverse Effect (individually or in the aggregate), and
the Company is not aware of any pending or threatened claim to the contrary or
any pending or threatened challenge by any other person to the rights of the
Company and its subsidiaries with respect to the foregoing which, if determined
adversely to the Company and its subsidiaries, would have a Material Adverse
Effect (individually or in the aggregate);
(u) Except as described in the Offering Memorandum, 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;
(v) No material relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, except as described in
the Offering Memorandum;
(w) 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;
(x) Except as disclosed in the Offering Memorandum, the Company is in
compliance in all material respects with all presently applicable provisions of
the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no "reportable
event" (as defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) subject to Title IV of ERISA for which the Company would have
any material liability; the Company has not incurred and does not expect to
incur any material liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any such "pension plan" or (ii) Sections 412
or 4971 of the Internal Revenue
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Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code") (other than contributions in the normal
course which are not in default); and each such "pension plan" for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would reasonably be
expected to cause the loss of such qualification;
(y) 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;
(z) Except as disclosed in the Offering Memorandum under the heading
"Description of the Notes--Interest Rate Adjustments," 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;
(aa) 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;
(bb) 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
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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;
(cc) 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;
(dd) When the Notes are issued and delivered pursuant to this Agreement,
such Notes will not be of the same class (within the meaning of Rule 144A under
the Securities Act) as securities of the Company that are listed on a national
securities exchange registered under Section 6 of the Securities Exchange Act of
1934, as amended (the "Exchange Act") or that are quoted in a U.S. automated
inter-dealer quotation system;
(ee) Neither the Company nor any of its affiliates (as defined in Rule
501(b) of Regulation D under the Securities Act ("Regulation D")) (other than
the Initial Purchaser, about which no representation is made by the Company),
has, directly or through an agent, engaged in any form of general solicitation
or general advertising in connection with the offering of the Notes (as those
terms are used in Regulation D) under the Securities Act or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act; the Company has not entered into any contractual arrangement with respect
to the distribution of the Notes except for this Agreement and the Company will
not enter into any such arrangement;
(ff) Neither the Company nor any of its affiliates (other than the Initial
Purchaser, about which no representation is made by the Company), has, directly
or through any agent, sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any "security" (as defined in the Securities
Act) which is or will be integrated with the sale of the Notes in a manner that
would require the registration under the Securities Act of the Notes; and
(gg) The Company has not taken, directly or indirectly, any action designed
to cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company in connection with the offering of the Notes.
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2. Purchase, Sale and Delivery of the Notes.
(a) The Company and the Guarantors hereby agree, on the basis of the
representations, warranties and agreements of the Initial Purchaser contained
herein and subject to all the terms and conditions set forth herein, to issue
and sell to the Initial Purchaser and, upon the basis of the representations,
warranties and agreements of the Company and the Guarantors herein contained and
subject to all the terms and conditions set forth herein, each Initial Purchaser
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 97.25% of the principal amount thereof, the principal amount of Notes
set forth opposite the name of the Initial Purchaser in Schedule I hereto. The
Company and the Guarantors shall not be obligated to deliver any of the
securities to be delivered hereunder except upon payment for all of the
securities to be purchased as provided herein.
Delivery of and payment for the Firm Notes shall be made at the office of
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. (New
York time) on November 21, 2000, or such later date as the Initial Purchaser
shall designate, which date and time may be postponed by agreement between the
Initial Purchaser and the Company or as provided in Section 8 (such date and
time of delivery and payment for the Firm Notes being herein called the "First
Delivery Date"). Delivery of the Firm Notes shall be made to the Initial
Purchaser against payment of the purchase price by the Initial Purchaser.
Payment for the Firm Notes shall be effected either by wire transfer of
immediately available funds to an account with a bank in The City of New York,
the account number and the ABA number for such bank to be provided by the
Company to the Initial Purchaser at least two business days in advance of the
First Delivery Date, or by such other manner of payment as may be agreed by the
Company and the Initial Purchaser.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants the
Option to the Initial Purchaser to purchase the Optional Notes at the same price
as the Initial Purchaser shall pay for the Firm Notes and the principal amount
of the Optional Notes to be sold to the Initial Purchaser shall be that
principal amount which bears the same ratio to the aggregate principal amount of
Optional Notes being purchased as the principal amount of Firm Notes set forth
opposite the name of the Initial Purchaser in Schedule I hereto (or such number
increased as set forth in Section 8). The Option may be exercised only to cover
over-allotments in the sale of the Firm Notes by the Initial Purchaser. The
Option may be exercised once in whole or in part at any time not more than 30
days subsequent to the date of this Agreement upon notice in writing or by
facsimile by the Initial Purchaser to the Company setting forth the amount
(which shall be an integral multiple of $1,000) of Optional Notes as to which
the Initial Purchaser is exercising the Option.
The date for the delivery of and payment for the Optional Notes, being
herein referred to as an "Optional Delivery Date," which may be the First
Delivery Date (the First Delivery Date and the Optional Delivery Date, if any,
being sometimes referred to as a "Delivery
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Date"), shall be determined by the Initial Purchaser but shall not be later
than five full business days after written notice of election to purchase
Optional Notes is given. Delivery of the Optional Notes shall be made to the
Initial Purchaser against payment of the purchase price by the Initial
Purchaser. Payment for the Optional Notes shall be effected either by wire
transfer of immediately available funds to an account with a bank in the City of
New York, the account number and the ABA number for such bank to be provided by
the Company to the Initial Purchaser at least two business days in advance of
the Optional Delivery Date, or by such other manner of payment as may be agreed
by the Company and the Initial Purchaser.
(c) The Company will deliver against payment of the purchase price (a) the
Notes initially sold to qualified institutional buyers ("QIBs"), as defined in
Rule 144A under the Securities Act ("Rule 144A") in the form of one or more
permanent global certificates (the "Global Notes"), registered in the name of
Cede & Co., as nominee for The Depository Trust Company ("DTC") and (b) the
Notes initially sold to "non-U.S. persons" outside the United States in
compliance with Regulation S under the Securities Act, in the form of one or
more Global Notes, registered in the name of Cede & Co., as nominee for DTC.
Beneficial interests in the Notes initially sold to QIBs will be shown on, and
transfers thereof will be effected only through, records maintained in
book-entry form by DTC and its participants.
The Global Notes will be made available, at the request of the Initial
Purchaser, for inspection at least 24 hours prior to such Delivery Date. The
Certificated Notes will be made available, at the request of the Initial
Purchaser, for checking at least 48 hours prior to such Delivery Date.
(d) Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligations
of the Initial Purchaser hereunder.
3. Further Agreements of the Company. The Company agrees with the Initial
Purchaser as follows:
(a) To advise the Initial Purchaser promptly of any proposal to amend or
supplement the Offering Memorandum and not to effect any such amendment or
supplement without the consent of the Initial Purchaser. If, at any time prior
to completion of the resale of the Notes by the Initial Purchaser, any event
shall occur or condition exist as a result of which it is necessary to amend or
supplement the Offering Memorandum in order that the Offering Memorandum will
not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, to promptly notify the Initial Purchaser and prepare, subject to the
first sentence of this Section 3(a), such amendment or supplement as may be
necessary to correct such untrue statement or omission;
11
(b) To furnish to the Initial Purchaser and to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to
the Initial Purchaser, copies of the Offering Memorandum and the Offering
Memorandum (and all amendments and supplements thereto) in each case as soon as
available and in such quantities as the Initial Purchaser reasonably requests
for internal use and for distribution to prospective purchasers; and to furnish
to the Initial Purchaser on the date hereof four copies of the Offering
Memorandum signed by duly authorized officers of the Company, one of which will
include the independent auditors' reports therein manually signed by such
independent auditors. The Company will pay the expenses of printing and
distributing to the Initial Purchaser all such documents;
(c) To use its reasonable efforts to take such action as the Initial
Purchaser may reasonably request from time to time, to qualify the Notes for
offering and sale under the securities laws of such jurisdictions as the Initial
Purchaser may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions in the United
States for as long as may be necessary to complete the resale of the Notes;
provided that in connection therewith, the Company shall not be required to
qualify as a foreign corporation or otherwise subject itself to taxation in any
jurisdiction in which it is not otherwise so qualified or subject;
(d) To apply the proceeds from the sale of the Notes as set forth under
"Use of Proceeds" in the Offering Memorandum;
(e) For a period of 90 days from the date of the Offering Memorandum, 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 Notes 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 the ▇▇▇▇▇▇ Partnership (as defined in the
Offering Memorandum), ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ to furnish to
the Initial Purchaser, prior to the First Delivery Date, a "lock-up" letter or
letters, in the form affixed hereto and substance and form satisfactory to
counsel for the Initial Purchaser;
(f) For so long as any of the Notes are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, to provide to any holder of
the Notes or to any prospective purchaser of the Notes designated by any holder,
upon request of such holder or prospective purchaser, information required to be
provided by Rule 144A(d)(4) of the Securities Act if, at the time of such
request, the Company is not subject to the reporting requirements under Section
13 or 15(d) of the Exchange Act;
12
(g) Each of the Notes will bear, to the extent applicable, the legend
contained in "Notice to Investors" in the Offering Memorandum for the time
period and upon the other terms stated therein, except after the Notes are
resold pursuant to a registration statement effective under the Securities Act;
(h) 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;
(i) To execute and deliver the Registration Rights Agreement (in form and
substance satisfactory to the Initial Purchaser;
(j) To use its best efforts to assist the Initial Purchaser in arranging to
cause the Notes to be accepted to trade in the PORTAL market ("PORTAL") of the
National Association of Securities Dealers, Inc. ("NASD");
(k) To use its best efforts to cause the Notes to be accepted for clearance
and settlement through the facilities of DTC;
(l) To use its best efforts to have the Conversion Shares approved by the
New York Stock Exchange ("NYSE") for inclusion prior to the effectiveness of the
Registration Statement;
(m) Neither the Company, any of its affiliates nor any persons acting on
its or their behalf has engaged or will engage, during the Restricted Period (as
defined herein), in any directed selling efforts within the meaning of Rule
901(b) of Regulation S with respect to the Notes, and it, its affiliates, and
all persons acting on its behalf have complied and will comply with the offering
restrictions requirements of Regulation S.
4. Expenses. The Company agrees to pay:
(a) the costs incident to the authorization, issuance, sale and delivery of
the Notes, and any taxes payable in that connection;
(b) the costs incident to the preparation, printing and distribution of the
Offering Memorandum and any amendment or supplement to the Offering Memorandum,
as provided in this Agreement;
(c) the costs of delivering and distributing the Operative Documents;
(d) the fees and expenses of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ and
PricewaterhouseCoopers, LLP;
13
(e) the costs of distributing the terms of agreement relating to the
organization of the underwriting syndicate and selling group to the members
thereof by mail, telex or other means of communication;
(f) the fees and expenses of qualifying the Notes under the securities laws
of the several jurisdictions as provided in Section 3(c) and of preparing,
printing and distributing a Blue Sky Memorandum (including reasonable related
fees and expenses of counsel to the Initial Purchaser);
(g) all other costs and expenses incident to (i) the preparation of the
Company's "net road show" presentation materials and (ii) the road show
travelling expenses of the Company;
(h) all fees and expenses incurred in connection with any rating of the
Notes;
(i) the costs of preparing the Notes;
(j) all expenses and fees in connection with the application for inclusion
of the Notes in the PORTAL market and the inclusion of the Conversion Shares on
the NYSE; and
(k) all other costs and expenses incident to the performance of the
obligations of the Company and the Guarantors under this Agreement;
provided that, except as provided in this Section 4 and in Section 7, the
Initial Purchaser shall pay its own costs and expenses, including the costs and
expenses of its counsel and any transfer taxes on the Notes which it may sell.
5. Conditions of the Initial Purchaser's Obligations. The several
obligations of the Initial Purchaser hereunder are subject to the accuracy, when
made and on each Delivery Date, of the representations and warranties of the
Company and the Guarantors contained herein, to the performance by the Company
and the Guarantors of its obligations hereunder, and to each of the following
additional terms and conditions:
(a) The Initial Purchaser shall not have discovered and disclosed to the
Company prior to or on such Delivery Date that the Offering Memorandum or any
amendment or supplement thereto contains any untrue statement of a fact which,
in the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, is material or omits to state any fact which
is material and necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of the Operative Documents and the Offering
Memorandum or
14
any amendment or supplement thereto, and all other legal matters relating to
the Operative Documents and the transactions contemplated thereby shall be
satisfactory in all material respects to counsel to the Initial Purchaser, and
the Company shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters;
(c) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall have furnished to the Initial
Purchaser its written opinion, as counsel to the Company, addressed to the
Initial Purchaser and dated such Delivery Date, in form and substance reasonably
satisfactory to the Initial Purchaser, to the effect that:
(i) The Company and each of the Delaware Guarantors have been duly
organized and are validly existing as corporations 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 Offering
Memorandum;
(ii) All of the outstanding shares of Common Stock of the Company have
been duly authorized, validly issued, fully paid and non-assessable; and
all of the issued shares of capital stock of each Delaware Guarantor 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 our examination of each such subsidiary's stock ledger and minute
book, all such shares are held of record by the Company and/or a subsidiary
of the Company;
(iii) The Indenture has been duly authorized, executed and delivered
by the Company and, assuming the Indenture is a valid and legally binding
obligation of the Trustee, constitutes a valid and legally binding
obligation of the Company enforceable against the Company in accordance
with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) or an
implied covenant of good faith and fair dealing;
(iv) The Notes have been duly authorized, executed and issued by the
Company and, assuming due authentication thereof by the Trustee and upon
payment and delivery in accordance with the terms of the Purchase
Agreement, will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding
in equity or at law) or an
15
implied covenant of good faith and fair dealing; and the Notes, when issued
and delivered, will conform to the description thereof contained in the
Offering Memorandum;
(v) The Conversion Shares that are authorized on the date hereof have
been duly authorized and validly reserved for issuance upon conversion of
the Notes; and the Conversion Shares, when so issued and delivered upon
such conversion in accordance with the terms of the Indenture, will be duly
and validly authorized and issued, fully paid and nonassessable;
(vi) The Guarantees have been duly authorized, executed and issued by
the Delaware Guarantors and, assuming due authentication of the Notes by
the Trustee, upon payment and delivery in accordance with the terms of the
Purchase Agreement will constitute valid and legally binding obligations of
each of the Delaware Guarantors enforceable in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) or an implied covenant of
good faith and fair dealing;
(vii) Assuming that the Guarantees have been duly authorized and
issued by each of the Non-Delaware Guarantors and, assuming due
authentication of the Notes by the Trustee, upon payment and delivery of
the Notes in accordance with the terms of the Purchase Agreement, the
Guarantees will constitute valid and legally binding obligations of the
Non-Delaware Guarantors enforceable against the Non-Delaware Guarantors.
(viii) The statements contained in the Offering Memorandum under the
captions "Risk Factors-The notes are subordinated to all our existing and
future senior indebtedness, which may inhibit our ability to repay you,"
"Risk Factors-The terms of our senior indebtedness could restrict our
flexibility and limit our ability to satisfy obligations under the Notes,"
"Risk Factors--Future sales of common stock of L-3 Holdings in public
market could lower the stock price," "Risk Factors--Delaware Law and the
charter documents of L-3 Holdings may impede or discourage a takeover,
which could cause the market price of its shares to decline," "Certain
Relationships and Related Transactions," "Description of Other
Indebtedness," and "Description of the Notes," insofar as they describe
charter documents, contracts, statutes, rules and regulations and other
legal matters, constitute an accurate summary thereof in all material
respects;
16
(ix) The statements made in the Offering Memorandum 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;
(x) This Agreement has been duly authorized, executed and delivered by
the Company and the Delaware Guarantors; and
(xi) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and the Delaware Guarantors and,
assuming that the Registration Rights Agreement is the valid and legally
binding obligation of the Initial Purchaser and Non-Delaware Guarantors,
constitutes a valid and legally binding obligation of the Company and the
Guarantors, enforceable against the Company and the Guarantors in
accordance with its terms.
(xii) Except as specifically disclosed in the Offering Memorandum, the
issue and sale of the Notes and Guarantees being delivered on such Delivery
Date by the Company and the Guarantors and the compliance by the Company
and the Guarantors, as applicable, with all of the provisions of this
Agreement and the Indenture 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 a document incorporated by
reference in the Offering Memorandum ("Exchange Act Documents") nor will
such actions violate the Certificate of Incorporation or By-Laws or other
organizational documents of the Company or the Delaware Guarantors, 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 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 Notes by the
17
Company (and the guarantees of such Notes by the Guarantors), except
for such consents, approvals, authorizations, registrations or
qualifications as may be required state securities or Blue Sky laws in
connection with the purchase and distribution of the Notes and Guarantees
by the Initial Purchaser. 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.
(xiii) No registration of the Notes under the Securities Act and no
qualification of the Indenture under the Trust Indenture Act is required
for the offer and sale of the Notes by the Company to the Initial Purchaser
or the reoffer and resale of the Notes by the Initial Purchaser to the
Initial Purchaser thereform solely in the manner contemplated by the
Offering Memorandum, the Purchase Agreement and the Indenture.
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 Initial Purchaser a
written statement, addressed to the Initial Purchaser and dated the
Delivery Date. Such counsel has not independently verified the accuracy,
completeness or fairness of the statements made or included in the Offering
Memorandum and take no responsibility therefor, except as and to the extent
set forth in paragraphs (viii) and (ix) above. In the course of the
preparation by the Company of the Offering Memorandum (excluding the
Exchange Act Documents), such counsel participated in conferences with
certain officers and employees of the Company, with representatives of
PricewaterhouseCoopers, LLP and with counsel to the Company. Based upon
such counsel's examination of the Offering Memorandum (including the
Exchange Act Documents), such counsel's investigations made in connection
with the preparation of the Offering Memorandum (excluding the Exchange Act
Documents) and such counsel's participation in the conferences referred to
above, such counsel has no reason to believe that the Offering Memorandum,
including the Exchange Act Documents 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 with respect to the financial statements or other
financial data contained in the Offering Memorandum or incorporated therein
by reference.
(d) ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel of the Company, shall have
furnished to the Initial Purchaser his written opinion, as General Counsel to
the
18
Company, addressed to the Initial Purchaser and dated such Delivery Date, in
form and substance reasonably satisfactory to the Initial Purchaser, 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 Offering Memorandum as being owned by them, free
and clear of all liens, claims, security interests or other encumbrances
except such as are described in the Offering Memorandum or, to the extent
that any such liens, claims, security interests or other encumbrances would
not have a Material Adverse Effect (individually or in the aggregate) and
all the material property described in the Offering Memorandum as being
held under lease by the Company and its subsidiaries is held by them under
valid, subsisting and enforceable leases, with only such exceptions as
would not have a Material Adverse Effect (individually or in the
aggregate);
(iii) To such counsel's knowledge and except as otherwise disclosed in
the Offering Memorandum, except (1) as described in the Offering
Memorandum, (2) as provided in the Registration Rights Agreement, (3) in
respect of the obligation to deliver freely "tradable shares" to the
sellers in connection with the acquisition of the ILEX Systems, Inc.
business and (4) other than the Registration Rights Agreement, dated
December 11, 1998, among the L-3 Communications Corporation and the parties
named therein; 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 Registration Statement;
(iv) To such counsel's knowledge and except as otherwise disclosed in
the Offering Memorandum, 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; and
(v) None of the issue and sale of the Notes and Guarantees being
delivered on such Delivery Date by the Company and the Guarantors and the
19
compliance by the Company and the Guarantors, as applicable, with all
of the provisions of this Agreement and the consummation of the
transactions contemplated hereby requires any consent, approval,
authorization or other order of, or registration or filing with, any
federal court, federal regulatory body, federal administrative agency or
other federal governmental official having authority over government
procurement matters (provided, that the opinion contained in this paragraph
(v) may be delivered by other counsel reasonably satisfactory to the
Initial Purchaser).
(e) The Initial Purchaser shall have received from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel for the Initial Purchaser, such opinion or opinions, dated the Delivery
Date, with respect to the issuance and sale of the Notes and Guarantees, the
Offering Memorandum and other related matters as the Initial Purchaser may
reasonably require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters;
(f) At the time of the First Delivery Date, the Initial Purchaser shall
have received from PricewaterhouseCoopers, LLP a letter, in form and substance
satisfactory to the Initial Purchaser, addressed to the Initial Purchaser and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and under Rule 101 of
AICPA's Code of Professional Conduct 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 hereof (or, with
respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Offering Memorandum,
as of a date not more than five days prior to the date hereof), the conclusions
and findings of such firm with respect to the financial information and other
matters ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings;
(g) With respect to the letter of PricewaterhouseCoopers, LLP referred to
in the preceding paragraph and delivered to the Initial Purchaser (the "initial
letter"), on any subsequent Optional Delivery Date, the Company shall have
furnished to the Initial Purchaser a letter (the "bring-down letter") of such
accountants, addressed to the Initial Purchaser and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and Code of Professional Conduct 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 letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is given
in the Offering Memorandum, as of a date not more than five days prior to the
date of the bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by the initial
letter and (iii) confirming in all material respects the conclusions and
findings set forth in the initial letter;
(h) The Company shall have furnished to the Initial Purchaser a
certificate, dated such Delivery Date and delivered on behalf of the Company, of
its Chairman of the Board,
20
its President or a Vice President and its chief financial officer, in form and
substance satisfactory to the Initial Purchaser, to the effect that:
(i) The representations, warranties and agreements of the Company in
Section 1 are true and correct as of the date given and as of such Delivery
Date; and the Company has complied with all its agreements contained herein
to be performed prior to or on such Delivery Date; and
(ii) Such officer has carefully examined the Offering Memorandum and,
in such officer's opinion (A) the Offering Memorandum, as of its date, did
not include any untrue statement of a material fact and did not omit to
state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and
(B) since the date of the Offering Memorandum, no event has occurred which
should have been set forth in a supplement or amendment to the Offering
Memorandum.
(i) 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;
(j) The Indenture shall have been duly executed and delivered by the
Company and the Trustee and the Notes shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee;
(k) The Company and the Initial Purchaser shall have executed and delivered
the Registration Rights Agreement (in form and substance satisfactory to the
Initial Purchaser) and the Registration Rights Agreement shall be in full force
and effect;
(l) The NASD shall have accepted the Notes for trading on PORTAL;
(m)(i) Neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included in the
Offering Memorandum any 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, except (A)
as set forth or contemplated in the Offering Memorandum and (B) for operating
losses incurred in the ordinary course of business, or (ii) since such date
there shall not have been any change in the capital stock or long-term debt of
the Company and its subsidiaries (except for issuances of shares of Common Stock
upon exercise of outstanding options described in the Offering Memorandum or
pursuant to Authorized Grants), or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
21
position, stockholders' equity or results of operations of the Company and its
subsidiaries, except as set forth or contemplated in the Offering Memorandum,
the effect of which, in any such case described in clause (i) or (ii), is, in
the reasonable judgment of the Initial Purchaser, so material and adverse as to
make it impracticable or inadvisable to proceed with the sale or the delivery of
the Notes being delivered on such Delivery Date on the terms and in the manner
contemplated in the Offering Memorandum;
(n) 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 NYSE, the American Stock
Exchange, the NASDAQ or the over-the-counter market, or trading in any
securities of the Company on any exchange shall have been suspended or
minimum prices shall have been established on any such exchange or market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction;
(ii) a banking moratorium shall have been declared by United States
federal or New York State authorities;
(iii) the United States shall have become engaged in hostilities,
there shall have been an escalation in hostilities involving the United
States, or there shall have been a declaration of a national emergency or
war by the United States; or
(iv) there shall have occurred such a material 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 sole judgment of the Initial
Purchaser, impracticable or inadvisable to proceed with the offering or
delivery of the Notes being delivered on such Delivery Date on the terms
and in the manner contemplated in the Offering Memorandum.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to counsel
to the Initial Purchaser.
6. Representations, Warranties and Agreements of the Initial Purchaser. The
Initial Purchaser represents and warrants that it is a QIB and is not acquiring
the Notes with a view to any distribution thereof or with any present intention
of offering or selling any of the Notes in a transaction that would violate the
Securities Act or the securites laws of any State of the United States or any
applicable jurisdiction. In connection with the sale of the Notes by the
22
Initial Purchaser, the Initial Purchaser will solicit offers to buy the Notes
only from, and will offer to sell the Notes only to, the Eligible Purchasers
(defined as: (i) persons whom the Initial Purchaser reasonably believes are
"qualified institutional buyers" as defined in Rule 144A under the Securities
Act and (ii) outside the United States to persons other than U.S. persons in
offshore transactions meeting the requirements of Rule 904 of Regulation S under
the Securities Act) in accordance with this Agreement and on the terms
contemplated by the Offering Memorandum. The Initial Purchaser agrees with the
Company that:
(a) The Notes and the Conversion Shares have not been and will not be
registered under the Securities Act in connection with the initial offering of
the Notes;
(b) The Initial Purchaser is purchasing the Notes pursuant to a private
sale exemption from registration under the Securities Act;
(c) The Notes have not been and will not be offered or sold by the Initial
Purchaser or its affiliates acting on its behalf within the United States or to,
or for the account or benefit of, United States persons except in accordance
with Rule 144A;
(d) The Initial Purchaser will not offer or sell the Notes in the United
States by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D, including (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar medium or broadcast over television or radio, or
(ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising in the United States; and
(e) The Notes have not been and will not be registered under the Securities
Act and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with an exemption from
the registration requirements of the Securities Act. The Initial Purchaser
represents that it has been offered, sold or delivered the Notes, and will not
offer, sell or deliver the Notes (i) as a part of its distribution at any time
or (ii) otherwise until one year after the later of the commencement of the
Offering of the Notes and the Closing Date (such period, the "Restricted
Period"), within the United States or to, or for the account or benefit of U.S.
Persons except in accordance with Rule 144A under the Securities Act.
Accordingly, the Initial Purchaser represents and agrees that neither it, its
affiliates nor any persons acting on its or their behalf has engaged or will
engage, during the Restricted Period, in any directed selling efforts within the
meaning of Rule 901(b) of Regulation S with respect to the Notes, and it, its
affiliates and all persons acting on its behalf have complied and will comply
with the offering restrictions requirements of Regulation S.
(f) The Initial Purchaser agrees that, at or prior to confirmation of a
sale of Notes (other than a sale pursuant to Rule 144A in transactions that are
exempt from the registration requirements of the Securities Act), it will have
sent to each distributor, dealer or
23
person receiving a selling concession, fee or other renumeration that purchases
Notes form it during the Restricted Period a confirmation or notice
substantially to the following effect:
"The Notes covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered and
sold within the United States or to, or for the account or benefit of U.S.
persons (i) as part of their distribution at any time or (ii) otherwise
until one year after the later of the commencement of the offering or the
closing date, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used above have the
meanings assigned to them in Regulation S."
Such Initial Purchaser further agrees that it has not entered and will not
enter into any contractual arrangement with respect to the distribution or
delivery of the Notes, except with its affiliates or with the prior written
consent of the Company.
(g) The Initial Purchaser further represents and agrees that (i) it has not
offered or sold and will not offer or sell any Notes to persons in the United
Kingdom prior to the expiry of the period of six months from the issue date of
the Notes, except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (s principal or agent)
for the purpose of their businesses or otherwise in circumstances that have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities regulations 1995, (ii) it
has complied with and will comply with all applicable provisions of the
Financial Services ▇▇▇ ▇▇▇▇ with respect to anything done by it in relation to
the Notes in, from or otherwise involving the United Kingdom), and (iii) it has
only issued or passed on and will only issue or pass on in the United Kingdom
any documents received by it in connection with the issuance of the Notes to a
person who is of a kind described in Article 11(3) of the Financial Services ▇▇▇
▇▇▇▇ (Investment Advertisements) (Exemptions) Order 1995 or is a person to whom
the document may otherwise be lawfully issued or passed on.
(h) The Initial Purchaser agrees not to cause any advertisement of the
Notes to be published in any newspaper or periodical or posted in any public
place and not to issue any circular relating to the Notes, except such
advertisements as include the statements required by Regulation S.
(i) The sales of the Notes pursuant to Regulation S are "offshore
transactions" and are not part of a plan or scheme to evade the registration
provisions of the Securities Act.
(j) The Initial Purchaser understands that the Company and, for purposes of
the opinions to be delivered to you pursuant to Section 5 hereof, counsel to the
Company, General Counsel to the Company and counsel to the Initial Purchaser,
will rely upon the accuracy and truth of the foregoing representations and the
Initial Purchaser hereby consent to such reliance.
24
The terms used in this Section 7 that have meanings assigned to them in
Regulation S are used herein as so defined.
The Initial Purchaser further agrees that, in connection with the sale of
the Notes by the Initial Purchaser, it will solicit offers to buy the Notes only
from, and will offer to sell the Notes only to Eligible Purchasers.
7. Indemnification and Contribution.
(a) The Company and the Guarantors shall jointly and severally indemnify
and hold harmless the Initial Purchaser, its officers and employees and each
person, if any, who controls the Initial Purchaser within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Notes), to which the Initial Purchaser, officer, employee or controlling person
may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Offering Memorandum or in any amendment or supplement thereto, (ii) the omission
or alleged omission to state in the Offering Memorandum, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading or
(iii) any act or failure to act or any alleged act or failure to act by the
Initial Purchaser in connection with, or relating in any manner to, the Notes or
the offering contemplated hereby, and which is included as part of or referred
to in any loss, claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the Company and the
Guarantors shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by the Initial Purchaser
through its gross negligence or willful misconduct), and shall reimburse the
Initial Purchaser and each such officer, employee or controlling person promptly
upon demand for any legal or other expenses reasonably incurred by the Initial
Purchaser, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company and the Guarantors shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Offering Memorandum, or in any such amendment or
supplement, in reliance upon and in conformity with written information
concerning the Initial Purchaser furnished to the Company by the Initial
Purchaser specifically for inclusion therein, which information consists solely
of the information. The foregoing indemnity agreement is in addition to any
liability which the Company or the Significant Subsidiary may otherwise have to
any Initial Purchaser or to the officer, employee or controlling person of the
Initial Purchaser.
(b) The Initial Purchaser shall indemnify and hold harmless the Company,
the Guarantors, their officers and employees and the Guarantors, each of their
directors and each person,
25
if any, who controls the Company and the Guarantors within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person, the Guarantors, may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in the Offering
Memorandum or in any amendment or supplement thereto, or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in the Offering
Memorandum, or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information concerning
such Initial Purchaser furnished to the Company by the Initial Purchaser
specifically for inclusion therein, and shall reimburse the Company and any such
director, officer or controlling person of the Company for any legal or other
expenses reasonably incurred by the Company, such Guarantor or any such
director, officer or controlling person of the Company in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which the Initial Purchaser
may otherwise have to the Company, the Guarantors or any such director, officer,
employee, or controlling person of the Company.
(c) Promptly after receipt by an indemnified party under this Section 7 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 7, 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 7 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 7. 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 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel, it is advisable for such indemnified party
to employ separate counsel or (iii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party
26
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 7 consist of the Initial Purchaser or any of its respective
officers, employees or controlling persons, or by the Company, if the
indemnified parties under this Section 7 consist of the Company, the Guarantors
or any of the Company's or the Guarantors' directors, officers, employees or
controlling persons. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, or (ii) be liable for any settlement
of any such action effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 7 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 7(a) or 7(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
and the Guarantors on the one hand and the Initial Purchaser on the other from
the offering of the Notes and Guarantees or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Guarantors, on the one
hand and the Initial Purchaser on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantors, on the one hand
and the Initial Purchaser 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 Notes purchased under this Agreement (before deducting expenses) received
by the Company and the Guarantors, on the one hand, and the total underwriting
discounts and commissions received by the Initial Purchaser with respect to the
shares of the Notes and Guarantees purchased under this Agreement, on the other
hand, bear to the total gross proceeds from the offering of the Notes under this
Agreement, in each case as set forth in the table on the cover page of the
Offering Memorandum. 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, and the Guarantors or the Initial Purchaser, the intent of the parties
and
27
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Guarantors and the Initial
Purchaser agree that it would not be just and equitable if contributions
pursuant to this Section 7 were to be determined by pro rata allocation 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 7 shall be deemed to include, for
purposes of this Section 7(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7(d), the
Initial Purchaser shall not be required to contribute any amount in excess of
the amount by which the total price at which the Notes purchased by it exceeds
the amount of any damages which the Initial Purchaser has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchaser's obligations to contribute as provided
in this Section 7(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Initial Purchaser confirms and the Company and the Guarantors
acknowledge that the statements with respect to the offering of the Notes by the
Initial Purchaser and the third, sixth, seventh, eighth, ninth, twelfth,
fourteenth, fifteenth, sixteenth and eighteenth third paragraphs under the
caption "Plan of Distribution" in the Offering Memorandum are correct and
constitute the only information concerning the Initial Purchaser furnished in
writing to the Company by or on behalf of the Initial Purchaser specifically for
inclusion in the Offering Memorandum.
Nothing contained herein shall relieve the Initial Purchaser of any
liability it may have to the Company for damages caused by its default. If other
purchasers are obligated or agree to purchase the Notes of a defaulting or
withdrawing Initial Purchaser, either the remaining non-defaulting Initial
Purchaser or the Company may postpone the Delivery Date for up to seven full
business days in order to effect any changes in the Offering Memorandum or in
any other document or arrangement that, in the opinion of counsel to the Company
or counsel to the Initial Purchaser, may be necessary.
8. Termination. The obligations of the Initial Purchaser hereunder may be
terminated by the Initial Purchaser by notice given to and received by the
Company prior to delivery of and payment for the Notes if, prior to that time,
any of the events described in Sections 5(k) and (l) shall have occurred or if
the Initial Purchaser shall decline to purchase the Notes for any reason
permitted under this Agreement.
9. Reimbursement of Initial Purchaser's Expenses. If the Company and the
Guarantors shall fail to tender the Notes and the Guarantees for delivery to the
Initial Purchaser by reason of any failure, refusal or inability on the part of
the Company and the Guarantors to perform any agreement on its part to be
performed, or because any other condition of the Initial Purchaser's obligations
hereunder required to be fulfilled by the Company and the Guarantors is
28
not fulfilled, the Company and the Guarantors will reimburse the Initial
Purchaser for all out-of-pocket expenses (including fees and disbursements of
counsel) incurred by the Initial Purchaser in connection with this Agreement and
the proposed purchase of the Notes and the Guarantees, and upon demand the
Company and the Guarantors shall pay the full amount thereof to ▇▇▇▇▇▇ Brothers
Inc.
10. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchaser, 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 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; and
(b) if to the Company or to the Gurantors, shall be delivered or sent by
mail, telex or facsimile transmission to L-3 Communications, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (Fax:
▇▇▇-▇▇▇-▇▇▇▇). Any such statements, requests, notices or agreements shall take
effect at the time of receipt thereof. The Company shall be entitled to act and
rely upon any request, consent, notice or agreement given or made by ▇▇▇▇▇▇
Brothers Inc.
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the Initial Purchaser, the Company, the
Guarantors and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the Company
and the Guarantors contained in this Agreement shall also be deemed to be for
the benefit of the officers and employees of the Initial Purchaser and the
person or persons, if any, who control the Initial Purchaser within the meaning
of Section 15 of the Securities Act and (B) any indemnity agreement of the
Initial Purchaser contained in Section 7(b) of this Agreement shall be deemed to
be for the benefit of directors and officers of the Company and any person
controlling the Company within the meaning of Section 15 of the Securities Act.
Nothing contained in this Agreement is intended or shall be construed to give
any person, other than the persons referred to in this Section 11, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
12. Survival. The respective indemnities, representations, warranties and
agreements of the Company, the Guarantors and the Initial Purchaser contained in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Notes and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any of them or
any person controlling any of them.
29
13. Definition of the Terms "Business Day" and "Subsidiary." For purposes
of this Agreement, (a) "business day" means each Monday, Tuesday, Wednesday,
Thursday or Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close and (b)
"subsidiary" has the meaning set forth in Rule 405 of the Securities Act Rules
and Regulations.
14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
15. 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.
16. 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]
If the foregoing correctly sets forth the agreement among the Company, the
Guarantors and the Initial Purchaser, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
L-3 COMMUNICATIONS HOLDINGS, INC.
as the Company
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
L-3 COMMUNICATIONS CORPORATION,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
HYGIENETICS ENVIRONMENTAL SERVICES, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
L-3 COMMUNICATIONS ILEX SYSTEMS, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
L-3 COMMUNICATIONS AYDIN CORPORATION,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MPRI, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
L-3 COMMUNICATIONS SPD TECHNOLOGIES, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SPD HOLDINGS, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SPD ELECTRICAL SYSTEMS, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SPD SWITCHGEAR, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
PAC ORD, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇▇, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
POWER PARAGON, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
L-3 COMMUNICATIONS ESSCO, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SOUTHERN CALIFORNIA MICROWAVE, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
L-3 COMMUNICATIONS STORM CONTROL SYSTEMS,
INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
L-3 COMMUNICATIONS DBS MICROWAVE, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MICRODYNE CORPORATION,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
ELECTRODYNAMICS, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
INTERSTATE ELECTRONICS CORPORATION,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
If the foregoing correctly sets forth the agreement among the
Company, the Guarantors and the Initial Purchaser, please indicate your
acceptance in the space provided for that purpose below.
Accepted and agreed by:
▇▇▇▇▇▇ BROTHERS INC.
By: /s/ ▇▇▇▇▇ ▇. Brand
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Name: ▇▇▇▇▇ ▇. Brand
Title: Managing Director
SCHEDULE 1
Principal Amount
Initial Purchaser of Firm Notes
----------------- ----------------
▇▇▇▇▇▇ Brothers Inc. ............................... $250,000,000
FORM OF LOCK-UP LETTER AGREEMENT
▇▇▇▇▇▇ BROTHERS INC.
Three World Financial Center
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned understands that you propose to enter into a purchase
agreement (the "Purchase Agreement") providing for the purchase by you the
"Initial Purchaser" of 5 1/4% Convertible Senior Subordinated Notes due 2009
(the "Notes"), convertible into shares of Common Stock, par value $.01 per share
(the "Common Stock"), of L-3 Communications Holdings, Inc. (the "Company") and
that the Initial Purchaser proposes to reoffer the Notes (the "Offering") in
reliance on an exemption from registration under the Securities Act of 1933.
In consideration of the execution of the Purchase Agreement by the
Initial Purchaser, 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 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 90 days after the date of the final Offering Memorandum 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 notifies you that it does not
intend to proceed with the Offering, if the Purchase Agreement does not become
effective, or if the Purchase Agreement (other than the provisions thereof which
survive termination) shall terminate or be terminated prior to payment for and
delivery of the Notes, we will be released from our obligations under this
Lock-Up Letter Agreement.
It is further understood that the Company and the Initial Purchaser
have represented to the undersigned that 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 Initial
Purchaser 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 and the Initial Purchaser
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 Initial Purchaser, successors and assigns of
the undersigned.
Very truly yours,
By: /s/ ▇▇▇▇▇ ▇. Brand
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Name: ▇▇▇▇▇ ▇. Brand
Title: Managing Director
Dated: