EXHIBIT 10.3
STOCKHOLDERS AGREEMENT
DATED AS OF APRIL 30, 1997
Among
L-3 COMMUNICATIONS HOLDINGS, INC.
LOCKHEED XXXXXX CORPORATION,
XXXXXX BROTHERS CAPITAL PARTNERS III, L.P.,
XXXXXX BROTHERS HOLDINGS INC.,
XXXXX X. XXXXX,
and
XXXXXX X. XXXXXXX
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . 2
ARTICLE II
RESTRICTIONS ON TRANSFERS
Section 2.1. Transfers in Accordance with this Agreement . . 6
Section 2.2. Agreement to be Bound . . . . . . . . . . . . . 6
Section 2.3. Legend . . . . . . . . . . . . . . . . . . . . 6
Section 2.4. Transfers to Permitted Transferees and the
Company . . . . . . . . . . . . . . . . . . . 6
Section 2.5. No Transfer Period; Rights of First Offer . . . 7
Section 2.6. Tag Along Right . . . . . . . . . . . . . . . . 8
Section 2.7. Bring Along Right . . . . . . . . . . . . . . . 9
Section 2.8. Registration Rights . . . . . . . . . . . . . . 10
ARTICLE III
CLOSING
Section 3.1. Closing . . . . . . . . . . . . . . . . . . . . 10
Section 3.2. Deliveries at Closing; Method of Payment
of Purchase Price . . . . . . . . . . . . . . 10
ARTICLE IV
ADDITIONAL RIGHTS AND OBLIGATIONS
OF STOCKHOLDERS AND THE COMPANY
Section 4.1. Preemptive Rights . . . . . . . . . . . . . . . 11
Section 4.2. Future Services . . . . . . . . . . . . . . . . 11
Section 4.3. Regulatory Event . . . . . . . . . . . . . . . 12
Section 4.4. Regulatory Compliance . . . . . . . . . . . . . 12
Section 4.5. Standstill Agreement . . . . . . . . . . . . . 13
Section 4.6. Certain Other Agreements . . . . . . . . . . . 13
ARTICLE V
CERTAIN VOTING AGREEMENTS
Section 5.1. Board of Directors of the Company . . . . . . . 13
Section 5.2. Charter Documents . . . . . . . . . . . . . . . 15
Section 5.3. Consent to an Initial Public Offering;
Required IPO . . . . . . . . . . . . . . . . 15
ARTICLE VI
TERMINATION
Section 6.1. Termination . . . . . . . . . . . . . . . . . . 15
2
ARTICLE VII
MISCELLANEOUS
Section 7.1. No Inconsistent Agreements . . . . . . . . . . 16
Section 7.2. Recapitalization, Exchanges, etc . . . . . . . 16
Section 7.3. Successors and Assigns . . . . . . . . . . . . 16
Section 7.4. No Waivers, Amendments . . . . . . . . . . . . 16
Section 7.5. Notices . . . . . . . . . . . . . . . . . . . . 16
Section 7.6. Inspection . . . . . . . . . . . . . . . . . . 17
SECTION 7.7. GOVERNING LAW . . . . . . . . . . . . . . . . . 17
Section 7.8. Section Headings . . . . . . . . . . . . . . . 17
Section 7.9. Entire Agreement . . . . . . . . . . . . . . . 17
Section 7.10. Severability . . . . . . . . . . . . . . . . . 17
Section 7.11. Counterparts . . . . . . . . . . . . . . . . . 17
Section 7.12. Option Plan . . . . . . . . . . . . . . . . . . 18
Exhibit A Bylaws
Exhibit B Certificate of Incorporation
Exhibit C Registration Rights
Exhibit D Form of Agreement to be Bound
Exhibit E 1997 Option Plan for Key Employees of L-3
Communications Holdings, Inc.
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STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated as of April 30, 1997 among L-3
Communications Holdings, Inc., a Delaware corporation (the "Company"), Lockheed
Xxxxxx Corporation, a Maryland corporation ("Lockheed Xxxxxx"), Xxxxxx Brothers
Capital Partners III, L.P., a Delaware limited partnership ("Xxxxxx"), Xxxxxx
Brothers Holders Inc., a Delaware corporation and the general partner of Xxxxxx
("LBHI"), Xxxxx X. Xxxxx ("Xxxxx") and Xxxxxx X. XxXxxxx ("XxXxxxx" and,
together with Xxxxx, the "Management Investors"). Each of the parties to this
Agreement (other than the Company) and any other Person (as hereinafter
defined) who or which shall become a party to or agree to be bound by the terms
of this Agreement after the date hereof is sometimes hereinafter referred to as
a "Stockholder."
WITNESSETH
WHEREAS, this Agreement shall become effective (the "Effective Date")
on the date of, and simultaneously with, the Closing under the Subscription
Agreements (as hereinafter defined);
WHEREAS, as of the Effective Date, the Company will have an
authorized capital stock consisting of 25,000,000 shares of Class A common
stock, par value $0.01 per share (the "Class A Common Stock"), 3,000,000 shares
of Class B common stock, par value $0.01 per share (the "Class B Common Stock")
and 3,000,000 shares of Class C common stock, par value $0.01 per share (the
"Class C Common Stock") and, together with the Class A Common Stock, the
"Common Stock").
WHEREAS, the Company, Lockheed Martin, Lehman and the Management
Investors have entered into a Transaction Agreement dated as of March 28, 1997
(the "Transaction Agreement") pursuant to which, among other things, the
Company has agreed, subject to the terms and conditions thereof, to purchase
certain assets and assume certain related liabilities of Lockheed Xxxxxx;
WHEREAS, in connection with the consummation of the transactions
pursuant to the Transaction Agreement, each of Lockheed Martin, Lehman and LBHI
has entered into a Common Stock Subscription Agreement with the Company dated
as of the date of this Agreement pursuant to which each such Stockholder has
agreed, subject to the terms and conditions thereof, to purchase shares of
Class A Common Stock;
WHEREAS, in connection with the consummation of the transactions
pursuant to the Transaction Agreement, each of the Management Investors has
entered into a Common Stock Subscription Agreement with the Company dated as of
the date of this Agreement (such Common Stock Subscription Agreements, together
with the Common Stock Subscription Agreements referred to in the preceding
recital, the "Subscription Agreements") pursuant to which each such Management
Investor has agreed, subject to the terms and conditions thereof, to purchase
shares of Class B Common Stock; and
WHEREAS, the parties hereto desire to restrict the sale, assignment,
transfer, encumbrance or other disposition of the Shares (as hereinafter
defined) and to provide for certain rights and obligations and other agreements
in respect of the Shares, all as hereinafter provided.
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NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. As used in this Agreement, the
following terms have the following meanings:
"Acquisition Transaction" shall have the meaning set forth in
Section 4.6.
"Adverse Clearance Status" shall have the meaning
set forth in Section 4.3.
"Affiliate", as applied to any Person, shall mean any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting
securities, by contract or otherwise. Notwithstanding the foregoing, for
purposes of this Agreement, Lockheed Xxxxxx shall not be considered an
Affiliate of Xxxxxx or of either of the Management Investors and the employee
benefit plans of Lockheed Xxxxxx and its Subsidiaries shall not be considered
Affiliates of Lockheed Xxxxxx.
"Board of Directors" shall mean the Board of Directors of the
Company.
"Business" shall have the meaning set forth in the Transaction
Agreement.
"Buyer's Notice" shall have the meaning set forth in Section
2.5(c).
"Buyout Notice" shall have the meaning set forth in Section 2.7.
"Bylaws" shall mean the Bylaws of the Company, in the form of Exhibit
A, as amended from time to time, consistent with the terms hereof.
"Certificate of Incorporation" shall mean the Amended and Restated
Certificate of Incorporation of the Company, in the form of Exhibit B, as
amended from time to time, consistent with the terms hereof.
"Charter Documents" shall have the meaning set forth in Section
5.2(a).
"Class A Common Stock" shall have the meaning set forth in the
recitals of this Agreement.
"Class B Common Stock" shall have the meaning set forth in the
recitals of this Agreement.
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"Class C Common Stock" shall have the meaning set forth in the
recitals of this Agreement.
"Common Stock" shall have the meaning set forth in the recitals of
this Agreement.
"Company" shall have the meaning set forth in the preamble of this
Agreement.
"Effective Date" shall have the meaning set forth in the recitals
of this Agreement.
"FOCI" shall have the meaning set forth in Section 4.3.
"Initial Public Offering" shall mean the initial Public Offering
(other than pursuant to a registration statement on Form S-8 or otherwise
relating to equity securities issuable under any employee benefit plan of the
Company).
"Xxxxx" shall have the meaning set forth in the preamble of this
Agreement.
"XxXxxxx" shall have the meaning set forth in the preamble of this
Agreement.
"Xxxxxx" shall have the meaning set forth in the preamble of this
Agreement.
"LBHI" shall have the meaning set forth in the preamble of this
Agreement.
"Xxxxxx Nominees" shall have the meaning set forth in Section
5.1(a).
"Lockheed Xxxxxx" shall have the meaning set forth in the preamble
of this Agreement.
"Lockheed Xxxxxx Nominees" shall have the meaning set forth in
Section 5.1(a).
"Management Investors" shall have the meaning set forth in the
preamble of this Agreement.
"Offer Price" shall have the meaning set forth in Section 2.5(b).
"Offered Shares" shall have the meaning set forth in Section
2.5(b).
"Option Plan" shall mean the 1997 Option Plan for Key Employees of
L-3 Communications Holdings, Inc., in the form of Exhibit E hereto.
"Payment in Full of the Preference Amount" shall have the meaning
given such term in the Certificate of Incorporation.
"Permitted Transferee" shall mean:
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(i) in the case of Xxxxxx or LBHI and Permitted Transferees of Xxxxxx
and LBHI, (A) LBHI or Xxxxxx, as the case may be, or any controlled
Affiliate (other than an individual) of LBHI, (B) any general or limited
partner, director, officer or employee of Xxxxxx, LBHI or any controlled
Affiliate (other than an individual) of LBHI, (C) the heirs, executors,
administrators, testamentary trustees, legatees or beneficiaries of any of
the individuals referred to in clause (B), (D) any trust, the
beneficiaries of which include only (1) Xxxxxx, (2) Permitted Transferees
referred to in clauses (A), (B) and (C) and (3) spouses and lineal
descendants of Permitted Transferees referred to in clause (B) and (E) a
corporation or partnership, a majority of the equity of which is owned and
controlled by Xxxxxx and/or Permitted Transferees referred to in clauses
(A), (B), (C) and (D);
(ii) in the case of Lockheed Xxxxxx and Permitted Transferees of
Lockheed Xxxxxx, any controlled Affiliate of Lockheed Xxxxxx; and
(iii) in the case of each Management Investor and Permitted Transferees
of such Management Investor, his or her spouse or any of his or her lineal
descendants or legatees or a testamentary trust for such legatees, or a
trust or individual retirement account, the beneficiaries of which or a
corporation or partnership the stockholders or partners of which include
only such Stockholder, his or her spouse and his or her lineal descendants
or a corporation or partnership wholly owned by them;
provided, that any such Permitted Transferee referred to in clauses
(i)(iii) agrees in writing to be bound by the terms of this Agreement in
accordance with Section 2.2.
"Person" shall mean an individual, partnership, corporation, business
trust, joint stock company, limited liability company, unincorporated
association, joint venture or other entity of whatever nature.
"Proposed Transferee" shall have the meaning set forth in Section
2.6.
"Public Offering" shall mean any underwritten public offering of
equity securities of the Company pursuant to an effective registration
statement under the Securities Act.
"Put" shall have the meaning set forth in Section 4.3.
"Reduced Transfer Price" shall have the meaning set forth in
Section 2.5(d).
"Reduced Transfer Price Notice" shall have the meaning set forth in
Section 2.5(d).
"Regulatory Event Notice" shall have the meaning set forth in
Section 4.3.
"Regulatory Portion" shall have the meaning set forth in Section
4.3.
"Restriction Lapse" shall have the meaning given such term in the
Certificate of Incorporation.
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"Second Reduction Transfer Price" shall have the meaning set forth in
Section 2.5(e).
"Second Reduction Transfer Price Notice" shall have the meaning set
forth in Section 2.5(e).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Seller" shall have the meaning set forth in Section 2.5(b).
"Seller's Notice" shall have the meaning set forth in Section
2.5(b).
"Share Equivalents" shall mean securities of any kind issued by the
Company convertible into or exchangeable for Shares or options, warrants or
other rights to purchase or subscribe for Shares or securities convertible into
or exchangeable for Shares.
"Shares" shall mean, with respect to any Stockholder, shares of
Common Stock, whether now owned or hereafter acquired (including upon exercise
of options, preemptive rights or otherwise), held by such Stockholder.
"Shares Subject to Forfeiture" shall have the meaning given such term
in the Certificate of Incorporation.
"Stockholder" shall have the meaning set forth in the preamble of
this Agreement.
"Subscription Agreements" shall have the meaning set forth in the
recitals of this Agreement.
"Subsidiary" shall mean, with respect to any Person, any corporation
or other entity of which a majority of the capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar function at the time directly or
indirectly owned by such Person.
"Third Party" shall mean any prospective Transferee of Shares (other
than the Company) that is not a Permitted Transferee of the Stockholder
proposing the Transfer of such Shares to such prospective Transferee.
"Transaction Agreement" shall have the meaning set forth in the
recitals of this Agreement.
"Transfer" shall have the meaning set forth in Section 2.1.
"Transfer Closing Date" shall have the meaning set forth in Section
3.1.
"Transferee" shall mean any Person who or which acquires Shares from
a Stockholder or a Transferee (including Permitted Transferees) of a
Stockholder subject to this Agreement.
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ARTICLE II
RESTRICTIONS ON TRANSFERS
Section 2.1. Transfers in Accordance with this Agreement. No
Stockholder shall, directly or indirectly, transfer, sell, assign, pledge,
hypothecate, encumber, or otherwise dispose of all or any portion of any Shares
or any economic interest therein (including without limitation by means of any
participation or swap transaction) (each, a "Transfer") to any Person, except
in compliance with the Securities Act, applicable state and foreign securities
laws and this Agreement. No Stockholder shall Transfer any Shares if the
consummation of such Transfer may result in the Company becoming subject to
FOCI or Adverse Clearance Status. Any attempt to Transfer any Shares in
violation of the terms of this Agreement shall be null and void, and neither
the Company, nor any transfer agent shall register upon its books any Transfer
of Shares by a Stockholder to any Person except a Transfer in accordance with
this Agreement.
Section 2.2. Agreement to be Bound. No Transfer of Shares (other than
Transfers (i) in the Initial Public Offering, if any, or (ii) to the Company)
shall be effective unless (i) the certificates representing such Shares issued
to the Transferee shall bear the legend provided in Section 2.3 and (ii) the
Transferee, if not already a party hereto, shall have executed and delivered to
each other party hereto, as a condition precedent to such Transfer, an
instrument or instruments substantially in the form of Exhibit D or otherwise
reasonably satisfactory to such parties confirming that the Transferee agrees
to be bound by the terms of this Agreement with respect to the Shares so
Transferred to the same extent applicable to the Transferor thereof.
Section 2.3. Legend. A copy of this Agreement shall be filed with the
Secretary of the Company and kept with the records of the Company. Each
Stockholder hereby agrees that each certificate representing Shares issued to
any Stockholder, or any certificate issued in exchange for any similarly
legended certificate, shall bear a legend reading substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE OFFERED AND
SOLD ONLY IF SO REGISTERED OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
THE SHARES REPRESENTED BY THIS CERTIFICATE ALSO ARE SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCKHOLDERS
AGREEMENT, DATED AS OF APRIL 30, 1997, COPIES OF WHICH MAY BE
OBTAINED FROM L-3 COMMUNICATIONS HOLDINGS, INC. (THE "COMPANY"). NO
TRANSFER OF SUCH SHARES WILL BE MADE ON THE BOOKS OF THE COMPANY
UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF SUCH
AGREEMENT.
Section 2.4. Transfers to Permitted Transferees and the Company. (a)
None of the restrictions contained in this Agreement with respect to Transfers
of Shares (other than Sections 2.2, 2.3 and 2.4(b)) shall apply to any Transfer
of Shares by any Stockholder (i) to a Permitted Transferee of such Stockholder
or (ii) to the Company.
(b) Each Permitted Transferee of any Stockholder shall, and such
Stockholder shall cause such Permitted Transferee to, transfer back to such
9
Stockholder any Shares it owns prior to such Permitted Transferee ceasing to be
a Permitted Transferee of such Stockholder.
Section 2.5. No Transfer Period; Rights of First Offer. (a) The
Stockholders may not Transfer Shares prior to the first anniversary of the
Effective Date, except for Transfers referred to in Section 2.4. Commencing on
the first anniversary of the Effective Date, with the exception of Transfers in
accordance with Section 2.4, each Stockholder may Transfer Shares only
following compliance and in accordance with the provisions of this Section 2.5
and, as applicable, Sections 2.6 or 2.7.
(b) Any Stockholder desiring to Transfer Shares to any Third Party
(such Stockholder, in such capacity, a "Seller") shall give written notice (a
"Seller's Notice") to the other Stockholders and to the Company (i) stating
that such Seller desires to make such Transfer and (ii) setting forth the
number of Shares proposed to be Transferred (the "Offered Shares") and the cash
price per share that such Seller proposes to be paid for such Offered Shares
(the "Offer Price") and, to the extent then known, the other terms and
conditions of such Transfer, including the identity of any proposed transferee.
Each Seller's Notice shall constitute an irrevocable offer by the Seller to the
other Stockholders and to the Company of the Offered Shares at the Offer Price
in cash and in accordance with the terms of this Agreement.
(c) Within 60 days after receipt of a Seller's Notice, each other
Stockholder may elect to purchase, on a pro rata basis based upon the total
number of outstanding Shares then held by such other Stockholders (provided
that any Offered Shares thereby offered to any other Stockholder that does not
elect to purchase such Offered Shares shall be reallocated (on a pro rata basis
based on the total number of Offered Shares each other Stockholder elected to
purchase) among the remaining other Stockholders who have elected to exercise
their option to purchase Offered Shares) all (but not less than all) of the
Offered Shares allocated to it at the Offer Price in cash. The Company may
elect, within 10 days following the expiration of such 60-day period, to
purchase at the Offer Price in cash all (but not less than all) of the Offered
Shares as to which no election to purchase is made by the other Stockholders
within such 60-day period. The election to purchase such Offered Shares shall
be exercisable by delivery of a notice (a "Buyer's Notice") to the Seller, with
a copy to the Company (where the Company is not the electing party), stating
(i) that such electing party elects to purchase such Offered Shares at the
Offer Price in cash, (ii) that such election is irrevocable and (iii) the
source of financing for such purchase, which financing shall not be subject to
any material contingencies. Delivery of a Buyer's Notice shall constitute a
contract among the Seller and the electing party that has delivered such
Buyer's Notice for the sale and purchase of the Offered Shares at the Offer
Price in cash and upon the other applicable terms and conditions set forth in
the Seller's Notice.
(d) If the other Stockholders and the Company fail to elect to
purchase all of the Offered Shares within the time periods specified in Section
2.5(c), then the Seller may, within a period of 90 days following the
expiration of such time periods specified in Section 2.5(c), complete the
Transfer of all or any of the Offered Shares not purchased by the other
Stockholders or the Company to one or more Third Parties at a price per share
not less than 95% of the Offer Price; provided that if the purchase price per
share (the "Reduced Transfer Price") proposed to be paid by any such Third
Party for Offered Shares is less than 95% of the Offer Price, the Seller
10
shall promptly provide written notice (the "Reduced Transfer Price Notice") to
the other Stockholders and the Company of such intended Transfer (including the
material terms and conditions thereof) and the other Stockholders and the
Company shall have the right, exercisable by delivery of a written election
notice to the Seller within 30 days of receipt of such notice, to purchase such
Offered Shares at the Reduced Transfer Price and otherwise substantially in
accordance with the terms and conditions of the intended Transfer to such Third
Party, following which 30-day period, if no such election is made, Section
2.5(e) shall apply.
(e) If the other Stockholders and the Company fail to elect to
purchase all of the Offered Shares at the Reduced Transfer Price in cash within
the 30-day period specified in Section 2.5(d), then the Seller may, within a
period of 90 days following the expiration of such 30-day period, complete the
Transfer of all or any of the Offered Shares to one or more Third Parties at a
price per share not less than 95% of the Reduced Transfer Price; provided that
if the purchase price per share (the "Second Reduced Transfer Price") proposed
to be paid by any such Third Party for Offered Shares is less than 95% of the
Reduced Transfer Price, the Seller shall promptly provide written notice (the
"Second Transfer Price Notice") to the other Stockholders and the Company of
such intended Transfer (including the material terms and conditions thereof)
and the other Stockholders and the Company shall have the right, exercisable by
delivery of a written election notice to the Seller within 30 days of receipt
of such notice, to purchase such Offered Shares at the Second Reduced Transfer
Price and otherwise substantially in accordance with the terms and conditions
of the intended Transfer to such Third Party.
(f) If the other Stockholders and the Company fail to elect to
purchase all of the Offered Shares at the Offer Price (or, if applicable, the
Reduced Transfer Price or Second Reduced Transfer Price) in cash and the Seller
shall not have Transferred the Offered Shares to any Transferee prior to the
expiration of the 90-day period specified in Section 2.5(e), the rights of
first offer under this Section 2.5 shall again apply in connection with any
subsequent Transfer or offer to Transfer shares of Common Stock by such
Sellers.
Section 2.6. Tag Along Right. (a) If at any time on or after the
first anniversary of the Effective Date and prior to the consummation of an
Initial Public Offering, Xxxxxx and/or LBHI (and/or their Permitted
Transferees) proposes to Transfer Shares to any Person (other than a Permitted
Transferee) (each, a "Proposed Transferee") in any transaction or series of
related transactions and as a result of such Transfer, Xxxxxx and LBHI (with
their Permitted Transferees) would no longer own at least 35% of the issued and
outstanding Common Stock, then Xxxxxx shall send written notice to each
Management Investor and Lockheed Xxxxxx which shall state (i) that Xxxxxx
and/or LBHI and/or their Permitted Transferees desires to make such a Transfer,
(ii) the identity of the Proposed Transferee and the number of Shares proposed
to be sold or otherwise transferred, (iii) the proposed purchase price per
Share to be paid and the other terms and conditions of such Transfer and (iv)
the projected closing date of such Transfer, which in no event shall be prior
to 30 days after the giving of such written notice to each Management Investor
and Lockheed Xxxxxx.
(b) For a period of 30 days after the giving of the notice pursuant
to clause (a) above, each Management Investor and Lockheed Xxxxxx shall have
the right to sell to the Proposed Transferees in such Transfer at
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the same price and upon the same terms and conditions as Xxxxxx, LBHI (and/or
their Permitted Transferees) that percentage of the total number of Shares held
by such Management Investor or Lockheed Xxxxxx, as the case may be, equal to
the percentage of the total number of Shares then held by Xxxxxx, LBHI and
their Permitted Transferees proposed to be Transferred to such Proposed
Transferee; provided that neither Management Investor shall have the right to
sell any of its Shares Subject to Forfeiture pursuant to this Section 2.6(b) if
the price per share to be obtained by Xxxxxx in such Transfer is less than
$6.47.
(c) The rights of each Management Investor and Lockheed Xxxxxx under
Section 2.6(b) shall be exercisable by delivering written notice thereof, prior
to the expiration of the 30-day period referred to in clause (b) above, to
Xxxxxx with a copy to the Company; provided that Lockheed Xxxxxx shall not be
entitled to exercise any rights under this Section 2.6 if neither of the
Management Investors exercises his rights under this Section 2.6. The failure
of such Management Investor or Lockheed Xxxxxx to respond within such period to
Xxxxxx shall be deemed to be a waiver of rights under this Section 2.6.
(d) In the event that any Management Investor or Lockheed Xxxxxx
exercises rights under Section 2.6(b) and following such exercise there is a
change in the price or terms of the proposed transaction between Xxxxxx and the
Proposed Transferee, then Xxxxxx shall promptly notify such Management Investor
and Lockheed Xxxxxx of the revised price or terms and such Management Investor
or Lockheed Xxxxxx, as the case may be, shall have the right to exercise its
rights under Section 2.6(b) by notice to Xxxxxx within two business days of
receipt of the notice from Xxxxxx. The failure of such Management Investor or
Lockheed Xxxxxx to respond within such two-day period to Xxxxxx shall be deemed
to be a waiver of his or its rights under this Section 2.6.
(e) For purposes of determining the number of Shares a Management
Investor may Transfer pursuant to this Section 2.6, such Management Investor
shall be deemed to hold the shares of Common Stock issuable upon exercise of
any outstanding options to purchase Common Stock he holds so long as (i) such
options have vested and (ii) the exercise price of such options is below the
proposed price to be paid by the Proposed Transferee in the Transfer to which
such determination relates.
Section 2.7. Bring Along Right. (a) If at any time on or after the
first anniversary of the Effective Date and prior to the consummation of an
Initial Public Offering, Xxxxxx and/or LBHI (and/or their Permitted
Transferees) proposes to sell Shares to a Third Party other than an Affiliate
in any bona fide arm's-length transaction or series of related transactions and
as a result of such sale Xxxxxx and LBHI with their Permitted Transferees would
cease to own at least 35% of the issued and outstanding Common Stock, then
Xxxxxx shall have the right to deliver a written notice (a "Buyout Notice") to
each Management Investor (with a copy to Lockheed Xxxxxx) which shall state (i)
that Xxxxxx proposes to effect such transaction, (ii) the identity of the Third
Party, the number of Shares to be sold and the proposed purchase price per
Share to be paid and any other terms and conditions, and (iii) the projected
closing date of such sale. Each such Management Investor agrees that, upon
receipt of a Buyout Notice, each such Management Investor (and his Permitted
Transferees) shall be obligated to sell in such transaction that percentage of
the total number of Shares held by such Management Investor (determined on the
basis set forth in Section 2.6(e))
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equal to the percentage of the total number of Shares then held by Xxxxxx and
LBHI and their Permitted Transferees to be sold in such transaction upon the
terms and conditions of such transaction (and otherwise take all necessary
action to cause consummation of the proposed transaction; provided, however,
that each such Management Investor shall only be obligated as provided above in
this Section 2.7 if each such Management Investor receives the same per Share
consideration as Xxxxxx and LBHI (and/or their Permitted Transferees); and
provided further that in no event shall any Management Investor be required to
make any representations or provide any indemnities other than on a
proportionate basis and other than with respect to matters relating solely to
Xxxxxx and LBHI (and/or its Permitted Transferees), such as representations as
to title to Shares to be transferred by Xxxxxx and LBHI or their Permitted
Transferees.
(b) At any time that Xxxxxx exercises its rights under this Section
2.7, Lockheed Xxxxxx shall have the right, but not the obligation, to sell in
the transaction specified in the Buyout Notice at the same price and upon the
same terms and conditions as Xxxxxx and/or LBHI (and/or their Permitted
Transferees) and the Management Investors that percentage of the total number
of Shares held by Lockheed Xxxxxx equal to the percentage of the total number
of Shares then held by Xxxxxx and LBHI and their Permitted Transferees to be
sold in such transaction. The rights of Lockheed Xxxxxx under this Section
2.7(b) shall be exercisable by delivering written notice thereof at least 10
days prior to the proposed closing date of such transaction.
Section 2.8. Registration Rights. The Company hereby grants to each
Stockholder the registration and other rights set forth in, and each
Stockholder agrees to comply with the terms and conditions contained in,
Exhibit C.
ARTICLE III
CLOSING
Section 3.1. Closing. Any Stockholders acquiring or Transferring any
Shares pursuant to Section 2.5 shall mutually determine a closing date (the
"Transfer Closing Date") which, subject to any applicable regulatory waiting
periods, shall not be more than 60 days after the last notice is given with
respect to such Transfer pursuant to Section 2.5 or after the expiration of the
last notice period pursuant to Section 2.5 applicable to such Transfer. The
closing shall be held at 10:00 a.m., local time, on the Transfer Closing Date
at the principal office of the Company, or at such other time and/or place as
the parties may mutually agree.
Section 3.2. Deliveries at Closing; Method of Payment of Purchase
Price. On the Transfer Closing Date, each selling Stockholder shall deliver (i)
certificates representing the Shares being sold, free and clear of any lien,
claim or encumbrance, and (ii) such other documents, including evidence of
ownership and authority, as the Transferees may reasonably request. The
purchase price shall be paid by wire transfer of immediately available funds no
later than 2:00 p.m. on the Transfer Closing Date.
13
ARTICLE IV
ADDITIONAL RIGHTS AND OBLIGATIONS
OF STOCKHOLDERS AND THE COMPANY
Section 4.1. Preemptive Rights. If the Company shall (other than in
connection with the issuance of Shares or Share Equivalents (i) to employees,
officers and directors of or any of its direct or indirect subsidiaries with
respect to any employee benefit plan, incentive award program or other
compensation arrangement approved by the affirmative vote of a majority of the
outstanding shares and (ii) as all or a portion of the consideration for the
purchase of capital stock or assets of another Person) (A) issue any Shares,
(B) issue any Share Equivalents or (C) enter into any contracts, commitments,
agreements, understandings or arrangements of any kind relating to the issuance
of any Shares or Share Equivalents (in each case other than in connection with
the Initial Public Offering), each Stockholder shall have the right to purchase
that number of Shares (or Share Equivalents, as the case may be) at the same
purchase price as the price for the additional Shares (or Share Equivalents) to
be issued so that, after the issuance all of such Shares (or Share
Equivalents), together with all Shares (or Share Equivalents) to be issued
pursuant to this Section 4.1 in connection therewith, the Stockholder would, in
the aggregate, hold the same proportional interest of the outstanding Shares
(assuming, in the case of an issuance of Share Equivalents, the conversion,
exercise or exchange thereof) as was held by such Stockholder prior to the
issuance of such additional Shares (or Share Equivalents).
Section 4.2. Future Services. The Company agrees that Xxxxxx Brothers
Inc. ("Xxxxxx Brothers") shall have the right, but not the obligation, which
right shall be exercisable in Xxxxxx Brothers' sole discretion, to provide
investment banking services to the Company on an exclusive basis for a period
of five years from the Effective Date (the "Exclusivity Period"); provided that
as to acquisitions undertaken by the Company for cash, the Exclusivity Period
shall be the three year period after the Effective Date. Such services may
include arranging senior and subordinated debt financing for the Company,
underwriting on a sole managed basis or acting as the sole initial purchaser or
placement agent for the Company's or its affiliates' debt and/or equity
securities, acting as the exclusive financial advisor to the Company with
respect to any mergers, acquisitions or divestitures for which the services of
an investment banking firm are utilized and providing other financial advisory
services on an exclusive basis. In the event that Xxxxxx Brothers agrees to
provide any investment banking services to the Company, Xxxxxx Brothers shall
be paid fees to be mutually agreed upon based on fees which are competitive
based upon similar transactions and practices in the investment banking
industry. The Company acknowledges that Xxxxxx Brothers may determine in its
sole discretion for any reason (including, without limitation, the results of
its due diligence investigation, a material change in the Company's financial
condition, business, management, prospects or value, the lack of appropriate
internal Xxxxxx Brothers' committee approvals or then current market
conditions) not to provide such investment banking services to the Company. In
the event that Xxxxxx Brothers elects not to provide such services to the
Company with respect to any particular transaction, nothing contained herein
shall be deemed to prevent the Company from utilizing the services of another
investment banking firm for such transaction or to require the Company to pay a
fee to Xxxxxx Brothers with respect to such transaction, but such retention of
another investment banking firm shall be without prejudice to Xxxxxx Brothers'
rights hereunder with respect to subsequent transactions.
14
Section 4.3. Regulatory Event. If (a) the Company receives
notification from a representative of the Department of Defense or any other
U.S. government department, agency or authority that the ownership of Shares by
Xxxxxx and/or LBHI or the terms and provisions of this Agreement or the Charter
Documents (i) causes the Company to be under impermissible foreign ownership,
control or influence ("FOCI") within the meaning of Section 721 of Title VII of
the Defense Production Act of 1950, as amended by Section 5021 of the Omnibus
Trade and Competitiveness Act of 1988, or (ii) materially adversely affects the
ability of the Company to maintain or obtain Department of Defense or other
U.S. government department, agency or authority security clearance of the level
held by the Business and their employees on the Effective Date or which are
necessary or desirable for the Company to perform and to bid competitively on
U.S. government contracts and to participate in joint ventures formed to bid on
or perform U.S. government contracts of the type the Business is eligible to
bid on or participate in, respectively, on the Effective Date (any of the
matters described in this clause (ii) being referred to as "Adverse Clearance
Status"), and such FOCI or Adverse Clearance Status is not a result of a change
in (A) the ownership of Xxxxxx or LBHI from the ownership thereof as it exists
as of the Effective Date or (B) applicable law, regulations and decrees as in
effect as of the Effective Date, Xxxxxx and/or LBHI may, within 60 days of
becoming aware of such notification, upon delivery of a written notice (a
"Regulatory Event Notice") to the Company, require the Company (i) to
repurchase (the "Put") such portion of the Shares then held by Xxxxxx and/or
LBHI required to eliminate such FOCI or Adverse Clearance Status (the
"Regulatory Portion") for an amount in cash equal to the fair market value of
the shares subject to the Put as determined by an investment bank of national
reputation which is mutually acceptable to the Company (as determined by the
Board of Directors of the Company without the participation by any directors
designated by Xxxxxx pursuant to this Agreement) and Xxxxxx or (ii) to commence
a Public Offering which shall include the registration and offering of the
Regulatory Portion in accordance with the registration procedures contained in
Exhibit C; provided, that prior to delivery of any Regulatory Event Notice
Xxxxxx and/or LBHI shall have complied with Section 4.4; and provided further,
that the Company shall not be required to take any action under this Section
4.3 that it is prohibited from taking under the terms of any of its financing
agreements or under applicable law.
Section 4.4. Regulatory Compliance. (a) If any of the circumstances
described in Section 4.3 occur and would (x) cause the Company to be under FOCI
or (y) result in Adverse Clearance Status and such FOCI and Adverse Clearance
Status, if any, may be eliminated to the complete satisfaction of all
applicable U.S. government departments, agencies or authorities solely by the
adoption by Xxxxxx or LBHI or the Board of Directors of the Company of
governance procedures or board resolutions insulating the Company from
impermissible control or influence of any foreign entity in accordance with the
National Industrial Security Program Operating Manual (DOD 5220.22M), then
Xxxxxx or LBHI or the Board of Directors of the Company, shall adopt such
procedures or board resolutions, provided that such procedures and/or board
resolutions do not contravene and are consistent with applicable law and do not
materially and adversely affect the governance and other rights (whether
exercised directly or in accordance with such procedures) of Xxxxxx or LBHI
contained in this Agreement and the Charter Documents and any other agreements
or documents relating thereto.
(b) If such FOCI and Adverse Clearance Status, if any, are not
eliminated following compliance with paragraph (a) above, and such FOCI and
15
Adverse Clearance Status, if any, may be eliminated by a Transfer of Shares
held by Xxxxxx or LBHI to an Affiliate, Xxxxxx or LBHI, as the case may be,
shall use its reasonable efforts to effectuate such Transfer, provided that any
such Transfer shall not contravene, and is made in compliance with, Xxxxxx'x
and/or LBHI's customary business practices.
(c) If there is a change in the ownership of Xxxxxx from the
ownership thereof as it exists as of the Effective Date and such change in
ownership causes the Company to be under impermissible FOCI or otherwise
results in an Adverse Clearance Status, and such FOCI or Adverse Clearance
Status, as the case may be, cannot be eliminated through the procedures
contemplated by Section 4.4(a) or Section 4.4(b), the Company shall have the
option, exercisable within 30 days after it concludes that the measures
contemplated by Section 4.4(a) and Section 4.4(b) are not sufficient to
eliminate the FOCI or Adverse Clearance Status, to purchase (the "Call") the
Regulatory Portion of the Shares then held by Xxxxxx and/or LBHI for an amount
in cash equal to the fair market value of the Shares subject to the Call as
determined by an investment bank of national reputation which is mutually
acceptable to the Company (as determined by the Board of Directors of the
Company without the participation by any directors designated by Xxxxxx
pursuant to this Agreement) and Xxxxxx.
Section 4.5. Standstill Agreement. Lockheed Xxxxxx agrees that it
will not, and it will cause its Permitted Transferees not to, directly or
indirectly (through Affiliates or otherwise), acquire any shares of Common
Stock if immediately following such acquisition of shares of Common Stock,
Lockheed Xxxxxx and its Affiliates would own more than 34.9% of the outstanding
shares of Common Stock; provided that this Section 4.5 shall not limit any of
Lockheed Xxxxxx'x rights under Section 2.5 or Section 4.1 of this Agreement.
Section 4.6. Certain Other Agreements. If at any time prior to
Payment in Full of the Preference Amount a merger or other similar transaction
is consummated pursuant to which 90% or more of the outstanding equity
interests in the Company are acquired by a Person other than an Affiliate of
Xxxxxx at a price per share which is less than $6.47 (an "Acquisition
Transaction"), then each of the Stockholders agrees to enter into such other
agreements or other arrangements as may be required in order that the proceeds
to the Stockholders from such Acquisition Transaction are distributed as among
the holders of each class of Common Stock in a manner comparable to the manner
in which such proceeds would be distributed in a distribution of assets of the
Company in the event of any voluntary or involuntary liquidation, dissolution
or winding-up of the Company in accordance with the terms of the Certificate of
Incorporation.
ARTICLE V
CERTAIN VOTING AGREEMENTS
Section 5.1. Board of Directors of the Company. (a) The Company's
Board of Directors shall be initially composed of eleven members. Xxxxxx shall
be entitled, but not required, to designate six members (the "Xxxxxx Nominees")
of the Board of Directors. Lockheed Xxxxxx shall be entitled, but not required,
to designate three members (the "Lockheed Xxxxxx Nominees") of the Board of
Directors. In addition, each of Xxxxx and XxXxxxx shall be entitled, but not
required, to designate themselves as members of the Board of Directors for so
long as they are employees of the Company or
16
any of its Subsidiaries (the "Xxxxx Nominee" and "XxXxxxx Nominee",
respectively).
(b) (i) Each of the Stockholders agrees to vote all of the Shares of
Class A Common Stock owned or held of record by such Stockholder at any regular
or special meeting of the stockholders of the Company called for the purpose of
filling positions on the Board of Directors, or in any written consent executed
in lieu of such a meeting of stockholders, and agrees to take all actions
otherwise necessary, to ensure the election to the Board of Directors of the
Xxxxxx Nominees, the Lockheed Xxxxxx Nominees, the Xxxxx Nominee and the
XxXxxxx Nominee in accordance with the terms hereof.
(ii) Each of the Company and each Stockholder hereby agrees to use
its or his best efforts to call, or cause the appropriate officers and
directors of the Company to call, a special meeting of stockholders of the
Company and to vote all of the Shares of Class A Common Stock owned or held of
record by such Stockholder for, or to take all actions by written consent in
lieu of any such meeting necessary to cause, the removal (with or without
cause) of (i) any Xxxxxx Nominee if Xxxxxx requests such director's removal for
any reason and (ii) any Lockheed Xxxxxx Nominee if Lockheed Xxxxxx requests
such director's removal for any reason. Xxxxxx and Lockheed Xxxxxx shall have
the right to designate a new nominee in the event any Xxxxxx Nominee or
Lockheed Xxxxxx Nominee, respectively, shall be so removed or shall vacate his
or her directorship for any reason.
(c) Except as provided in Section 5.1(b)(ii) hereof, each Stockholder
hereby agrees that, at any time that it or he is then entitled to vote for the
election or removal of directors, it will not vote in favor of the removal of
any Xxxxxx Nominee, Lockheed Xxxxxx Nominee, Xxxxx Nominee or XxXxxxx Nominee,
unless such removal shall be for Cause. For the purposes of this Section
5.1(c), "Cause" shall mean (i) as to any Xxxxxx Nominee or Lockheed Xxxxxx
Nominee, the gross neglect of or willful and continuing refusal to
substantially perform his duties as a director, the willful engaging by a
director in conduct which is demonstrably and materially injurious to the
Company or the director's conviction of any crime constituting a felony and
(ii) as to any Management Investor, gross neglect of or willful and continuing
refusal to substantially perform his duties as a director or employee, any
breach of the restrictive covenants contained in such Management Investor's
employment agreement with the Company or any of its Subsidiaries, willful
engaging in conduct which is demonstrably injurious to the Company or the
Company's subsidiaries or affiliates or conviction or plea of guilty or nolo
contendere to a felony or a misdemeanor involving moral turpitude.
(d) The number of directors which Xxxxxx and Lockheed Xxxxxx have
the right to designate pursuant to Section 5.1(a) shall be reduced from time
to time to take into account any reduction in Xxxxxx'x and Lockheed Xxxxxx'x
(in either case, together with its Permitted Transferees) ownership level in
the issued and outstanding shares of Common Stock so that the percentage of
the total number of directors designated by each such party corresponds as
nearly as practicable to the percentage ownership of such party (with its
Permitted Transferees) of the issued and outstanding shares of Common Stock;
provided that so long as Xxxxxx (with its Permitted Transferees) continues to
own at least 35% of the issued and outstanding Common Stock, the directors
designated by Xxxxxx pursuant to Section 5.1(a) shall constitute a majority
of the Board of Directors so long as Xxxxxx (with its Permitted Transferees)
continues to represent the largest single stockholder of the Company. The
17
Stockholders' obligations under Section 5.1(b) and (c) shall remain in effect
with respect to the Xxxxxx Nominees and Lockheed Xxxxxx Nominees, as reduced
pursuant to the preceding sentence.
(e) The rights of Xxxxxx, Lockheed Xxxxxx, Xxxxx and XxXxxxx to
designate Board members under Section 5.1(a) shall not be assignable (including
to any Transferee of Shares).
Section 5.2. Charter Documents. (a) Exhibits A and B set forth
copies of the Certificate of Incorporation and By-laws of the Company, each
in the form in which it is to be in effect on the Effective Date (the
"Charter Documents").
(b) The Company covenants and agrees that it will act in accordance
with the Charter Documents. Each Stockholder covenants and agrees that it will
vote all the Shares owned or held of record by such Stockholder at any regular
or special meeting of stockholders of the Company or in any written consent
executed in lieu of such a meeting of stockholders, and shall take all action
necessary, to ensure that the Charter Documents do not, at any time, conflict
with the provisions of this Agreement.
Section 5.3. Consent to an Initial Public Offering; Required IPO. (a)
Prior to the first anniversary of the Effective Date, the Company shall not
commence an Initial Public Offering without the affirmative vote of (i) a
majority of the Xxxxxx Nominees, (ii) a majority of the Lockheed Xxxxxx
Nominees, (iii) the Xxxxx Nominee and (iv) the XxXxxxx Nominee.
(b) At any time on or after the fifth anniversary of the Effective
Date, if an Initial Public Offering shall not have been consummated prior to
such date, Xxxxxx or Lockheed Xxxxxx (in each case, provided that it and its
Permitted Transferees then own at least 50% of the issued and outstanding
Common Stock owned by such party on the Effective Date) may require the Company
promptly to commence an Initial Public Offering and to complete such Initial
Public Offering as soon as reasonably practicable in accordance with the
registration procedures contained in Exhibit C. The rights of Xxxxxx and
Lockheed Xxxxxx under this Section 5.3(b) shall not be assignable (including to
any Transferee of Shares).
ARTICLE VI
TERMINATION
Section 6.1. Termination. The provisions of this Agreement, other
than Sections 2.8, 4.2 and 4.5 shall terminate upon the consummation of an
Initial Public Offering. Section 2.8 and the registration rights contained in
Exhibit C shall continue to apply following such consummation with respect to
all Registrable Securities (as defined in Exhibit C) in accordance with the
terms thereof. Section 4.2 shall continue to apply following the consummation
of an Initial Public Offering until the earlier of the expiration of the
Exclusivity Period or the date on which Xxxxxx (together with its Permitted
Transferees) ceases to own at least 10% of the outstanding shares of Common
Stock. Section 4.5 shall continue to apply following such consummation until
the fifth anniversary of the Effective Date.
18
ARTICLE VII
MISCELLANEOUS
Section 7.1. No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Stockholders in this Agreement.
Section 7.2. Recapitalization, Exchanges, etc. In the event that any
capital stock or other securities are issued in respect of, in exchange for, or
in substitution of, any Shares by reason of any reorganization,
recapitalization, reclassification, merger, consolidation, spin-off, partial or
complete liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the Shares or any other change in capital
structure of the Company, appropriate adjustments shall be made with respect to
the relevant provisions of this Agreement so as to fairly and equitably
preserve, as far as practicable, the original rights and obligations of the
parties hereto under this Agreement and the term "Shares," as used herein,
shall be deemed to include shares of such capital stock or other securities, as
appropriate.
Section 7.3. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, and their respective
successors and permitted assigns.
Section 7.4. No Waivers, Amendments. (a) No failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
(b) No amendment, modification or supplement to this Agreement shall
be enforced against any holder unless such amendment, modification or
supplement is signed by (i) where such holder is Xxxxxx or LBHI or one of their
Permitted Transferees, a majority of the Shares held by Xxxxxx and LBHI and its
Permitted Transferees, (ii) where such holder is Lockheed Xxxxxx or one of
their Permitted Transferees, a majority of the Shares held by Lockheed Xxxxxx
and its Permitted Transferees, (iii) where such holder is Xxxxx or one of his
Permitted Transferees, a majority of the Shares held by Xxxxx and his Permitted
Transferees and (iv) where such holder is XxXxxxx or one of his Permitted
Transferees, a majority of the Shares held by XxXxxxx and his Permitted
Transferees.
(c) Any provision of this Agreement may be waived if, but only if,
such waiver is in writing and is signed by the party against whom the
enforcement of such waiver is sought.
Section 7.5. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telex, telecopier or
similar writing) and shall be given to such party at its address, telex or
telecopier number set forth below, or such other address, telex or telecopier
number as such party may hereinafter specify for the purpose to the party
giving such notice. Each such notice, request or other communication shall be
effective (i) if given by telex or telecopy, when such telex or telecopy is
transmitted to the telex or telecopy number specified in this Section and the
appropriate answerback is received or, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first
19
class postage prepaid, addressed as aforesaid or, (iii) if given by any other
means, when delivered at the address specified in this Section 7.5.
Notices to the Company shall be addressed to the Company at L-3
Communications Holdings, Inc., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: General Counsel (telecopier no. (000) 000-0000) with a copy thereof
to Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx X. Xxxxxxxx (telecopier (000) 000-0000); notices to Xxxxxx or
LBHI shall be addressed to Xxxxxx Brothers Capital Partners III, L.P. or Xxxxxx
Brothers Holdings Inc., as the case may be, 3 World Financial Center, New York,
New York 10285, Attention: Xxxxxx Xxxxxxxxxx (telecopier (000) 000-0000) with a
copy thereof to Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxx X. Xxxxxxxx (telecopier (000) 000-0000); notices
to Lockheed Xxxxxx shall be addressed to Lockheed Xxxxxx at Lockheed Xxxxxx
Corporation, 0000 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx
X. Xxxxxxx (telecopier (000) 000-0000) with a copy thereof to Lockheed Xxxxxx
Corporation, 0000 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx
X. Xxxxxxx, Xx. (telecopier (000) 000-0000) and to Miles & Stockbridge, a
Professional Corporation, 00 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxx X. Xxxxxxxx (telecopier (000) 000-0000); notices to Xxxxx and
XxXxxxx shall be addressed to Xxxxx and XxXxxxx, respectively, at L-3
Communications Holdings, Inc., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(telecopier (000) 000-0000, as to Xxxxx and (000) 000-0000, as to XxXxxxx) with
a copy thereof to Fried, Frank, Harris, Xxxxxxx and Xxxxxxxx, 0 Xxx Xxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxx X. Xxxxxxxxx (telecopier (212)
859-8879).
Section 7.6. Inspection. So long as this Agreement shall be in
effect, this Agreement and any amendments hereto shall be made available for
inspection by a Stockholder at the principal offices of the Company.
SECTION 7.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 7.8. Section Headings. The section headings contained in
this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
Section 7.9. Entire Agreement. This Agreement, together with the
Subscription Agreements, constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, written or oral, relating to the subject matter hereof.
Section 7.10. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdictions, it
being intended that all rights and obligations of the parties hereunder shall
be enforceable to the fullest extent permitted by law.
Section 7.11. Counterparts. This Agreement may be signed in
counterparts, each of which shall constitute an original and which together
shall constitute one and the same agreement.
20
Section 7.12. Option Plan. Each of the Stockholders agrees to vote
all of the Shares of Class A Common Stock owned or held of record by such
Stockholder at any regular or special meeting of the stockholders of the
Company called for the purpose of approving the Option Plan or in any written
consent executed in lieu of such a meeting of stockholders (and the Company
agrees to use reasonable efforts to cause such meeting to occur promptly), and
agrees to take all actions otherwise necessary, to ensure the approval of the
Option Plan in accordance with the terms hereof.
21
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date set forth above.
L-3 COMMUNICATIONS
HOLDINGS, INC.
By:_________________________________
Title:
LOCKHEED XXXXXX CORPORATION
By:_________________________________
Title:
XXXXXX BROTHERS CAPITAL
PARTNERS III, L.P.
By: Xxxxxx Brothers Holdings Inc.,
its general partner
By:_________________________________
Title:
XXXXXX BROTHERS HOLDINGS INC.
By:_________________________________
Title:
------------------------------------
Xxxxx X. Xxxxx
------------------------------------
Xxxxxx X. XxXxxxx
22
EXHIBIT A to
Stockholders
Agreement
Bylaws -- Please see Exhibit 3.2 to the Registration Statement.
EXHIBIT B to
Stockholders
Agreement
Certificate of Incorporation -- Please see Exhibit 3.1 to the
Registration Statement
EXHIBIT C to
Stockholders
Agreement
================================================================================
A/B Exchange
Registration Rights Agreement
Dated as of April __, 1997
by and among
L-3 Communications Corporation,
Xxxxxx Brothers Inc.
and
BancAmerica Securities, Inc.
================================================================================
A/B EXCHANGE
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of April 30, 1997 by and among L-3 Communications Corporation, a
Delaware corporation (the "Company"), and Xxxxxx Brothers Inc. and BancAmerica
Securities, Inc. (together, the "Initial Purchasers"), each of whom has agreed
to purchase the Company's 10 3/8% Senior Subordinated Notes due 2007 (the
"Series A Notes") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated April 25,
1997 (the "Purchase Agreement"), by and among the Company and the Initial
Purchasers. In order to induce the Initial Purchasers to purchase the Series A
Notes, the Company has agreed to provide the registration rights set forth in
this Agreement. The execution and delivery of this Agreement is a condition to
the obligations of the Initial Purchasers set forth in Section 3 of the Purchase
Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Act: The Securities Act of 1933, as amended.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: Series B Notes (including
any Subsidiary Guarantees) that are acquired by a Restricted Broker-Dealer for
its own account as a result of market-making activities or other trading
activities.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company
to the Registrar under the Indenture of Series B Notes in the same aggregate
principal amount as the aggregate principal amount of Series A Notes that were
tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Series A Notes, each Interest
Payment Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the Act of the
Series B Notes (including any Subsidiary Guarantees) pursuant to a Registration
Statement pursuant to which the Company offers the Holders of all outstanding
Transfer Restricted Securities the opportunity to exchange all such outstanding
Transfer Restricted Securities held by such Holders for Series B Notes and
registered Subsidiary Guarantees in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers propose
to sell the Series A Notes to (i) certain "qualified institutional buyers," as
such term is defined in Rule 144A under the Act, (ii) to certain institutional
"accredited investors," as such term is defined in Rule 501(a)(1), (2), (3) and
(7) under the Act ("Accredited Institutions") and (iii) outside the United
States to Persons other than U.S. Persons in offshore transactions meeting the
requirements of rule 904 of Regulation S under the Act.
Guarantor: Any subsidiary of the Company that executes a Subsidiary
Guarantee under the Indenture.
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated as of the date hereof, 1997, among the
Company and The Bank of New York, as trustee (the "Trustee"), pursuant to which
the Notes are to be issued, as such Indenture is amended or supplemented from
time to time in accordance with the terms thereof.
Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: As defined in the Indenture and the Notes.
Market-Maker Prospectus: As defined in Section 4 hereof.
NASD: National Association of Securities Dealers, Inc.
Notes: The Series A Notes and the Series B Notes.
2
Person: An individual, partnership, corporation, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement including,
without limitation, a Market-Maker Prospectus, as amended or supplemented by any
prospectus supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference into such
Prospectus.
Record Holder: With respect to any Damages Payment Date relating to Notes,
each Person who is a Holder of Notes on the record date with respect to the
Interest Payment Date on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any Registration Statement of the Company relating
to (a) an offering of Series B Notes pursuant to an Exchange Offer or (b) the
registration for resale of Transfer Restricted Securities pursuant to the Shelf
Registration Statement, which is filed pursuant to the provisions of this
Agreement including the registration for resale of Broker-Dealer Transfer
Restricted Securities, in each case including the Prospectus included therein,
all amendments and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer that is an affiliate of the
Company that the holds Broker-Dealer Transfer Restricted Securities.
Series B Notes: The Company's l0 3/8% Senior Subordinated Notes due 2007
to be issued pursuant to the Indenture in the Exchange Offer.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
Subsidiary Guarantee: The Guarantee by a Guarantor of the Company's
obligations under the Notes and Indenture.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note (including any Subsidiary
Guarantee), until the earliest to occur of (a) the date on which such Note is
exchanged in the Exchange Offer and entitled to be resold to the public by the
Holder thereof without complying with the prospectus delivery requirements of
the Act, (b) the date on which such Note (including any Subsidiary Guarantee)
has been effectively registered under the Act and disposed of in accordance with
a Shelf Registration Statement and (c) the date on which such Note (including
any Subsidiary Guarantee) is distributed to the public pursuant to Rule 144
under the Act or by a Broker-Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including delivery of
the Prospectus contained therein).
3
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities and Broker-Dealer Transfer Restricted
Securities. The securities entitled to the benefits of this Agreement are the
Transfer Restricted Securities and Broker-Dealer Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to be a
holder of Transfer Restricted Securities (each, a "Holder") whenever such Person
owns Transfer Restricted Securities.
(c) Holders of Broker-Dealer Transfer Restricted Securities. A Restricted
Broker-Dealer is deemed to be a holder of Broker-Dealer Transfer Restricted
Securities (each, a "Holder") whenever such Restricted Broker-Dealer owns
Broker-Dealer Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under applicable
law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with), the Company shall (i) cause to be filed with the
Commission as soon as practicable after the Closing Date, but in no event later
than 90 days after the Closing Date, a Registration Statement under the Act
relating to the Series B Notes (including any Subsidiary Guarantees) and the
Exchange Offer, (ii) use all commercially reasonable efforts to cause such
Registration Statement to become effective at the earliest possible time, but in
no event later than 150 days after the Closing Date (which 150-day period shall
be extended for a number of days equal to the number of business days, if any,
the Commission is officially closed during such period), (iii) in connection
with the foregoing, file (A) all pre-effective amendments to such Registration
Statement as may be necessary in order to cause such Registration Statement to
become effective, (B) if applicable, a post-effective amendment to such
Registration Statement pursuant to Rule 430A under the Act and (C) cause all
necessary filings in connection with the registration and qualification of the
Series B Notes (including any Subsidiary Guarantees) to be made under the Blue
Sky laws of such jurisdictions as are necessary to permit Consummation of the
Exchange Offer, and (iv) upon the effectiveness of such Registration Statement,
commence the Exchange Offer. The Exchange Offer shall be on the appropriate form
permitting registration of the Series B Notes (including any Subsidiary
Guarantees) to be offered in exchange for the Transfer Restricted Securities and
to permit resales of Notes held by Broker-Dealers as contemplated by Section
3(c) below.
(b) The Company shall cause the Exchange Offer Registration Statement to
be effective continuously and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 business
4
days. The Company shall cause the Exchange Offer to comply with all applicable
federal and state securities laws. No securities other than the Notes (including
any Subsidiary Guarantees) shall be included in the Exchange Offer Registration
Statement. The Company shall use its best efforts to cause the Exchange Offer to
be Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
business days thereafter.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus contained in the Exchange Offer Registration
Statement that any Broker-Dealer who holds Series A Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company), may exchange such
Series A Notes pursuant to the Exchange Offer; however, such Broker-Dealer may
be deemed to be an "underwriter" within the meaning of the Act and must,
therefore, deliver a Prospectus meeting the requirements of the Act in
connection with any resales of the Series B Notes received by such Broker-Dealer
in the Exchange Offer, which Prospectus delivery requirement may be satisfied by
the delivery by such Broker-Dealer of the Prospectus contained in the Exchange
Offer Registration Statement. Such "Plan of Distribution" section shall also
contain all other information with respect to such resales by Broker-Dealers
that the Commission may require in order to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer
or disclose the amount of Notes held by any such Broker-Dealer except to the
extent required by the Commission.
The Company shall use all commercially reasonable efforts to keep the
Exchange Offer Registration Statement continuously effective, supplemented and
amended as required by the provisions of Section 6(d) below to the extent
necessary to ensure that it is available for resales of Notes acquired by
Broker-Dealers for their own accounts as a result of market-making activities or
other trading activities, and to ensure that it conforms with the requirements
of this Agreement, the Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period of 180 days from the
date on which the Exchange Offer Registration Statement is declared effective.
The Company shall provide sufficient copies of the latest version of such
Prospectus to Broker-Dealers promptly upon request at any time during such 180
day period in order to facilitate such resales.
SECTION 4. SHELF REGISTRATION; MARKET-MAKER PROSPECTUS
(a) Shelf Registration. If (i) the Company is not required to file an
Exchange Offer Registration Statement or to Consummate the Exchange Offer
because the Exchange Offer is not permitted by applicable law or Commission
policy (after the procedures set forth in Section 6(a) below have been complied
with) or (ii) if any Holder of Transfer Restricted Securities that is a
"qualified institutional buyer," as such term is defined in Rule 144A under the
Act or an institutional "accredited investor," as such term is defined in Rule
501(a)(1), (2), (3) and (7) under the Act shall notify the Company prior to the
20th business day following the Consummation of the Exchange Offer that such
Holder alone or together with holders who
5
hold in the aggregate at least $1.0 million in principal amount of Series A
Notes (A) is prohibited by applicable law or Commission policy from
participating in the Exchange Offer, or (B) may not resell the Series B Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and that the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder, or
(C) is a Broker-Dealer and holds Series A Notes acquired directly from the
Company or one of its affiliates, then the Company shall
(x) cause to be filed a shelf Registration Statement pursuant to
Rule 415 under the Act, which may be an amendment to the Exchange Offer
Registration Statement (in either event, the "Shelf Registration
Statement") on or prior to the earliest to occur of (1) the 30th day after
the date on which the Company determines that it is not required to file
the Exchange Offer Registration Statement, or permitted to Consummate the
Exchange Offer and (2) the 30th day after the date on which the Company
receives notice from a Holder of Transfer Restricted Securities as
contemplated by clause (ii) of paragraph (a) above (such earliest date
being the "Shelf Filing Deadline"), which Shelf Registration Statement
shall provide for resales of all Transfer Restricted Securities the
Holders of which shall have provided the information required pursuant to
Section 4(b) hereof; and
(y) use all commercially reasonable efforts to cause such Shelf
Registration Statement to be declared effective by the Commission on or
before the 90th day after the Shelf Filing Deadline.
The Company shall use all commercially reasonable to keep such Shelf
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 6(b) and (d) hereof to the extent
necessary to ensure that it is available for resales of Notes by the Holders of
Transfer Restricted Securities entitled to the benefit of this Section 4(a), and
to ensure that it conforms with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from time to
time, for a period of at least two years following the Closing Date or such
shorter period that will terminate when all Notes covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement or become eligible for resale pursuant to Rule 144 without volume or
other restrictions.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 10 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have used its best efforts to provide all such reasonably
requested information. Each Holder as to which any Shelf Registration Statement
is being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.
6
(c) Market-Maker Prospectus. The Company acknowledges that any Restricted
Broker-Dealer holding Broker-Dealer Transfer Restricted Securities may not
resell such Broker-Dealer Transfer Restricted Securities without delivering a
Prospectus. Consequently, on the date that the Exchange Offer Registration
Statement is filed with the Commission, the Company shall file a Registration
Statement (which may be the Exchange Offer Registration Statement or the Shelf
Registration Statement if permitted by the rules and regulations of the
Commission) and shall use their best efforts to cause such Registration
Statement to be declared effective by the Commission on or prior to the
Consummation of the Exchange Offer. The Company shall use all commercially
reasonable efforts to keep such Registration Statement continuously effective,
supplemented and amended as required by the provisions of Sections 6(c) and (d)
hereof to the extent necessary to ensure that it is available for resales of
Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers, and
to ensure that it conforms with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from time to
time, until such time as all Restricted Broker-Dealers determine in their
judgment that they are no longer required to deliver a Prospectus in connection
with sales of Broker-Dealer Transfer Restricted Securities. The Prospectus
included in such Registration Statement is referred to in this Agreement as a
"Market-Maker Prospectus."
SECTION 5. LIQUIDATED DAMAGES
If (i) any of the Registration Statements required by this Agreement is
not filed with the Commission on or prior to the date specified for such filing
in sections 3(a), 4(a), and 4(c), as applicable, (ii) any of such required
Registration Statements has not been declared effective by the Commission on or
prior to the date specified for such effectiveness in sections 3(a), 4(a), and
4(c), as applicable, (the "Effectiveness Target Date"), (iii) the Exchange Offer
has not been Consummated within 30 business days after the Effectiveness Target
Date with respect to the Exchange Offer Registration Statement or (iv) any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose without being succeeded immediately by a post-effective
amendment to such Registration Statement that cures such failure and that is
itself immediately declared effective (each such event referred to in clauses
(i) through (iv), a "Registration Default"), the Company agrees to pay
liquidated damages to each Holder of Transfer Restricted Securities with respect
to the first 90-day period immediately following the occurrence of such
Registration Default, in an amount equal to $.05 per week per $1,000 principal
amount of Transfer Restricted Securities held by such Holder for each week or
portion thereof that the Registration Default continues. The amount of the
liquidated damages shall increase by an additional $.05 per week per $1,000 in
principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of liquidated damages of $.50 per week per $1,000 principal
amount of Transfer Restricted Securities. All accrued liquidated damages shall
be paid to Record Holders by the Company by wire transfer of immediately
available funds or by federal funds check on each Damages Payment Date, as
provided in the Indenture. Following the cure of all Registration Defaults
relating to any particular Transfer Restricted Securities, the accrual of
liquidated damages with respect to such Transfer Restricted Securities will
cease.
7
All payment obligations of the Company set forth in the preceding
paragraph that are outstanding with respect to any Transfer Restricted Security
at the time such security ceases to be a Transfer Restricted Security shall
survive until such time as all such payment obligations with respect to such
Security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Company shall comply with all of the provisions of Section 6(d)
below, shall use all commercially reasonable efforts to effect such exchange to
permit the sale of Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof, and shall comply with
all of the following provisions:
(i) If in the reasonable opinion of counsel to the Company there is
a question as to whether the Exchange Offer is permitted by applicable
law, the Company hereby agrees to seek a no-action letter or other
favorable decision from the Commission allowing the Company to Consummate
an Exchange Offer for such Series A Notes. The Company hereby agrees to
pursue the issuance of such a decision to the Commission staff level but
shall not be required to take commercially unreasonable action to effect a
change of Commission policy. The Company hereby agrees, however, to (A)
participate in telephonic conferences with the Commission, (B) deliver to
the Commission staff an analysis prepared by counsel to the Company
setting forth the legal bases, if any, upon which such counsel has
concluded that such an Exchange Offer should be permitted and (C)
diligently pursue a resolution (which need not be favorable) by the
Commission staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation thereof, a written representation to the Company
(which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Company, (B) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the Series B Notes to be issued in the
Exchange Offer and (C) it is acquiring the Series B Notes in its ordinary
course of business. In addition, all such Holders of Transfer Restricted
Securities shall otherwise cooperate in the Company's preparations for the
Exchange Offer. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to participate
in a distribution of the securities to be acquired in the Exchange Offer
(1) could not under Commission policy as in effect on the date of this
Agreement rely on the position of the Commission enunciated in Xxxxxx
Xxxxxxx and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
Corporation (available May 13, 1988), as interpreted in the Commission's
letter to Shearman & Sterling dated July 2, 1993, mid similar no-action
letters (including any no-action letter obtained pursuant to clause (i)
above), and (2) must comply with the registration and prospectus delivery
requirements of the Act in connection with a secondary resale transaction
and that such a secondary resale transaction should be covered by an
effective Registration Statement
8
containing the selling security holder information required by Item 507 or
508, as applicable, of Regulation S-K if the resales are of Series B Notes
obtained by such Holder in exchange for Series A Notes acquired by such
Holder directly from the Company.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company shall provide a supplemental letter to the
Commission (A) stating that the Company is registering the Exchange Offer
in reliance on the position of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988), Xxxxxx Xxxxxxx and Co.,
Inc. (available June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) above and (B) including a representation
that the Company has not entered into any arrangement or understanding
with any Person to distribute the Series B Notes to be received in the
Exchange Offer and that, to the best of the Company's information and
belief, each Holder participating in the Exchange Offer is acquiring the
Series B Notes in its ordinary course of business and has no arrangement
or understanding with any Person to participate in the distribution of the
Series B Notes received in the Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 6(d) below and shall use all commercially reasonable efforts to effect
such registration to permit the sale of the Transfer Restricted Securities being
sold in accordance with the intended method or methods of distribution thereof,
and pursuant thereto the Company will as expeditiously as possible prepare and
file with the Commission a Registration Statement relating to the registration
on any appropriate form under the Act, which form shall be available for the
sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof.
(c) Market-Maker Prospectus. In connection with any Registration Statement
filed pursuant to Section 4(c) of this Agreement, the Company will comply with
all of the provisions of Section 6(d) below (other than sub-sections (xiii),
(xiv), (xv), (xvii) and (xx)) until such time as all Restricted Broker-Dealers
determine in their judgment that they are no longer required to deliver
Market-Maker Prospectuses in connection with sales of Broker-Dealer Transfer
Restricted Securities. The Company shall use all commercially reasonable efforts
to deliver Market-Maker Prospectuses to all Restricted Broker-Dealers
immediately upon the effectiveness of the Registration Statement and from time
to time thereafter upon request, in such quantities as such Restricted
Broker-Dealer shall require.
(d) General Provisions. In connection with any Registration Statement and
any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of Notes by
Broker-Dealers) and Broker-Dealer Transfer Restricted Securities, the Company
shall:
(i) use all commercially reasonable efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements (including, if required by the Act or any regulation
thereunder, financial statements of any Guarantors) for the period
specified in Section 3 or 4 of this Agreement, as applicable; upon the
occurrence of any event that would cause any such Registration Statement
or the Prospectus contained therein (A) to contain a material misstatement
or omission or (B) not to be effective and
9
usable for resale of Transfer Restricted Securities or Broker-Dealer
Transfer Restricted Securities during the period required by this
Agreement, the Company shall file promptly an appropriate amendment to
such Registration Statement, in the case of clause (A), correcting any
such misstatement or omission, and, in the case of either clause (A) or
(B), use all commercially reasonable efforts to cause such amendment to be
declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter. Notwithstanding the foregoing, at any time after
Consummation of the Exchange Offer, the Company may allow the Shelf
Registration Statement or Market-Maker Prospectus and the related
Registration Statement to cease to become effective and usable if (x) the
board of directors of the Company determines in good faith that it is in
the best interests of the Company not to disclose the existence of or
facts surrounding any proposed or pending material corporate transaction
involving the Company, and the Company notifies the Holders within two
business days after the Board of Directors makes such determination, or
(y) the Prospectus contained in the Shelf Registration Statement or the
Market-Maker Prospectus, as the case may be, contains an untrue statement
of the material fact or omits to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading; provided that the two-year period referred
to in Section 4(a) hereof during which the Shelf Registration Statement is
required to be effective and usable shall be extended by the number of
days during which such Registration Statement was not effective or usable
pursuant to the foregoing provisions;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, as applicable; cause the
Prospectus to be supplemented by any required Prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 under the Act, and to
comply fully with the applicable provisions of Rules 424 and 430A under
the Act in a timely manner; and comply with the provisions of the Act with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended
method or methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders of
Transfer Restricted Securities and, following the Consummation of the
Exchange Offer, Holders of Broker Dealer Transfer Restricted Securities,
promptly and, if requested by such Persons, to confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto, when the
same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to
the Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement under the Act or of the suspension by any
state securities commission of the qualification of the Transfer
Restricted Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, for offering or sale in any jurisdiction, or the initiation of
any proceeding for any of the preceding purposes, (D) of the existence of
any fact or the happening of any event that makes any statement of a
material fact made in the
10
Registration Statement, the Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the Registration
Statement or the Prospectus in order to make the statements therein not
misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, under state securities or Blue Sky laws, the
Company shall use all commercially reasonable efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(iv) furnish to each of the selling Holders of Transfer Restricted
Securities or Holders of Broker-Dealer Transfer-Restricted Securities and
each of the underwriter(s), if any, before filing with the Commission,
copies of any Registration Statement or any Prospectus included therein or
any amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review of such Holders and underwriter(s), if any, for a
period of at least five business days, and the Company will not file any
such Registration Statement or Prospectus or any amendment or supplement
to any such Registration Statement or Prospectus (including all such
documents incorporated by reference) if a selling Holder of Transfer
Restricted Securities or a Holder of Broker-Dealer Transfer Restricted
Securities, as applicable, covered by such Registration Statement or the
underwriter(s), if any, shall not have had an opportunity to participate
in the preparation thereof;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders or the Holders of
Broker-Dealer Transfer Restricted Securities, as applicable, and to the
underwriter(s), if any, make the Company's representatives available for
discussion of such document and other customary due diligence matters, and
include such information in such document prior to the filing thereof as
such selling Holders or the Holders of Broker-Dealer Transfer Restricted
Securities, as applicable, or underwriter(s), if any, reasonably may
request;
(vi) make available at reasonable times at the Company's principal
place of business for inspection by the selling Holders of Transfer
Restricted Securities, any underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney or accountant
retained by such selling Holders or any of the underwriter(s) who shall
certify to the Company that they have a current intention to sell Transfer
Restricted Securities or Broker-Dealer Transfer Restricted Securities
pursuant to a Shelf Registration Statement or Market-Maker Prospectus,
and, following the Consummation of the Exchange Offer, the Holders of
Broker-Dealer Transfer Restricted Securities, such financial and other
information of the Company as reasonably requested and cause the Company's
officers, directors and employees to respond to such inquiries as shall be
reasonably necessary, in the reasonable judgment of counsel to such
Holders, to conduct a reasonable investigation; provided, however, that
each such party shall be required to maintain in confidence and not to
disclose to any other person any information or records
11
reasonably designated by the Company in writing as being confidential,
until such time as (A) such information becomes a matter of public record
(whether by virtue of its inclusion in such Registration Statement or
otherwise), or (B) such person shall be required so to disclose such
information pursuant to the subpoena or order of any court or other
governmental agency or body having jurisdiction over the matter (subject
to the requirements of such order, and only after such person shall have
given the Company prompt prior written notice of such requirement), or (C)
such information is required to be set forth in such Registration
Statement or the Prospectus included therein or in an amendment to such
Registration Statement or an amendment or supplement to such Prospectus in
order that such Registration Statement, Prospectus, amendment or
supplement, as the case may be, does not contain an untrue statement of a
material fact or omit to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
(vii) if requested by any selling Holders of Transfer Restricted
Securities or Holders of Broker-Dealer Transfer Restricted Securities, as
applicable, or the underwriter(s), if any, promptly incorporate in any
Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such selling
Holders and underwriter(s), if any, may reasonably request to have
included therein, including, without limitation, information relating to
the "Plan of Distribution" of the Transfer Restricted Securities or
Broker-Dealer Transfer Restricted Securities, as applicable, information
with respect to the principal amount of Transfer Restricted Securities or
Broker-Dealer Transfer Restricted Securities, as applicable, being sold to
such underwriter(s), the purchase price being paid therefor and any other
terms of the offering of the Transfer Restricted Securities or
Broker-Dealer Transfer-Restricted Securities, as applicable, to be sold in
such offering; and make all required filings of such Prospectus supplement
or post-effective amendment as soon as practicable after the Company is
notified of the matters to be incorporated in such Prospectus supplement
or post-effective amendment;
(viii) furnish to each selling Holder of Transfer Restricted
Securities or Holders of Broker-Dealer Transfer Restricted Securities, as
applicable, and each of the underwriter(s), if any, without charge, at
least one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(ix) deliver to each selling Holder of Transfer Restricted
Securities and each of the underwriter(s), if any, and each Holder of
Broker-Dealer Transfer Restricted Securities, without charge, as many
copies of the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may request;
the Company hereby consents to the use of the Prospectus and any amendment
or supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, and each Holder of Broker-Dealer Transfer
Restricted Securities, in connection with the offering and the sale of the
Transfer Restricted Securities and Broker-Dealer Transfer Restricted
Securities, as applicable, covered by the Prospectus or any amendment or
supplement thereto;
12
(x) enter into such agreements (including an underwriting
agreement), and make such representations and warranties, and take all
such other actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities and
Broker-Dealer Transfer Restricted Securities, as applicable, pursuant to
any Registration Statement contemplated by this Agreement, all to such
extent as may be requested by the Initial Purchaser or, in the case of
registration for resale of Transfer Restricted Securities pursuant to the
Shelf Registration Statement, by any Holder or Holders of Transfer
Restricted Securities who hold at least 25% in aggregate principal amount
of such class of Transfer Restricted Securities or, in the case of
Broker-Dealer Transfer Restricted Securities, by any Holder of
Broker-Dealer Transfer Restricted Securities; provided, that, the Company
shall not be required to enter into any such agreement more than once with
respect to all of the Transfer Restricted Securities and, in the case of a
Shelf Registration Statement, may delay entering into such agreement if
the Board of Directors of the Company determines in good faith that it is
in the best interests of the Company not to disclose the existence of or
facts surrounding any proposed or pending material corporate transaction
involving the Company; and whether or not an underwriting agreement is
entered into and whether or not the registration is an Underwritten
Registration, the Company shall:
(A) furnish to the Initial Purchaser, the Holders of Transfer
Restricted Securities who hold at least 25% in aggregate principal
amount of such class of Transfer Restricted Securities (in the case
of a Shelf Registration Statement), each Holder of Broker-Dealer
Transfer Restricted Securities and each underwriter, if any, in such
substance and scope as they may request and as are customarily made
in connection with an offering of debt securities pursuant to a
Registration Statement (i) upon the effective date of any
Registration Statement (and if such Registration Statement
contemplates an Underwritten Offering of Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, upon the date of the closing under the underwriting
agreement related thereto) and (ii) upon the filing of any amendment
or supplement to any Registration Statement or any other document
that is incorporated in any Registration Statement by reference and
includes financial data with respect to a fiscal quarter or year:
(1) a certificate, dated the date of effectiveness of
the Shelf Registration Statement signed by (y) the Chairman of
the Board, the President or any Vice President and (z) the
Chief Financial Officer of the Company confirming, as of the
date thereof, the matters set forth in paragraph (j) of
Section 7 of the Purchase Agreement and such other matters as
such parties may reasonably request;
(2) an opinion, dated the date of effectiveness of the
Shelf Registration Statement, as the case may be, of counsel
for the Company covering the matters set forth in paragraphs
(c) (d) and (e) of Section 7 of the Purchase Agreement and
such other matter as such parties may reasonably request, and
in any event including a statement to the effect that such
counsel has participated in conferences with officers and
other representatives of the Company, representatives of the
independent public accountants for the Company, the Initial
Purchasers' representatives and the Initial Purchasers'
counsel in connection with
13
the preparation of such Registration Statement and the related
Prospectus and have considered the matters required to be
stated therein and the statements contained therein, although
such counsel has not independently verified the accuracy,
completeness or fairness of such statements; and that such
counsel advises that, on the basis of the foregoing (relying
as to materiality to a large extent upon facts provided to
such counsel by officers and other representatives of the
Company and without independent check or verification), no
facts came to such counsel's attention that caused such
counsel to believe that the applicable Registration Statement,
at the time such Registration Statement or any post-effective
amendment thereto became effective, and, in the case of the
Exchange Offer Registration Statement, as of the date of
Consummation, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or that the Prospectus contained in such
Registration Statement as of its date and, in the case of the
opinion dated the date of Consummation of the Exchange Offer,
as of the date of Consummation, contained an untrue statement
of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Such counsel may state further that such counsel assumes no
responsibility for, and has not independently verified, the
accuracy, completeness or fairness of the financial
statements, notes and schedules and other financial data
included in any Registration Statement contemplated by this
Agreement or the related Prospectus; and
(3) a customary comfort letter, dated as of the date of
Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as the case
may be, from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters by underwriters in connection with
primary underwritten offerings, and affirming the matters set
forth in the comfort letters delivered pursuant to Section 7
of the Purchase Agreement, without exception;
(B) set forth in full or incorporated by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the
Company pursuant to this clause (x), if any.
(xi) prior to any public offering of Transfer Restricted Securities,
or Broker-Dealer Transfer Restricted Securities, as applicable, cooperate
with the selling Holders of Transfer Restricted Securities, the Holders of
Broker-Dealer Transfer Restricted Securities, the underwriter(s), if any,
and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities or Broker-Dealer
Transfer Restricted Securities, as applicable, under the securities or
Blue Sky laws of such jurisdictions as the
14
selling Holders of Transfer Restricted Securities or Holders of
Broker-Dealer Transfer Restricted Securities or underwriter(s) may
reasonably request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, covered by the Shelf Registration Statement filed pursuant to
Section 4 hereof; provided, however, that the Company shall not be
required to register or qualify as a foreign corporation where it is not
now so qualified or to take any action that would subject it to the
service of process in suits or to taxation, other than as to matters and
transactions relating to the Registration Statement, in any jurisdiction
where it is not now so subject;
(xii) shall issue, upon the request of any Holder of Series A Notes
covered by the Shelf Registration Statement, Series B Notes, having an
aggregate principal amount equal to the aggregate principal amount of
Series A Notes surrendered to the Company by such Holder in exchange
therefor or being sold by such Holder; such Series B Notes to be
registered in the name of such Holder or in the name of the purchaser(s)
of such Notes, as the case may be; in return, the Series A Notes held by
such Holder shall be surrendered to the Company for cancellation;
(xiii) cooperate with the selling Holders of Transfer Restricted
Securities and the underwriter(s), if any, to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and enable
such Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders or the underwriter(s), if any, may
request at least two business days prior to any sale of Transfer
Restricted Securities made by such underwriter(s);
(xiv) use its best efforts to cause the Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as applicable,
covered by the Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof or the underwriter(s), if any, to
consummate the disposition of such Transfer Restricted Securities, subject
to the proviso contained in clause (xi) above;
(xv) if any fact or event contemplated by clause (d)(iii)(D) above
shall exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, or Broker-Dealer Transfer Restricted Securities, as
applicable, the Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(xvi) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and
provide the Trustee under the Indenture with printed certificates for the
Transfer Restricted Securities which are in a form eligible for deposit
with the Depository Trust Company;
15
(xvii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of
the NASD;
(xviii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to
its security holders, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
for the twelve-month period (A) commencing at the end of any fiscal
quarter in which Transfer Restricted Securities are sold to underwriters
in a firm or best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
Registration Statement;
(xix) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the Trustee
and the Holders of Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the
terms of the TIA; and execute, and use all commercially reasonable efforts
to cause the Trustee to execute, all documents that may be required to
effect such changes and all other forms and documents required to be filed
with the Commission to enable such Indenture to be so qualified in a
timely manner;
(xx) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 and
Section 15 of the Exchange Act; and
(xxi) cause each Guarantor upon the creation or acquisition by the
Company of such Guarantor, to execute a counterpart to this Agreement in
the form attached hereto as Annex A and to deliver such counterpart,
together with an opinion of counsel as to the enforceability thereof
against such entity, to the Initial Purchasers no later than five business
days following the execution thereof.
Each Holder agrees by acquisition of a Transfer Restricted Security or
Broker-Dealer Transfer Restricted Securities, as applicable, that, upon receipt
of any notice from the Company of the existence of any fact of the kind
described in Section 6(d)(iii)(D) hereof, such Holder will forthwith discontinue
disposition of Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Security pursuant to the applicable Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 6(d)(xvi) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings that are incorporated
by reference in the Prospectus. If so directed by the Company, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Security, as applicable, that was current at the time of receipt of
such notice. In the event the Company shall give any such notice, the time
period regarding the effectiveness of such Registration Statement set forth
16
in Section 3 or 4 hereof, as applicable, shall be extended by the number of days
during the period from and including the date of the giving of such notice
pursuant to Section 6(d)(iii)(D) hereof to and including the date when each
selling Holder covered by such Registration Statement shall have received the
copies of the supplemented or amended Prospectus contemplated by Section
6(d)(xv) hereof or shall have received the Advice.
The Company may require each Holder of Transfer Restricted Securities or
Broker-Dealer Transfer Restricted Securities as to which any registration is
being effected to furnish to the Company such information regarding such Holder
and such Holder's intended method of distribution of the applicable Transfer
Restricted Securities or Broker-Dealer Transfer Restricted Securities as the
Company may from time to time reasonably request in writing, but only to the
extent that such information is required in order to comply with the Act. Each
such Holder agrees to notify the Company as promptly as practicable of (i) any
inaccuracy or change in information previously furnished by such Holder to the
Company or (ii) the occurrence of any event, in either case, as a result of
which any Prospectus relating to such registration contains or would contain an
untrue statement of a material fact regarding such Holder or such Holder's
intended method of distribution of the applicable Transfer Restricted Securities
or Broker-Dealer Transfer Restricted Securities or omits to state any material
fact regarding such Holder or such Holder's intended method of distribution of
the applicable Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities required to be stated therein or necessary to make the
statements therein not misleading and promptly to furnish to the Company any
additional information required to correct and update any previously furnish to
the Company any additional information required to correct and update any
previously furnished information or required so that such Prospectus shall not
contain, with respect to such Holder or the distribution of the applicable
Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading.
SECTION 7. REGISTRATION EXPENSES
All expenses incident to the Company's performance of or compliance with
this Agreement will be borne by the Company regardless of whether a Registration
Statement becomes effective, including without limitation: (i) all registration
and filing fees and expenses (including filings made by any Initial Purchaser or
Holder with the NASD (and, if applicable, the fees and expenses of any
"qualified independent underwriter" and its counsel that may be required by the
rules and regulations of the NASD)); (ii) all fees and expenses of compliance
with federal securities and state Blue Sky or securities laws; (iii) all
expenses of printing (including printing certificates for the Series B Notes to
be issued in the Exchange Offer and printing of Prospectuses), messenger and
delivery services; (iv) all fees and disbursements of counsel for the Company
and the Holders of Transfer Restricted Securities; and (v) all fees and
disbursements of independent certified public accountants of the Company
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or
17
accounting duties), the expenses of any annual audit and the fees and expenses
of any Person, including special experts, retained by the Company.
SECTION 8. INDEMNIFICATION
(a) The Company shall indemnify and hold harmless each Holder of Transfer
Restricted Securities or Broker Dealer Transfer Restricted Securities, its
officers and employees and each person, if any, who controls any such Holders,
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, sales and registration of Notes), to which that Holder,
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Registration Statement or
Prospectus or in any amendment or supplement thereto or (B) in any blue sky
application or other document prepared or executed by the Company (or based upon
any written information furnished by the Company) specifically for the purpose
of qualifying any or all of the Notes under the securities laws of any state or
other jurisdiction (any such application, document or information being
hereinafter called a "Blue Sky Application"), (ii) the omission or alleged
omission to state in any Registration Statement or Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (iii) any act or failure to act or any alleged act or failure
to act by any Holder 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 shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Holder through its
gross negligence or willful misconduct), and shall reimburse each Holder and
each such officer, employee or controlling person promptly upon demand for any
legal or other expenses reasonably incurred by that Holder, 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 shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Registration Statement or
Prospectus, or in any such amendment or supplement, or in any Blue Sky
Application, in reliance upon and in conformity with written information
concerning such Holder furnished to the Company by or on behalf of any Holder
specifically for inclusion therein. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to any Holder or
to any officer, employee or controlling person of that Holder.
(b) Each Holder, severally and not jointly, shall indemnify and hold
harmless the Company, its officers and employees, each of its directors, and
each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss,
18
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 may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained (A) in
any Registration Statement or Prospectus, or in any amendment or supplement
thereto, or (B) in any Blue Sky Application or (ii) the omission or alleged
omission to state in any Registration Statement or Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such Holders finished
to the Company by or on behalf of that Holder specifically for inclusion
therein, and shall reimburse the Company and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Holder may
otherwise have to the Company or any such director, officer, employee or
controlling person.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 8. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of such 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 judgement of such counsel it is advisable for such indemnified party
to employ separate counsel or (iii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related
19
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, if the indemnified parties under this Section 8
consist of any Initial Purchaser or any of their respective officers, employees
or controlling persons, or by the Company, if the indemnified parties under this
Section consist of the Company or any of the Company's directors, officers,
employees or controlling persons. Each indemnified party, as a condition of the
indemnity agreements contained in Section 8, shall use all commercially
reasonable efforts to cooperate with the indemnifying party in the defense of
any such action or claim. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) 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,
on the one hand, and the Holders on the other, from the offering of the Notes 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 on the one hand and the Holders 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 on the one hand
and the Holders on the other with respect to such offering shall be deemed to be
in the same proportion as the total net proceeds from the offering of the Series
A Notes purchased under the Purchase Agreement (before deducting expenses)
received by the Company, on the one hand, and the total discounts and
commissions received by the Holders with respect to the Series A Notes purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the Series A Notes under the Purchase 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 or the Holders, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Holders agree that it would not be just and
20
equitable if contributions pursuant to this Section 8(d) were to be determined
by pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be deemed to
include, for purposes of this Section 8(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8(d), no Holder shall be required to contribute any amount in excess of
the amount by which the net proceeds received by it in connection with its sale
of Notes exceeds the amount of any damages which such Holder 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 Holders' obligations to contribute as provided in this
Section 8(d) are several and not joint.
SECTION 9. RULE 144A
The Company hereby agrees with each Holder of Transfer Restricted
Securities, during any period in which the Company is not subject to Section 13
or 15(d) of the Exchange Act within the two-year period following the Closing
Date, and each Holder of Broker-Dealer Transfer Restricted Securities, for so
long as any Broker-Dealer Transfer Restricted Securities remain outstanding, to
make available to any Holder or beneficial owner of Transfer Restricted
Securities or any Holder or Broker-Dealer Transfer Restricted Securities, in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as applicable, on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of such
underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering at such Holders' expense. In any such
Underwritten Offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be
21
selected by the Holders of a majority in aggregate principal amount of the
Transfer Restricted Securities included in such offering; provided, that such
investment bankers and managers must be reasonably satisfactory to the Company.
SECTION 12. MISCELLANEOUS
(a) Remedies. The Company agrees that monetary damages (including the
liquidated damages contemplated hereby) would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agree to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, on or after the date
of this Agreement, enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Except as disclosed in the Final
Offering Memorandum, the Company has not previously entered into any agreement
granting any registration rights with respect to its securities to any Person.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company will not take any action,
or permit any change to occur, with respect to the Notes that would materially
and adversely affect the ability of the Holders to Consummate any Exchange
Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
22
(ii) if to the Company:
L-3 Communications Corporation
000 Xxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000,
Attention: Chief Financial Officer (Fax: 000-000-0000),
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX, 00000
Attention: Xxxxxx X. Xxxxxx (Fax: 000-000-0000)
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders or Restricted Broker Dealers; provided, however, that this Agreement
shall not inure to the benefit of or be binding upon a successor or assign of a
Holder unless and to the extent such successor or assign acquired Transfer
Restricted Securities or Broker Dealer Transfer Restricted Securities from such
Holder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
23
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement together with the other Operative
Documents (as defined in the Purchase Agreement) is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
[Signature pages follow]
24
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
L-3 COMMUNICATIONS CORPORATION
By:
-----------------------------------
Name:
Title:
XXXXXX BROTHERS INC.
BANCAMERICA SECURITIES, INC.
BY XXXXXX BROTHERS INC.
By:
------------------------------
Authorized Representative
S-1
Annex A
Counterpart To Registration Rights Agreement
The undersigned hereby absolutely, unconditionally and irrevocably agrees
(as a "Guarantor") to make all commercially reasonable efforts to include its
Subsidiary Guarantee in any Registration Statement required to be filed by the
Company pursuant to the Registration Rights Agreement, dated as of April 30,
1997, (the "Registration Rights Agreement") by and among L-3 Communications
Corporation, a Delaware corporation, Xxxxxx Brothers Inc. and BancAmerica
Securities, Inc.; to make all commercially reasonable efforts to cause such
Registration Statement to become effective as specified in the Registration
Rights Agreement; and to otherwise be bound by the terms and provisions of the
Registration Rights Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Counterpart as of
______, 1997.
[NAME]
By:
---------------------------------
Name:
Title:
A-1
EXHIBIT D to
Stockholders
Agreement
FORM OF AGREEMENT TO BE BOUND
[DATE]
To the Parties to the
Stockholders Agreement
dated as of April 30, 1997
Dear Sirs:
Reference is made to the Stockholders Agreement dated as of April 30, 1997
(the "Stockholders Agreement"), among L-3 Communications Holdings, Inc.,
Lockheed Xxxxxx Corporation, Xxxxxx Brothers Capital Partners III, L.P., Xxxxxx
Brothers Holdings Inc., Xxxxx X. Xxxxx and Xxxxxx X. XxXxxxx and each other
Stockholder who or which shall become parties to the Stockholders Agreement as
provided therein. Capitalized terms used herein and not defined have the
meanings ascribed to them in the Stockholders Agreement.
In consideration of the representations, covenants and agreements
contained in the Stockholders Agreement, the undersigned hereby confirms and
agrees that it shall be bound by all of the provisions thereof.
This letter shall be construed and enforced in accordance with the
laws of the State of New York.
Very truly yours,
[Permitted Transferee]
23
EXHIBIT E to
Stockholders
Agreement
1997 Option Plan for Key
Employees -- Please see
Exhibit 10.91 to the
Registration statement.
