EXECUTION COPY
$350,000,000
L-3 COMMUNICATIONS HOLDINGS, INC.
4% SENIOR SUBORDINATED CONVERTIBLE CONTINGENT DEBT SECURITIES (CODES) DUE 2011
PURCHASE AGREEMENT
October 18, 2001
XXXXXX BROTHERS INC.
BEAR, XXXXXXX & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
c/x Xxxxxx Brothers Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
L-3 Communications Holdings, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell $350,000,000 in aggregate principal amount of its 4% Senior
Subordinated Convertible Contingent Debt Securities CODES due 2011 (the "Firm
CODES") to Xxxxxx Brothers Inc., Bear, Xxxxxxx & Co. Inc. and Credit Suisse
First Boston Corporation (collectively, the "Initial Purchasers"). In addition,
the Company proposes to grant to the Initial Purchasers an option (the "Option")
to purchase up to an additional $70,000,000 in aggregate principal amount of 4%
Senior Subordinated Convertible Contingent Debt Securities CODES due 2011 (the
"Optional CODES" and, together with the Firm CODES, the "CODES").
The CODES will be convertible into fully paid, nonassessable
shares of common stock of the Company, par value $0.01 per share (the "Common
Stock"), on the terms, and subject to the conditions, set forth in the
Indenture. As used herein, "Conversion Shares" means the shares of Common Stock
into which the CODES are convertible. The CODES will be issued pursuant to an
indenture (the "Indenture") to be dated as of the First Delivery Date (as
defined in Section 2(a)), between the Company and The Bank of New York, as
Trustee (the "Trustee"). The Company's obligations under the CODES, including
the due and punctual payment of interest on the CODES, will be unconditionally
guaranteed (the "Guarantees") by certain of the present domestic subsidiaries of
the Company, including, as of this date, L-3 Communications Corporation,
Hygienetics Environmental Services, Inc., a Delaware corporation, L-3
Communications ILEX Systems, Inc, a Delaware corporation, L-3
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Communications Aydin Corporation, a Delaware corporation, MPRI, Inc., a Delaware
corporation, L-3 Communications SPD Technologies, Inc., a Delaware corporation,
SPD Holdings, Inc., a Delaware corporation, SPD Electrical Systems, Inc., a
Delaware corporation, SPD Switchgear, Inc., a Delaware corporation, Pac Ord,
Inc., a Delaware corporation, Xxxxxxxx, Inc., a Delaware corporation, Power
Paragon, Inc., a Delaware corporation, L-3 Communications ESSCO, Inc., a
Delaware corporation (individually a "Delaware Guarantor" and collectively, the
"Delaware Guarantors"), and Electrodynamics, Inc., an Arizona Corporation,
Interstate Electronics Corporation, a California Corporation, Southern
California Microwave Inc, a California corporation, L-3 Communications Storm
Control Systems, Inc., a California corporation, L-3 Communications DBS
Microwave, Inc., a California corporation and Microdyne Corporation, a Maryland
corporation (individually a "Non-Delaware Guarantor," collectively the
"Non-Delaware Guarantors" and, together with the Delaware Guarantors, the
"Guarantors"). As used herein, the term "CODES" shall include the Guarantees
thereof by the Guarantors, unless the context otherwise requires.
The CODES will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. Holders of the CODES
(including the Initial Purchasers and their direct and indirect transferees)
will be entitled to the benefits of a Resale Registration Rights Agreement,
dated the First Delivery Date, between the Company, the Guarantors and the
Initial Purchasers (the "Registration Rights Agreement"), pursuant to which the
Company and the Guarantors will agree to file with the Securities and Exchange
Commission (the "Commission") a registration statement pursuant to Rule 415
under the Securities Act (the "Registration Statement") covering the resale of
the CODES and the Conversion Shares, and to use its best efforts to cause the
Registration Statement to be declared effective.
This Agreement, the Indenture, the CODES and the Registration
Rights Agreement are referred to herein collectively as the "Operative
Documents."
This is to confirm the agreement between the Company and the
Initial Purchasers concerning the issue, offer and sale of the CODES.
1. Representations, Warranties and Agreements of the Company
and the Guarantors. The Company and the Guarantors represent, warrant to and
agree with, the Initial Purchasers that:
(a) The Company and the Guarantors have prepared an offering
memorandum dated October 18, 2001 (the "Offering Memorandum") setting forth or
incorporating by reference information concerning the Company, the CODES, the
Guarantees, the Registration Rights Agreement and the Common Stock. Copies of
the Offering Memorandum will be delivered by the Company to the Initial
Purchasers pursuant to the terms of this Agreement. As used in this Agreement,
"Offering Memorandum" means the Offering Memorandum as amended or supplemented.
The Offering Memorandum did not as of its date, and will not as of a Delivery
Date (as defined in Section 2(b)), contain any untrue statement of a
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material fact or omit 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 no representation or warranty is made as to
information contained in or omitted from the Offering Memorandum in reliance
upon and in conformity with written information furnished to the Company by or
on the behalf of any Initial Purchaser through Xxxxxx Brothers Inc. specifically
for inclusion therein;
(b) Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 6 and their compliance
with the agreements set forth therein, it is not necessary, in connection with
the issuance and sale of the CODES to the Initial Purchasers and the offer,
resale and delivery of the CODES by the Initial Purchasers in the manner
contemplated by this Agreement, the Indenture, the Registration Rights Agreement
and the Offering Memorandum, to register the CODES or the Conversion Shares
under the Securities Act or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act");
(c) The market-related and customer-related data and estimates
included in the Offering Memorandum are based on or derived from sources which
the Company believes to be reliable and accurate;
(d) The Company and each of its subsidiaries (as defined in
Section 14) have been duly organized and are validly existing as corporations or
limited liability companies, as applicable, in good standing under the laws of
their respective jurisdictions of organization, are duly qualified to do
business and are in good standing as foreign corporations in each jurisdiction
in which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification except for such qualification
and good standing the failure of which, individually or in the aggregate, would
not result in a material adverse effect on the condition (financial or other),
business, prospects, properties, stockholders' equity or results of operations
of the Company and its subsidiaries taken as a whole (a "Material Adverse
Effect"), and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged;
(e) The Company has an authorized capitalization as set forth
in the Offering Memorandum, and all of the issued and outstanding shares of
capital stock of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable and conform to the description thereof
contained in the Offering Memorandum; and 100% of the issued shares of capital
stock of each Guarantor of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims, other than (A) liens,
encumbrances, equities or claims described in the Offering Memorandum, (B) a
pledge of such shares to secure the Senior Credit Facilities (as described in
the Offering Memorandum) and (C) such other liens, encumbrances, equities or
claims as are not, individually or in the aggregate, material to the Company and
its subsidiaries, taken as a whole;
(f) The Conversion Shares which are authorized on the date
hereof have been duly and validly authorized and reserved for issuance upon
conversion of the CODES and are
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free of preemptive rights; and all Conversion Shares, when so issued and
delivered upon such conversion in accordance with the terms of the Indenture,
will be duly and validly authorized and issued, fully paid and non-assessable
and free and clear of all liens, encumbrances, equities or claims;
(g) This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors;
(h) The execution, delivery and performance of this Agreement,
the Registration Rights Agreement and the Indenture by the Company and the
Guarantors and the consummation of the transactions contemplated hereby and
thereby, and the issuance and delivery of the CODES and the Conversion Shares
will not conflict with, constitute or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the properties or assets
of the Company or any of its subsidiaries is subject that is material to the
financial condition or prospects of the Company and its subsidiaries, taken as a
whole (collectively, the "Material Agreements"), except for breach of which,
individually, or in the aggregate, would not result in a Material Adverse
Effect, nor will such actions result in any violation of the provisions of the
charter, by-laws or other organizational documents of the Company or any of its
subsidiaries or any material law, statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties or assets, provided that the
provisions for indemnification and contribution hereunder and thereunder may be
limited by equitable principles and public policy consideration; and except (i)
with respect to the transactions contemplated by the Registration Rights
Agreement as may be required under the Securities Act, the Trust Indenture Act
and the rules and regulations promulgated thereunder, (ii) as required by state
securities or "blue sky" laws, no consent, approval, authorization or order of,
or filing or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of the Operative Documents
by the Company, and the consummation of the transactions contemplated hereby and
thereby. No qualification of the Indenture under the Trust Indenture Act of
1939, as amended (the "1939 Act"), is required in connection with the sale of
the CODES by the Initial Purchasers;
(i) The Company and the Guarantors have all necessary
corporate right, power and authority to execute and deliver this Agreement and
perform their obligations hereunder; and this Agreement and the transactions
contemplated hereby have been duly authorized, executed and delivered by the
Company and the Guarantors;
(j) The Company has all necessary corporate right, power and
authority to execute and deliver the Indenture and perform its obligations
thereunder; the Indenture has been duly authorized by the Company, and upon the
effectiveness of the Registration Statement, will be qualified under the Trust
Indenture Act; on the First Delivery Date (as defined below in Section 2(a)),
the Indenture will have been duly executed and delivered by the Company and,
assuming due authorization, execution and delivery of the Indenture by the
Trustee, will constitute a legally valid and binding agreement of the Company
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws relating to or affecting
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creditors' rights generally, subject to general principles of equity and to
limitations on availability of equitable relief, including specific performance
(whether considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing; and the Indenture will conform in all material
respects to the description thereof contained in the Offering Memorandum;
(k) The Company has all necessary corporate right, power and
authority to execute and deliver the Registration Rights Agreement and perform
its obligations thereunder; the Registration Rights Agreement and the
transactions contemplated thereby have been duly authorized by the Company; when
the Registration Rights Agreement is duly executed and delivered by the Company
(assuming due authorization, execution and delivery by the Initial Purchasers),
it will be a legally valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, subject to general principles of equity and to
limitations on availability of equitable relief, including specific performance
(whether considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing, and except with respect to the rights of
indemnification and contribution thereunder, where enforcement thereof may be
limited by federal or state securities laws or the policies underlying such
laws; and the Registration Rights Agreement will conform in all material
respects to the description thereof contained in the Offering Memorandum;
(l) The Company has all necessary corporate right, power and
authority to execute, issue and deliver the CODES and perform its obligations
thereunder; the CODES have been duly and validly authorized by the Company and
when duly executed by the Company in accordance with the terms of the Indenture
and, assuming due authentication of the CODES by the Trustee, upon delivery to
the Initial Purchasers against payment therefor in accordance with the terms
hereof, will constitute valid and binding obligations of the Company entitled to
the benefits of the Indenture and enforceable in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) or an implied covenant of good faith and fair
dealing; and the CODES, when issued and delivered, will conform in all material
respects to the description thereof contained in the Offering Memorandum;
(m) The Guarantees have been duly and validly authorized by
the Guarantors and when duly endorsed on the CODES in accordance with the terms
of the Indenture and, assuming due authentication of the CODES by the Trustee,
upon delivery to the Initial Purchasers against payment therefor in accordance
with the terms hereof, will constitute valid and binding obligations of each of
the Guarantors entitled to the benefits of the Indenture and enforceable in
accordance with their terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principals (whether considered in a proceeding in equity or at law) or an
implied covenant of good faith and fair dealing;
(n) Except (1) as described in the Offering Memorandum (or in
the documents incorporated therein by reference) and (2) as provided in the
Registration Rights Agreement dated the
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First Delivery Date, there are no contracts, agreements or understandings
between the Company and any person granting such person the right (other than
rights which have been waived or satisfied or rights not exercisable in
connection with the Offering Memorandum) to require the Company to file a
registration statement under the Securities Act with respect to any securities
of the Company owned or to be owned by such person or to require the Company to
include such securities in any securities being registered pursuant to any
registration statement filed by the Company under the Securities Act;
(o) Except as described in the Offering Memorandum, the
Company and the Guarantors have not sold or issued any Securities with terms
that are substantially similar to the CODES and the Guarantees during the
six-month period preceding the date of the Offering Memorandum, including any
sales pursuant to Rule 144A under, or Regulations D of, the Securities Act other
than shares issued pursuant to employee benefit plans, qualified stock option
plans or other employee compensation plans or pursuant to outstanding options,
rights or warrants;
(p) Neither the Company nor any of its subsidiaries has
incurred, since the date of the latest audited financial statements included or
incorporated by reference in the Offering Memorandum, any liability or
obligation, direct or contingent, or entered into any transaction, in each case
not in the ordinary course of business, that is material to the Company and its
subsidiaries taken as a whole, otherwise than as set forth, incorporated by
reference or contemplated in the Offering Memorandum; and, since such date,
there has not been any material change in the capital stock or material increase
in the short-term or long-term debt of the Company or any of its subsidiaries or
any material adverse change, or any development involving or which would
reasonably be expected to involve a Material Adverse Effect, otherwise than as
described, incorporated by reference or contemplated in the Offering Memorandum;
(q) The historical and pro forma financial statements,
together with the related CODES, set forth or incorporated by reference in the
Offering Memorandum comply as to form in all material respects with the
requirements of Regulation S-X under the Securities Act, except as disclosed in
the Offering Memorandum. The historical financial statements of the Company
fairly present the financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods indicated, and
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved; Such pro forma
financial statements have been prepared on a basis consistent with such
historical statements of the Company, except for the pro forma adjustments
specified therein, and give effect to assumptions made on a reasonable basis and
in good faith and present fairly the historical and proposed transactions
contemplated by the Offering Memorandum and this Agreement. The other financial
and statistical information and data included in the Offering Memorandum,
historical and pro forma, have been derived from the financial records of the
Company (or its predecessors) and, in all material respects, have been prepared
on a basis consistent with such books and records of the Company (or its
predecessor), except as disclosed therein.
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(r) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company, whose report appears in the Offering
Memorandum or is incorporated by reference therein and who have delivered the
initial letter referred to in Section 5(n) hereof, are independent public
accountants as required by the Securities Act and the Rules and Regulations
promulgated thereunder during the periods covered by the financial statements on
which they reported contained or incorporated in the Offering Memorandum;
(s) The Company and each of its subsidiaries have good and
marketable title to all property (real and personal) described in the Offering
Memorandum as being owned by them, free and clear of all liens, claims, security
interests or other encumbrances except such as are described in the Offering
Memorandum or, to the extent that any such liens, claims, security interests or
other encumbrances would not have a Material Adverse Effect (individually or in
the aggregate) and all the material property described in the Offering
Memorandum as being held under lease by the Company and its subsidiaries is held
by them under valid, subsisting and enforceable leases, with only such
exceptions as would not have a Material Adverse Effect (individually or in the
aggregate);
(t) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, trademarks, service marks, trade
names, copyrights, licenses, inventions, trade secrets and other rights, and all
registrations or applications relating thereto, described in the Offering
Memorandum as being owned by them or necessary for the conduct of their
business, except as such would not have a Material Adverse Effect (individually
or in the aggregate), and the Company is not aware of any pending or threatened
claim to the contrary or any pending or threatened challenge by any other person
to the rights of the Company and its subsidiaries with respect to the foregoing
which, if determined adversely to the Company and its subsidiaries, would have a
Material Adverse Effect (individually or in the aggregate);
(u) Except as described in the Offering Memorandum, there are
no legal or governmental proceedings pending or, to the knowledge of the
Company, threatened, against the Company or any of its subsidiaries or to which
the Company or any of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, are reasonably
likely to cause a Material Adverse Effect;
(v) No material relationship, direct or indirect, exists
between or among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand, except as
described or incorporated by reference in the Offering Memorandum;
(w) The Company is not involved in any strike, job action or
labor dispute with any group of employees that would have a Material Adverse
Effect, and, to the Company's knowledge, no such action or dispute is
threatened;
(x) Except as disclosed or incorporated by reference in the
Offering Memorandum, the Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable
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event" (as defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) subject to Title IV of ERISA for which the Company would have
any material liability; the Company has not incurred and does not expect to
incur any material liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any such "pension plan" or (ii) Sections 412
or 4971 of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code") (other than
contributions in the normal course which are not in default); and each such
"pension plan" for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would reasonably be expected to cause the loss of such qualification;
(y) The Company and its subsidiaries have filed all federal,
state and local income and franchise tax returns required to be filed through
the date hereof and have paid all taxes due thereon, and no tax deficiency has
been determined adversely to the Company or any of its subsidiaries nor does the
Company have any knowledge of any tax deficiency which, if determined adversely
to the Company and its subsidiaries, might have a Material Adverse Effect;
(z) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws or other organizational documents, (ii) is
in default in any material respect, and no event has occurred which, with notice
or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
Material Agreement or (iii) is in violation in any material respect of any law,
ordinance, governmental rule, regulation or court decree to which it or its
property or assets may be subject or has failed to obtain any material license,
permit, certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its business,
except as would not, individually or in the aggregate, have a Material Adverse
Effect;
(aa) To the best of the Company's knowledge, neither the
Company nor any of its subsidiaries, nor any director, officer, agent, employee
or other person associated with or acting on behalf of the Company or any of its
subsidiaries, has used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds or violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; except as such that
would not have a Material Adverse Effect;
(bb) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic wastes,
medical wastes, hazardous wastes or hazardous substances by the Company or any
of its subsidiaries (or, to the knowledge of the Company, any of their
predecessors in interest)
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at, upon or from any of the property now or previously owned or leased by the
Company or its subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require remedial
action under any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action which would not
have, or would not be reasonably likely to have, singularly or in the aggregate
with all such violations and remedial actions, a Material Adverse Effect; there
has been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, medical wastes, solid wastes,
hazardous wastes or hazardous substances due to or caused by the Company or any
of its subsidiaries or with respect to which the Company has knowledge, except
for any such spill, discharge, leak, emission, injection, escape, dumping or
release which would not have or would not be reasonably likely to have,
singularly or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a Material Adverse
Effect; and the terms "hazardous wastes," "toxic wastes," "hazardous substances"
and "medical wastes" shall have the meanings specified in any applicable local,
state, federal and foreign laws or regulations with respect to environmental
protection;
(cc) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the United States Investment
Company Act of 1940 and the rules and regulations of the Commission thereunder;
(dd) When the CODES are issued and delivered pursuant to this
Agreement, such CODES will not be of the same class (within the meaning of Rule
144A under the Securities Act) as securities of the Company that are listed on a
national securities exchange registered under Section 6 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or that are quoted in a
U.S. automated inter-dealer quotation system;
(ee) Neither the Company nor any of its affiliates (as defined
in Rule 501(b) of Regulation D under the Securities Act ("Regulation D")) (other
than the Initial Purchasers, about which no representations are made by the
Company), has, directly or through an agent, engaged in any form of general
solicitation or general advertising in connection with the offering of the CODES
(as those terms are used in Regulation D) under the Securities Act or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act; the Company has not entered into any contractual arrangement
with respect to the distribution of the CODES except for the Operative Documents
and the Company will not enter into any such arrangement;
(ff) Neither the Company nor any of its affiliates (other than
the Initial Purchasers, about which no representations are made by the Company),
has, directly or through any agent, sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any "security" (as defined in the
Securities Act) which is or will be integrated with the sale of the
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CODES in a manner that would require the registration under the Securities Act
of the CODES; and
(gg) The Company has not taken, directly or indirectly, any
action designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company in connection with the offering of the
CODES.
2. Purchase, Sale and Delivery of the CODES.
(a) The Company and the Guarantors hereby agree, on the basis
of the representations, warranties and agreements of the Initial Purchasers
contained herein and subject to all the terms and conditions set forth herein,
to issue and sell to the Initial Purchasers and, upon the basis of the
representations, warranties and agreements of the Company and the Guarantors
herein contained and subject to all the terms and conditions set forth herein,
each Initial Purchaser agrees, severally and not jointly, to purchase from the
Company, at a purchase price of 97.25% of the principal amount thereof, the
principal amount of CODES set forth opposite such Initial Purchaser's name in
Schedule I hereto. The Company and the Guarantors shall not be obligated to
deliver any of the securities to be delivered hereunder except upon payment for
all of the securities to be purchased as provided herein.
Delivery of and payment for the Firm CODES shall be made at
the office of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at
10:00 a.m. (New York time) on October 24, 2001, or such later date as the
Initial Purchasers shall designate, which date and time may be postponed by
agreement between the Initial Purchasers and the Company or as provided in
Section 8 (such date and time of delivery and payment for the Firm CODES being
herein called the "First Delivery Date"). Delivery of the Firm CODES shall be
made to the Initial Purchasers against payment of the purchase price by the
Initial Purchasers. Payment for the Firm CODES shall be effected either by wire
transfer of immediately available funds to an account with a bank in The City of
New York, the account number and the ABA number for such bank to be provided by
the Company to the Initial Purchasers at least two business days in advance of
the First Delivery Date, or by such other manner of payment as may be agreed by
the Company and the Initial Purchasers.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company hereby grants
the Option to the Initial Purchasers to purchase, severally and not jointly, the
Optional CODES at the same price as the Initial Purchasers shall pay for the
Firm CODES and the principal amount of the Optional CODES to be sold to each
Initial Purchaser shall be that principal amount which bears the same ratio to
the aggregate principal amount of Optional CODES being purchased as the
principal amount of Firm CODES set forth opposite the name of such Initial
Purchaser in Schedule I hereto. The Option may be exercised once in whole or in
part at any time not more than 30 13 days subsequent to the date of this
Agreement upon notice in writing or by facsimile by the Initial Purchasers to
the Company setting forth the amount (which shall be an integral multiple of
$1,000) of Optional CODES as to which the Initial Purchasers are exercising the
Option. THE PURCHASE OF THE OPTIONAL CODES MUST CLOSE ON OR BEFORE NOVEMBER 6,
2001.
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The date for the delivery of and payment for the Optional
CODES, being herein referred to as an "Optional Delivery Date," which may be the
First Delivery Date (the First Delivery Date and the Optional Delivery Date, if
any, being sometimes referred to as a "Delivery Date"), shall be determined by
the Initial Purchasers but shall not be later than five full business days after
written notice of election to purchase Optional CODES is given. Delivery of the
Optional CODES shall be made to the Initial Purchasers against payment of the
purchase price by the Initial Purchasers. Payment for the Optional CODES shall
be effected either by wire transfer of immediately available funds to an account
with a bank in the City of New York, the account number and the ABA number for
such bank to be provided by the Company to the Initial Purchasers at least two
business days in advance of the Optional Delivery Date, or by such other manner
of payment as may be agreed by the Company and the Initial Purchasers.
(c) The Company will deliver against payment of the purchase
price the CODES initially sold to qualified institutional buyers ("QIBs"), as
defined in Rule 144A under the Securities Act ("Rule 144A") in the form of one
or more permanent global certificates (the "Global CODES"), registered in the
name of Cede & Co., as nominee for The Depository Trust Company ("DTC").
Beneficial interests in the CODES initially sold to QIBs will be shown on, and
transfers thereof will be effected only through, records maintained in
book-entry form by DTC and its participants.
The Global CODES will be made available, at the request of the
Initial Purchasers, for inspection at least 24 hours prior to such Delivery
Date. The Certificated CODES will be made available, at the request of the
Initial Purchasers, for checking at least 48 hours prior to such Delivery Date.
(d) Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligations of the Initial Purchasers hereunder.
3. Further Agreements of the Company. The Company agrees with
the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly of any proposal
to amend or supplement the Offering Memorandum and not to effect any such
amendment or supplement without the consent of the Initial Purchasers. If, at
any time prior to completion of the resale of the CODES by the Initial
Purchasers, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Offering Memorandum in order that the
Offering Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances existing at the time it is delivered to a
purchaser, not misleading, to promptly notify the Initial Purchaser and prepare,
subject to the first sentence of this Section 3(a), such amendment or supplement
as may be necessary to correct such untrue statement or omission;
(b) To furnish to the Initial Purchasers and to Xxxxxx &
Xxxxxxx, counsel to the Initial Purchasers, copies of the Offering Memorandum
and the Offering Memorandum (and all amendments and supplements thereto) in each
case as soon as available and in such quantities as the Initial Purchasers
reasonably request for internal use and for distribution to prospective
11
purchasers. The Company will pay the expenses of printing and distributing to
the Initial Purchasers all such documents;
(c) To use its reasonable efforts to take such action as the
Initial Purchasers may reasonably request from time to time, to qualify the
CODES for offering and sale under the securities laws of such jurisdictions as
the Initial Purchasers may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions in the
United States for as long as may be necessary to complete the resale of the
CODES; provided, however, that in connection therewith, the Company shall not be
required to qualify as a foreign corporation or otherwise subject itself to
taxation in any jurisdiction in which it is not otherwise so qualified or
subject;
(d) To apply the proceeds from the sale of the CODES as set
forth under "Use of Proceeds" in the Offering Memorandum;
(e) For a period of 90 days from the date of the Offering
Memorandum, not to, directly or indirectly, (1) offer for sale, sell, or
otherwise dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition by any person at any time
in the future of) any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock (other than the CODES and shares
issued pursuant to currently outstanding options, warrants, rights or
convertible securities), or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in each case without the
prior written consent of Xxxxxx Brothers Inc.; and to cause Xx. Xxxxx X. Xxxxx
and Xx. Xxxxxx X. XxXxxxx to furnish to the Initial Purchasers, prior to the
First Delivery Date, a "lock-up" letter or letters, substantially in the form
affixed hereto and in substance and form satisfactory to counsel for the Initial
Purchasers;
(f) For so long as any of the CODES are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act, to
provide to any holder of the CODES or to any prospective purchaser of the CODES
designated by any holder, upon request of such holder or prospective purchaser,
information required to be provided by Rule 144A(d)(4) of the Securities Act if,
at the time of such request, the Company is not subject to the reporting
requirements under Section 13 or 15(d) of the Exchange Act;
(g) Each of the CODES will bear, to the extent applicable, the
legend contained in "Notice to Investors" in the Offering Memorandum for the
time period and upon the other terms stated therein, except after the CODES are
resold pursuant to a registration statement effective under the Securities Act;
(h) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment company"
within the meaning of such term under the United States Investment Company Act
of 1940, and the rules and regulations of the Commission thereunder;
12
(i) To execute and deliver the Registration Rights Agreement
(in form and substance satisfactory to the Initial Purchasers);
(j) To use its best efforts to assist the Initial Purchasers
in arranging to cause the CODES to be accepted to trade in the PORTAL market
("PORTAL") of the National Association of Securities Dealers, Inc. ("NASD");
(k) To use its best efforts to cause the CODES to be accepted
for clearance and settlement through the facilities of DTC; and
(l) To use its best efforts to have the Conversion Shares
approved by the New York Stock Exchange ("NYSE") for inclusion prior to the
effectiveness of the Registration Statement.
4. Expenses. The Company agrees to pay:
(a) the costs incident to the authorization, issuance, sale
and delivery of the CODES, and any taxes payable in that connection;
(b) the costs incident to the preparation, printing and
distribution of the Offering Memorandum and any amendment or supplement
to the Offering Memorandum, as provided in this Agreement;
(c) the costs of delivering and distributing the Operative
Documents;
(d) the fees and expenses of Xxxxxxx Xxxxxxx & Xxxxxxxx and
PricewaterhouseCoopers, LLP;
(e) the costs of distributing the terms of agreement relating
to the organization of the underwriting syndicate and selling group to
the members thereof by mail, telex or other means of communication;
(f) the fees and expenses of qualifying the CODES under the
securities laws of the several jurisdictions as provided in Section
3(c) and of preparing, printing and distributing a Blue Sky Memorandum
(including reasonable related fees and expenses of counsel to the
Initial Purchasers);
(g) all other costs and expenses incident to (i) the
preparation of the Company's "net road show" presentation materials and
(ii) the road show travelling expenses of the Company;
(h) all fees and expenses incurred in connection with any
rating of the CODES;
(i) the costs of preparing the CODES;
13
(j) all expenses and fees in connection with the application
for inclusion of the CODES in the PORTAL market and the inclusion of
the Conversion Shares on the NYSE; and
(k) all other costs and expenses incident to the performance
of the obligations of the Company and the Guarantors under this
Agreement;
provided that, except as provided in this Section 4 and in Section 7, the
Initial Purchasers shall pay their own costs and expenses, including the costs
and expenses of their counsel and any transfer taxes on the CODES which they may
sell.
5. Conditions of the Initial Purchasers' Obligations. The
several obligations of the Initial Purchasers hereunder are subject to the
accuracy, when made and on each Delivery Date, of the representations and
warranties of the Company and the Guarantors contained herein, to the
performance by the Company and the Guarantors of its obligations hereunder, and
to each of the following additional terms and conditions:
(a) No Initial Purchaser shall have discovered and disclosed
to the Company prior to or on such Delivery Date that the Offering Memorandum or
any amendment or supplement thereto contains any untrue statement of a fact
which, in the opinion of Xxxxxx & Xxxxxxx, is material or omits to state any
fact which is material and necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(b) All corporate proceedings and other legal matters incident
to the authorization, form and validity of the Operative Documents and the
Offering Memorandum or any amendment or supplement thereto, and all other legal
matters relating to the Operative Documents and the transactions contemplated
thereby shall be satisfactory in all material respects to counsel to the Initial
Purchasers, and the Company shall have furnished to such counsel all documents
and information that they may reasonably request to enable them to pass upon
such matters;
(c) Xxxxxxx Xxxxxxx & Xxxxxxxx shall have furnished to the
Initial Purchasers its written opinion, as counsel to the Company, addressed to
the Initial Purchasers and dated such Delivery Date, in form and substance
reasonably satisfactory to the Initial Purchasers, to the effect that:
(i) The Company and each of the Delaware Guarantors
have been duly organized and are validly existing as
corporations in good standing under the laws of Delaware, and
have all corporate power and authority necessary to conduct
their respective businesses as described in the Offering
Memorandum;
(ii) All of the outstanding shares of Common Stock of
the Company have been duly authorized, validly issued, fully
paid and non-assessable; and all of the issued shares of
capital stock of each Delaware Guarantor of the Company have
been duly and validly authorized and issued, are fully paid
and non-assessable (except for directors' qualifying
14
shares) and, based solely on an examination of each such
subsidiary's stock ledger and minute book, all such shares are
held of record by the Company and/or a subsidiary of the
Company;
(iii) The Indenture has been duly authorized,
executed and delivered by the Company and, assuming the
Indenture is a valid and legally binding obligation of the
Trustee, constitutes a valid and legally binding obligation of
the Company enforceable against the Company in accordance with
its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in
a proceeding in equity or at law) or an implied covenant of
good faith and fair dealing;
(iv) The CODES have been duly authorized, executed
and issued by the Company and, assuming due authentication
thereof by the Trustee and upon payment and delivery in
accordance with the terms of the Purchase Agreement, will
constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with
their terms and entitled to the benefits of the Indenture
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in
equity or at law) or an implied covenant of good faith and
fair dealing; and the CODES, when issued and delivered, will
conform to the description thereof contained in the Offering
Memorandum;
(v) The Conversion Shares that are authorized on the
date hereof have been duly authorized and validly reserved for
issuance upon conversion of the CODES; and the Conversion
Shares, when so issued and delivered upon such conversion in
accordance with the terms of the Indenture, will be duly and
validly authorized and issued, fully paid and nonassessable;
(vi) The Guarantees have been duly authorized,
executed and issued by the Delaware Guarantors and, assuming
due authentication of the CODES by the Trustee, upon payment
and delivery in accordance with the terms of the Purchase
Agreement will constitute valid and legally binding
obligations of each of the Delaware Guarantors enforceable in
accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) or an
implied covenant of good faith and fair dealing;
(vii) Assuming that the Guarantees have been duly
authorized and issued by each of the Non-Delaware Guarantors
and, assuming due
15
authentication of the CODES by the Trustee, upon payment and
delivery of the CODES in accordance with the terms of the
Purchase Agreement, the Guarantees will constitute valid and
legally binding obligations of the Non-Delaware Guarantors
enforceable against the Non-Delaware Guarantors.
(viii) The statements contained in the Offering
Memorandum under the captions "Risk Factors-The CODES are
subordinated to all our existing and future senior
indebtedness, which may inhibit our ability to repay you,"
"Risk Factors-The terms of our senior indebtedness could
restrict our flexibility and limit our ability to satisfy
obligations under the CODES," "Risk Factors--Future sales of
common stock of L-3 Holdings in the public market could lower
the stock price," "Risk Factors--Delaware Law and the charter
documents of L-3 Holdings may impede or discourage a takeover,
which could cause the market price of its shares to decline,"
"Description of Other Indebtedness," and "Description of the
CODES," insofar as they describe charter documents, contracts,
statutes, rules and regulations and other legal matters,
constitute an accurate summary thereof in all material
respects;
(ix) The statements contained in the Offering
Memorandum under the caption "Certain United States Federal
Income Tax Considerations," insofar as they purport to
constitute summaries of matters of United States federal tax
law and regulations or legal conclusions with respect thereto,
constitute accurate summaries of the matters described therein
in all material respects;
(x) This Agreement has been duly authorized, executed
and delivered by the Company and the Delaware Guarantors; and
(xi) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and the
Delaware Guarantors and, assuming that the Registration Rights
Agreement is the valid and legally binding obligation of the
Initial Purchasers and Non-Delaware Guarantors, constitutes a
valid and legally binding obligation of the Company and the
Guarantors, enforceable against the Company and the Guarantors
in accordance with its terms.
(xii) The issue and sale of the CODES and Guarantees
being delivered on such Delivery Date by the Company and the
Guarantors and the compliance by the Company and the
Guarantors, as applicable, with all of the provisions of this
Agreement and the Indenture will not breach or result in a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument filed as an exhibit
to a document incorporated by reference in the Offering
Memorandum ("Exchange Act Documents") nor will such actions
violate the Certificate of Incorporation or By-Laws or other
organizational documents of the Company or the Delaware
Guarantors, or any federal or New York statute, the Delaware
16
Limited Liability Company Act or the Delaware General
Corporation Law or any rule or regulation that has been issued
pursuant to any federal or New York statute, the Delaware
Limited Liability Company Act or the Delaware General
Corporation Law or any order known to such counsel issued
pursuant to any federal or New York statute, the Delaware
Limited Liability Company Act or the Delaware General
Corporation Law by any court or governmental agency or body or
court having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets; and no
consent, approval, authorization, order, registration or
qualification of or with any federal or New York governmental
agency or body or any Delaware governmental agency or body
acting pursuant to the Delaware Limited Liability Company Act
or the Delaware General Corporation Law or, to such counsel's
knowledge, any federal or New York court or any Delaware court
acting pursuant to the Delaware Limited Liability Company Act
or the Delaware General Corporation Law is required for the
issue and sale of the CODES by the Company (and the guarantees
of such CODES by the Guarantors), except for such consents,
approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the CODES and
Guarantees by the Initial Purchasers. The opinions set forth
in this paragraph are based upon our consideration of only
those statutes, rules and regulations which, in such counsel's
experience, are normally applicable to securities underwriting
transactions.
(xiii) No registration of the CODES under the
Securities Act and no qualification of the Indenture under the
Trust Indenture Act is required for the offer and sale of the
CODES by the Company to the Initial Purchasers or the reoffer
and resale of the CODES by the Initial Purchasers to the
initial purchasers therefrom solely in the manner contemplated
by the Offering Memorandum, the Purchase Agreement and the
Indenture.
In rendering such opinion, such counsel may state
that its opinion is limited to matters governed by the federal
laws of the United States and the laws of the State of New
York, the Delaware General Corporation Law and the Delaware
Limited Liability Company Act.
Such counsel shall also have furnished to the Initial
Purchasers a written statement, addressed to the Initial
Purchasers and dated such Delivery Date stating: Such counsel
has not independently verified the accuracy, completeness or
fairness of the statements made or included in the Offering
Memorandum and take no responsibility therefor, except as and
to the extent set forth in paragraphs (viii) and (ix) above.
In the course of the preparation by the Company of the
Offering Memorandum (excluding the Exchange Act Documents),
such counsel participated in conferences with certain officers
and employees of the Company, with representatives of
PricewaterhouseCoopers, LLP and with counsel to the Company.
Based upon such counsel's examination of the Offering
Memorandum (including
17
the Exchange Act Documents), such counsel's investigations
made in connection with the preparation of the Offering
Memorandum (excluding the Exchange Act Documents) and such
counsel's participation in the conferences referred to above,
such counsel has no reason to believe that the Offering
Memorandum, including the Exchange Act Documents contains any
untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading, except that in each case such
counsel need not express belief with respect to the financial
statements or other financial data contained in the Offering
Memorandum or incorporated therein by reference.
(d) Xxxxxxxxxxx X. Xxxxxxx, General Counsel of the Company,
shall have furnished to the Initial Purchasers his written opinion, as General
Counsel to the Company, addressed to the Initial Purchasers and dated such
Delivery Date, in form and substance reasonably satisfactory to the Initial
Purchasers, to the effect that:
(i) Other than as set forth in the Offering
Memorandum, there are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock pursuant to the
Company's charter or by-laws or any agreement or other
instrument known to such counsel;
(ii) To such counsel's knowledge, the Company and
each of its subsidiaries have good and marketable title to all
property (real and personal) described in the Offering
Memorandum as being owned by them, free and clear of all
liens, claims, security interests or other encumbrances except
such as are described in the Offering Memorandum or, to the
extent that any such liens, claims, security interests or
other encumbrances would not have a Material Adverse Effect
(individually or in the aggregate) and all the material
property described in the Offering Memorandum as being held
under lease by the Company and its subsidiaries is held by
them under valid, subsisting and enforceable leases, with only
such exceptions as would not have a Material Adverse Effect
(individually or in the aggregate);
(iii) To such counsel's knowledge and except as (1)
otherwise disclosed in the Offering Memorandum or in the
documents incorporated therein by reference, and (2) as
provided in the Registration Rights Agreement, there are no
contracts, agreements or understandings between the Company
and any person granting such person the right to require the
Company to include such person's securities in the securities
registered pursuant to Registration Statement;
(iv) To such counsel's knowledge and except as
otherwise disclosed or incorporated by reference in the
Offering Memorandum, there are no legal or governmental
proceedings pending or threatened, against the Company or any
of its subsidiaries or to which the Company or any of its
18
subsidiaries is a party or of which any property or assets of
the Company or any of its subsidiaries is the subject which,
if determined adversely to the Company or any of its
subsidiaries, are reasonably likely to cause a Material
Adverse Effect; and
(v) None of the issue and sale of the CODES and
Guarantees being delivered on such Delivery Date by the
Company and the Guarantors and the compliance by the Company
and the Guarantors, as applicable, with all of the provisions
of this Agreement and the consummation of the transactions
contemplated hereby requires any consent, approval,
authorization or other order of, or registration or filing
with, any federal court, federal regulatory body, federal
administrative agency or other federal governmental official
having authority over government procurement matters
(provided, that the opinion contained in this paragraph (v)
may be delivered by other counsel reasonably satisfactory to
the Initial Purchasers).
(e) The Initial Purchasers shall have received from Xxxxxx &
Xxxxxxx, counsel for the Initial Purchasers, such opinion or opinions, dated the
Delivery Date, with respect to the issuance and sale of the CODES and
Guarantees, the Offering Memorandum and other related matters as the Initial
Purchasers may reasonably require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of enabling
them to pass upon such matters;
(f) At the time of the First Delivery Date, the Initial
Purchasers shall have received from PricewaterhouseCoopers, LLP a letter, in
form and substance satisfactory to the Initial Purchasers, addressed to the
Initial Purchasers and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act and
under Rule 101 of AICPA's Code of Professional Conduct and are in compliance
with the applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the
date hereof (or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is given in the
Offering Memorandum, as of a date not more than five days prior to the date
hereof), the conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants' "comfort
letters" to underwriters in connection with registered public offerings;
(g) With respect to the letter of PricewaterhouseCoopers, LLP
referred to in the preceding paragraph and delivered to the Initial Purchasers
(the "initial letter"), on any subsequent Optional Delivery Date, the Company
shall have furnished to the Initial Purchasers a letter (the "bring-down
letter") of such accountants, in form and substance satisfactory to the Initial
Purchasers and dated such Delivery Date (i) confirming that they are independent
public accountants within the meaning of the Securities Act and Code of
Professional Conduct are in compliance with the applicable requirements relating
to the qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or, with
respect to matters involving
19
changes or developments since the respective dates as of which specified
financial information is given in the Offering Memorandum, as of a date not more
than five days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter;
(h) The Company shall have furnished to the Initial Purchasers
a certificate, dated such Delivery Date and delivered on behalf of the Company,
of its Chairman of the Board, its President or a Vice President and its chief
financial officer, in form and substance satisfactory to the Initial Purchasers,
to the effect that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct as of the date given and
as of such Delivery Date; and the Company has complied with all its
agreements contained herein to be performed prior to or on such
Delivery Date; and
(ii) Such officer has carefully examined the Offering
Memorandum and, in such officer's opinion (A) the Offering Memorandum,
as of its date, did not include any untrue statement of a material fact
and did not omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and (B) since the date of the Offering
Memorandum, no event has occurred which should have been set forth in a
supplement or amendment to the Offering Memorandum.
(i) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g)(2) of the
Rules and Regulations and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(j) The Indenture shall have been duly executed and delivered
by the Company and the Trustee and the CODES shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee;
(k) The Company, the Guarantors and the Initial Purchasers
shall have executed and delivered the Registration Rights Agreement (in form and
substance satisfactory to the Initial Purchasers) and the Registration Rights
Agreement shall be in full force and effect;
(l) The NASD shall have accepted the CODES for trading on
PORTAL;
(m)(i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included in the Offering Memorandum any loss
20
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, except (A) as set forth or incorporated by
reference or contemplated in the Offering Memorandum and (B) for operating
losses incurred in the ordinary course of business, or (ii) since such date
there shall not have been any change in the capital stock or long-term debt of
the Company and its subsidiaries (except for issuances of shares of Common Stock
upon exercise of outstanding options described or incorporated by reference in
the Offering Memorandum or pursuant to Authorized Grants), or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, except as set forth or incorporated by
reference or contemplated in the Offering Memorandum, the effect of which, in
any such case described in clause (i) or (ii), is, in the reasonable judgment of
the Initial Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or the delivery of the CODES being
delivered on such Delivery Date on the terms and in the manner contemplated in
the Offering Memorandum;
(n) On or before the date of this Agreement, the Company shall
have received amendments to L-3 Communications Corporation's Third Amended and
Restated Credit Agreement dated as of October 17, 2001 and L-3 Communications
Corporation's Second Amended and Restated 364 Day Credit Agreement dated as of
May 16, 2001, each such amendment in form and substance satisfactory to the
Initial Purchasers and counsel to the Initial Purchasers.
(o) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following:
(i) trading in securities generally on the NYSE, the
American Stock Exchange, the NASDAQ National Market or the
over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market,
shall have been suspended or the settlement of such trading
generally shall have been materially disrupted or minimum
prices shall have been established on any such exchange or
market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction;
(ii) a banking moratorium shall have been declared by
Federal or state authorities of the United States;
(iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the
United States; or
(iv) there shall have occurred such a material
adverse change in general domestic or international economic,
political or financial conditions, including without
limitation as a result of terrorist activities after the date
hereof, or the
21
effect of international conditions on the financial markets in
the United States shall be such, as to make it in the case of
(iii) or (iv), in the sole judgment of a majority in interest
of the several Initial Purchasers, impracticable or
inadvisable to proceed with the offering or delivery of the
CODES being delivered on such Delivery Date on the terms and
in the manner contemplated in the Offering Memorandum.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance satisfactory to
counsel to the Initial Purchasers.
6. Representations, Warranties and Agreements of the Initial
Purchasers. Each Initial Purchaser represents and warrants that it is a QIB and
is not acquiring the CODES with a view to any distribution thereof or with any
present intention of offering or selling any of the CODES in a transaction that
would violate the Securities Act or the securities laws of any State of the
United States or any applicable jurisdiction. In connection with the sale of the
CODES by the Initial Purchaser, each Initial Purchaser will solicit offers to
buy the CODES only from, and will offer to sell the CODES only to, the Eligible
Purchasers (defined as persons whom the Initial Purchaser reasonably believes
are "qualified institutional buyers" as defined in Rule 144A under the
Securities Act) in accordance with this Agreement and on the terms contemplated
by the Offering Memorandum. Each Initial Purchaser, severely and not jointly,
agrees with the Company that:
(a) The CODES and the Conversion Shares have not been and will
not be registered under the Securities Act in connection with the initial
offering of the CODES;
(b) Such Initial Purchaser is purchasing the CODES pursuant to
a private sale exemption from registration under the Securities Act;
(c) The CODES have not been and will not be offered or sold by
such Initial Purchaser or its affiliates acting on its behalf within the United
States or to, or for the account or benefit of, United States persons except in
accordance with Rule 144A;
(d) Such Initial Purchaser will not offer or sell the CODES in
the United States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D, including (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar medium or broadcast over television or radio, or
(ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising in the United States; and
(e) The CODES have not been and will not be registered under
the Securities Act and may not be offered or sold except in accordance with an
exemption from the registration requirements of the Securities Act. Such Initial
Purchaser represents that it has been offered, sold or delivered the CODES, and
will not offer, sell or deliver the CODES as a part of its distribution at
22
any time except in accordance with Rule 144A under the Securities Act.
(f) Such Initial Purchaser further agrees that it has not
entered and will not enter into any contractual arrangement with respect to the
distribution or delivery of the CODES, except with its affiliates or with the
prior written consent of the Company.
(g) Such Initial Purchaser further represents and agrees that
(i) it has not offered or sold and will not offer or sell any CODES to persons
in the United Kingdom prior to the expiry of the period of six months from the
issue date of the CODES, except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (s principal or
agent) for the purpose of their businesses or otherwise in circumstances that
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities regulations 1995,
(ii) it has complied with and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in relation to
the CODES in, from or otherwise involving the United Kingdom), and (iii) it has
only issued or passed on and will only issue or pass on in the United Kingdom
any documents received by it in connection with the issuance of the CODES to a
person who is of a kind described in Article 11(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1995 or is a person to whom
the document may otherwise be lawfully issued or passed on.
(h) Such Initial Purchaser agrees not to cause any
advertisement of the CODES to be published in any newspaper or periodical or
posted in any public place and not to issue any circular relating to the CODES.
(i) Such Initial Purchaser understands that the Company and,
for purposes of the opinions to be delivered to you pursuant to Section 5
hereof, counsel to the Company, General Counsel to the Company and counsel to
the Initial Purchasers, will rely upon the accuracy and truth of the foregoing
representations and such Initial Purchaser hereby consents to such reliance.
Each Initial Purchaser further agrees that, in connection with
the sale of the CODES by such Initial Purchaser, it will solicit offers to buy
the CODES only from, and will offer to sell the CODES only to Eligible
Purchasers.
7. Indemnification and Contribution.
(a) The Company and the Guarantors shall jointly and severally
indemnify and hold harmless each Initial Purchaser, its officers and employees
and each person, if any, who controls any Initial Purchaser within the meaning
of the Securities Act, from
23
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of CODES), to which
that Initial Purchaser, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Offering Memorandum or in any amendment or supplement thereto, (ii) the omission
or alleged omission to state in the Offering Memorandum, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading or
(iii) any act or failure to act or any alleged act or failure to act by any
Initial Purchaser in connection with, or relating in any manner to, the CODES or
the offering contemplated hereby, and which is included as part of or referred
to in any loss, claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the Company and the
Guarantors shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Initial Purchaser
through its gross negligence or willful misconduct), and shall reimburse each
Initial Purchaser and each such officer, employee or controlling person promptly
upon demand for any legal or other expenses reasonably incurred by that Initial
Purchaser, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company and the Guarantors shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made or incorporated by reference in the Offering Memorandum,
or in any such amendment or supplement, in reliance upon and in conformity with
written information concerning such Initial Purchaser furnished to the Company
by or on behalf of any Initial Purchaser specifically for inclusion therein,
which information consists solely of the information specified in Section 7(e)
of this Agreement. The foregoing indemnity agreement is in addition to any
liability which the Company or the Guarantors may otherwise have to any Initial
Purchaser or to any officer, employee or controlling person of that Initial
Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company, the Guarantors, their officers and
employees and the Guarantors, each of their directors and each person, if any,
who controls the Company and the Guarantors within the meaning of the Securities
Act, from and against any loss, claim, damage or liability, joint or several,
24
or any action in respect thereof, to which the Company or any such director,
officer or controlling person, the Guarantors, may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained or incorporated by reference (A)
in the Offering Memorandum or in any amendment or supplement thereto, or (B) in
any Blue Sky Application or (ii) the omission or alleged omission to state in,
or incorporated by reference in, the Offering Memorandum, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Initial Purchaser furnished
to the Company by or on behalf of that Initial Purchaser specifically for
inclusion therein, and shall reimburse the Company and any such director,
officer or controlling person of the Company for any legal or other expenses
reasonably incurred by the Company, such Guarantor or any such director, officer
or controlling person of the Company in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Initial Purchaser may otherwise have to the
Company, the Guarantors or any such director, officer, employee, or controlling
person of the Company.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 7.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs
25
of investigation; provided, however, any indemnified party shall have the right
to employ separate counsel in any such action and to participate in the defense
thereof but the fees and expenses of such counsel shall be at the expense of the
indemnified party unless (i) the employment thereof has been specifically
authorized by the indemnifying party in writing, (ii) such indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party and in the reasonable judgment of such
counsel, it is advisable for such indemnified party to employ separate counsel
or (iii) the indemnifying party has failed to assume the defense of such action
and employ counsel reasonably satisfactory to the indemnified party, in which
case, if such indemnified party notifies the indemnifying party in writing that
it elects to employ separate counsel at the expense of the indemnifying party,
the indemnifying party shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to one local counsel) at any time for all such indemnified parties,
which firm shall be designated in writing by Xxxxxx Brothers Inc., if the
indemnified parties under this Section 7 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 7 consist of the Company,
the Guarantors or any of the Company's or the Guarantors' directors, officers,
employees or controlling persons. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 7
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 7(a) or 7(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
26
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Guarantors on the one hand and the Initial
Purchasers on the other from the offering of the CODES and Guarantees or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Guarantors, on the one hand and the Initial Purchasers on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Guarantors, on the one hand and the Initial Purchasers on the other with respect
to such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the CODES purchased under this Agreement (before
deducting expenses) received by the Company and the Guarantors, on the one hand,
and the total underwriting discounts and commissions received by the Initial
Purchasers with respect to the shares of the CODES and Guarantees purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the CODES under this Agreement, in each case as set forth in the
table on the cover page of the Offering Memorandum. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, and the Guarantors or the Initial
Purchasers, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantors and the Initial Purchasers agree that it would not
be just and equitable if contributions pursuant to this Section 7 were to be
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 7 shall be deemed to include, for purposes of this Section 7(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), no Initial Purchaser shall
be required to contribute any amount in excess of the amount by which the total
price at which the CODES purchased by it exceeds the amount of any damages which
the Initial Purchaser has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of
27
such fraudulent misrepresentation. The Initial Purchasers' obligations to
contribute as provided in this Section 7(d) are several in proportion to their
respective underwriting obligations and not joint.
(e) The Initial Purchasers severally confirms and the Company and the Guarantors
acknowledge that the statements with respect to the offering of the CODES by the
Initial Purchasers and the third, sixth, seventh, eighth, ninth, twelfth,
thirteenth, fourteenth and sixteenth paragraphs and the second sentence of the
tenth paragraph under the caption "Plan of Distribution" in the Offering
Memorandum are correct and constitute the only information concerning the
Initial Purchasers furnished in writing to the Company by or on behalf of the
Initial Purchasers specifically for inclusion in the Offering Memorandum.
8. Defaulting Initial Purchasers.
28
If, on the Closing Date, any Initial Purchaser defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Initial Purchasers shall be obligated to purchase the aggregate
principal amount of Initial Notes which the defaulting Initial Purchaser agreed
but failed to purchase on the Closing Date in the respective proportions which
the total aggregate principal amount of Initial Notes set opposite the name of
each remaining non-defaulting Initial Purchaser in Schedule 1 hereto bears to
the total aggregate principal amount of Notes set opposite the names of all the
remaining non-defaulting Initial Purchasers in Schedule 1 hereto; provided,
however, that the remaining non-defaulting Initial Purchasers shall not be
obligated to purchase any Initial Notes on the Closing Date if the total
aggregate principal amount of Initial Notes which the defaulting Initial
Purchasers agreed but failed to purchase on such date exceeds 9.09% of the total
aggregate principal amount at maturity of Initial Notes to be purchased on the
Closing Date, and any remaining non-defaulting Initial Purchaser shall not be
obligated to purchase more than 110% of the aggregate principal amount at
maturity of Initial Notes which it agreed to purchase on the Closing Date
pursuant to the terms of Section 3. If the foregoing maximums are exceeded, the
remaining non-defaulting Initial Purchasers, or those other underwriters
satisfactory to the Initial Purchasers who so agree, shall have the right, but
shall not be obligated, to purchase on the Closing Date, in such proportion as
may be agreed upon among them, the total aggregate principal amount of Initial
Notes to be purchased on the Closing Date. If the remaining Initial Purchasers
or other underwriters satisfactory to the Initial Purchasers do not elect to
purchase on the Closing Date the aggregate principal amount of Initial Notes
which the defaulting Initial Purchasers agreed but failed to purchase, this
Agreement shall terminate without liability on the part of any non-defaulting
Initial Purchasers and the Issuer, except that the Issuer will continue to be
liable for the payment of expenses to the extent set forth in Section 5 and 10.
As used in this Agreement, the term "Initial Purchaser" includes, for all
purposes of this Agreement unless the context requires otherwise, any party not
listed in Schedule 1 hereto who, pursuant to this Section 8, purchases Initial
Notes which a defaulting Initial Purchaser agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company for damages caused by its
default. If other purchasers are obligated or agree to purchase the CODES of a
defaulting or withdrawing Initial Purchaser, either the remaining non-defaulting
Initial Purchasers or the Company may postpone the Delivery Date for up to seven
full business days in order to effect any changes in the Offering Memorandum or
in any other document or arrangement that, in the opinion of counsel to the
Company or counsel to the Initial Purchasers, may be necessary.
9. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by the Initial Purchasers by notice given to and
received by the Company prior to
29
delivery of and payment for the CODES if, prior to that time, any of the events
described in Sections 5(m) and (0) shall have occurred or if the Initial
Purchasers shall decline to purchase the CODES for any reason permitted under
this Agreement.
10. Reimbursement of Initial Purchasers' Expenses. If the
Company and the Guarantors shall fail to tender the CODES and the Guarantees for
delivery to the Initial Purchasers by reason of any failure, refusal or
inability on the part of the Company and the Guarantors to perform any agreement
on its part to be performed, or because any other condition of the Initial
Purchasers' obligations hereunder required to be fulfilled by the Company and
the Guarantors is not fulfilled, the Company and the Guarantors will reimburse
the Initial Purchasers for all reasonable out-of-pocket expenses (including fees
and disbursements of counsel) incurred by the Initial Purchasers in connection
with this Agreement and the proposed purchase of the CODES and the Guarantees,
and upon demand the Company and the Guarantors shall pay the full amount thereof
to Xxxxxx Brothers Inc. on behalf of the several Initial Purchasers.
11. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail, telex or facsimile transmission to Xxxxxx Brothers Inc., 000 Xxxxxx
Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000, Attention: Syndicate Department (Fax:
000-000-0000), with a copy, in the case of any notice pursuant to Section 7(c),
to the Director of Litigation, Office of the General Counsel, Xxxxxx Brothers
Inc., 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000; and
(b) if to the Company or to the Guarantors, shall be delivered
or sent by mail, telex or facsimile transmission to L-3 Communications, 000
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxxxxxxx X. Xxxxxxx
(Fax: 000-000-0000),
provided, however, that any notice to an Initial Purchaser pursuant to Section
7(c) shall be delivered or sent by mail, telex or facsimile transmission to each
such Initial Purchaser, which address will be supplied to any other party hereto
by Xxxxxx Brothers Inc. upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Initial Purchasers by Xxxxxx Brothers Inc.
12. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers, the
Company, the Guarantors and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company and the Guarantors contained in this Agreement shall also be deemed
to be for the benefit of the officers and employees of each Initial Purchaser
and the person or persons, if any, who control any Initial Purchaser within the
meaning of Section 15 of the Securities Act and (B) any indemnity agreement of
the Initial Purchasers contained in Section 7(b) of this Agreement shall be
deemed to be for the benefit of directors and officers of the Company and any
person controlling the Company within the meaning of Section 15 of the
Securities Act. Nothing contained in this Agreement is intended or shall be
construed to give
30
any person, other than the persons referred to in this Section 12, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
13. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Guarantors and the Initial
Purchasers contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the CODES and shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement or any investigation made by
or on behalf of any of them or any person controlling any of them.
14. Definition of the Terms "Business Day" and "Subsidiary."
For purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the
Securities Act Rules and Regulations.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
16. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
[Signature pages follow]
31
If the foregoing correctly sets forth the agreement among the
Company, the Guarantors and the Initial Purchasers, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
L-3 COMMUNICATIONS HOLDINGS, INC.,
as the Company
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
L-3 COMMUNICATIONS CORPORATION,
HYGIENETICS ENVIRONMENTAL SERVICES, INC.,
L-3 COMMUNICATIONS ILEX SYSTEMS, INC.,
L-3 COMMUNICATIONS AYDIN CORPORATION,
MPRI, INC.,
L-3 COMMUNICATIONS SPD TECHNOLOGIES, INC.,
SPD HOLDINGS, INC.,
SPD ELECTRICAL SYSTEMS, INC.,
SPD SWITCHGEAR, INC.,
PAC ORD, INC.,
XXXXXXXX, INC.,
POWER PARAGON, INC.,
L-3 COMMUNICATIONS ESSCO, INC.,
SOUTHERN CALIFORNIA MICROWAVE, INC.,
L-3 COMMUNICATIONS STORM CONTROL SYSTEMS,
INC.,
L-3 COMMUNICATIONS DBS MICROWAVE, INC.,
MICRODYNE CORPORATION,
ELECTRODYNAMICS, INC. and
INTERSTATE ELECTRONICS CORPORATION,
L-3 COMMUNICATIONS HOLDINGS, INC.,
as the Guarantors
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
Purchase Agreement
If the foregoing correctly sets forth the agreement among the
Company, the Guarantors and the Initial Purchasers, please indicate your
acceptance in the space provided for that purpose below.
Accepted and agreed by:
XXXXXX BROTHERS INC.
BEAR, XXXXXXX & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: XXXXXX BROTHERS INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Authorized Representative
Purchase Agreement
SCHEDULE 1
Principal Amount
Initial Purchasers of Firm CODES
------------------ -------------
---------------------------------------------------------------------------
Xxxxxx Brothers Inc. ........................... $ 140,000,000
---------------------------------------------------------------------------
Bear, Xxxxxxx & Co. Inc......................... $ 122,500,000
---------------------------------------------------------------------------
Credit Suisse First Boston Corporation.......... $ 87,500,000
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Total $ 350,000,000
---------------------------------------------------------------------------
FORM OF LOCK-UP LETTER AGREEMENT
XXXXXX BROTHERS INC.
BEAR, XXXXXXX & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
c/x XXXXXX BROTHERS INC.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Dear Sirs:
The undersigned understands that you propose to enter into a purchase
agreement (the "Purchase Agreement") providing for the purchase by you (the
"Initial Purchaser") of [___]% Senior Subordinated Convertible Contingent Debt
Securities CODES due 2011 (the "CODES"), convertible into shares of Common
Stock, par value $.01 per share (the "Common Stock"), of L-3 Communications
Holdings, Inc. (the "Company") and that the Initial Purchasers propose to
reoffer the CODES (the "Offering") in reliance on an exemption from registration
under the Securities Act of 1933.
In consideration of the execution of the Purchase Agreement by the
Initial Purchasers, and for other good and valuable consideration, the
undersigned hereby irrevocably agrees that, without the prior written consent of
Xxxxxx Brothers Inc., the undersigned will not, directly or indirectly, (1)
offer for sale, sell, or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock
(including, without limitation, shares of Common Stock that may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common Stock
that may be issued upon exercise of any option or warrant) or securities
convertible into or exchangeable or exercisable for Common Stock owned by the
undersigned on the date of execution of this Lock-Up Letter Agreement or on the
date of the completion of the Offering, or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
for a period of 90 days after the date of the final Offering Memorandum relating
to the Offering except in each case for transactions by any person other than
the Company relating to shares of Common Stock or other securities convertible
into or exchangeable or exercisable for Common Stock acquired in open market
transactions after the completion of the Offering and except for the sale by Xx.
XxXxxxx of up to 300,000 shares of Common Stock, at any time and from time to
time beginning 30 days after the Closing Date (as defined in the Purchase
Agreement).
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Purchase Agreement does not become
effective, or if the Purchase Agreement (other than the provisions thereof which
survive termination) shall terminate or be terminated prior to payment for and
delivery of the CODES, we will be released from our obligations under this
Lock-Up Letter Agreement.
It is further understood that the Company and the Initial Purchasers
have represented to the undersigned that certain officers and directors of the
Company shall be required to execute a Lock-Up Letter Agreement the terms of
which are identical to those contained herein. The Initial Purchasers and/or the
Company will immediately notify the undersigned if any such Lock-Up Letter
Agreement is modified, amended, waived or terminated in a manner so as to impose
less stringent restrictions upon the person to which such Lock-Up Letter
Agreement applies as well as the nature of any such modification, amendment,
waiver or termination and this Lock-Up Letter Agreement shall be deemed to have
been modified, amended, waived or terminated in the same manner as of the same
effective date and time.
The undersigned understands that the Company and the Initial Purchasers
will proceed with the Offering in reliance on this Lock-Up Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
By: _______________________________
Name:
Title:
Dated: _____________________
