1,850,000 SHARES
L-3 COMMUNICATIONS HOLDINGS, INC.
COMMON STOCK, $.01 PAR VALUE
INTERNATIONAL UNDERWRITING AGREEMENT
------------------------------------
February __, 1999
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
BEAR, XXXXXXX INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
XXXXXXX XXXXX INTERNATIONAL
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
X.X. XXXXXXXXX, TOWBIN
As Lead Managers of the several
International Managers named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
L-3 Communications Holdings, Inc., a Delaware corporation (the
"Company"), and Lockheed Xxxxxx Corporation, Xxxxxx Brothers Capital Partners
III, L.P., LB I Group Inc., Xxxxxx Brothers MBG Partners 1997 (A) L.P. and
Xxxxxx Brothers MBG Partners 1997 (B) L.P. (collectively, the "Selling
Stockholders") propose to sell an aggregate of 1,850,000 shares (the
"International Firm Stock") of the Company's Common Stock, par value $.01 per
share (the "Common Stock"). Of the 1,850,000 shares of the International Firm
Stock, 700,000 shares are being sold by the Company and 1,150,000 are being
sold by the Selling Stockholders. In addition, the Company proposes to grant to
the International Managers named in Schedule 1 hereto (the "International
Managers") an option to purchase up to an additional 277,500 shares of the
Common Stock on the terms and for the purposes set forth in Section 3
("International Option Stock"). The International Firm Stock and the
International Option Stock, if purchased, are hereinafter collectively called
the "Stock." As described in the Prospectus (hereinafter defined), the Company
will use the net proceeds from the sale of the Stock to repay any existing
indebtedness under L-3 Communications Corporation's senior credit facilities
and for general corporate purposes, including potential acquisitions. This is
to confirm the agreement concerning the purchase of the Stock from the Company
and the Selling Stockholders by the International Managers.
It is understood by all parties that the Company and the Selling
Stockholders are concurrently entering into an agreement dated the date hereof
(the "U.S. Underwriting Agreement") providing for the sale by the Company of
2,800,000 shares of Common Stock and the sale by the Selling Stockholders of
4,600,000 shares of Common Stock (together the "Firm Stock") through
arrangements with certain underwriters inside the United States (the "U.S.
Underwriters"), for whom Xxxxxx Brothers Inc., Bear, Xxxxxxx & Co. Inc., Credit
Suisse First Boston Corporation, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Xxxxxx Xxxxxxx & Co. Incorporated and X.X. Xxxxxxxxx, Towbin are
acting as representatives. In addition, the Company proposes to grant to the
U.S. Underwriters an option to purchase up to an additional 1,100,000 shares of
the Common Stock on the terms set forth in the U.S. Underwriting Agreement (the
"U.S. Option Stock" and, together with the Firm Stock, the "U.S. Stock"). The
International Managers and the U.S. Underwriters simultaneously are entering
into an agreement between the U.S. and international underwriting syndicates
(the "Agreement Between U.S. Underwriters and International Managers") which
provides for, among other things, the transfer of shares of Common Stock
between the two syndicates. Two forms of prospectus are to be used in
connection with the offering and sale of shares of Common Stock contemplated by
the foregoing, one relating to the Stock and the other relating to the U.S.
Stock. The latter form of prospectus will be identical to the former except for
certain substitute pages as included in the registration statement and
amendments thereto referred to below. Except as used in Sections 3, 4, 5, 11,
12 and 13 herein, and except as the context may otherwise require, references
herein to the Stock shall include all the shares of Common Stock which may be
sold pursuant to either this Agreement or the U.S. Underwriting Agreement, and
references herein to any prospectus whether in preliminary or final form, and
whether as amended or supplemented, shall include both the international and
the U.S. versions thereof.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1, and amendments No. 1
and No. 2 thereto, with respect to the Stock have (i) been prepared by
the Company in conformity with the requirements of the United States
Securities Act of 1933, as amended (the "Securities Act") and the
rules and regulations (the "Rules and Regulations") of the United
States Securities and Exchange Commission (the "Commission")
thereunder, (ii) been filed with the Commission under the Securities
Act and (iii) become effective under the Securities Act. Copies of
such registration statement and the amendments thereto have been
delivered by the Company to you as the lead managers (the "Lead
Managers") of the International Managers. As used in this Agreement,
"Effective Time" means the time as of which such registration
statement, or the most recent post-effective amendment thereto, if
any, was declared effective by the Commission; "Effective Date" means
the date of the Effective Time; " Preliminary Prospectus" means each
prospectus included in such registration statement, or amendments
thereof, before it became effective under the Securities Act and any
prospectus filed with the Commission by the Company with the consent
of the Lead Managers pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration
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statement, as amended at the Effective Time, including all information
contained in the final prospectus filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations in accordance with Section
6 hereof and deemed to be a part of the registration statement as of
the Effective Time pursuant to paragraph (b) of Rule 430A of the Rules
and Regulations; and "Prospectus" means such final prospectus, as
first filed with the Commission pursuant to paragraph (1) or (4) of
Rule 424(b) of the Rules and Regulations. If the Company has filed or
is required pursuant to the terms hereof to file a registration
statement pursuant to Rule 462(b) under the Securities Act registering
additional shares of Common Stock (a "Rule 462(b) Registration
Statement"), then, unless otherwise specified, any reference herein to
the term "Registration Statement" shall be deemed to include such Rule
462(b) Registration Statement. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus; and no
stop order suspending the effectiveness of the Registration Statement
is in effect, and no proceedings for such purpose are pending before
or threatened by the Commission. Any Rule 462(b) Registration
Statement filed after the effectiveness of this Agreement will become
effective no later than 10:00 A.M., New York City time, on the date
following this Agreement.
(b) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the
effectiveness of this Agreement) conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement
(including, if the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such
Rule 462(b) Registration Statement and any amendments thereto) or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all respects to the
requirements of the Securities Act and the Rules and Regulations and
do not and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that
no representation or warranty is made as to information contained in
or omitted from the Registration Statement or the Prospectus in
reliance upon and in conformity with written information furnished to
the Company through the Lead Managers by or on behalf of any
International Manager specifically for inclusion therein.
(c) The market-related and customer-related data and estimates
included in the Prospectus are based on or derived from sources which
the Company believes to be reliable and accurate.
(d) The Company and each of its subsidiaries (as defined in
Section 17) have been duly organized and are validly existing as
corporations or limited liability companies, as applicable, in good
standing under the laws of their
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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) Prior to the delivery of the Stock on the First Delivery
Date, the Company will have an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description thereof
contained in the Prospectus; and (i) approximately 85% of the capital
stock of Cardiovascular Computer Systems, Ltd., (ii) approximately 64%
of the membership interests in L-3 Communications Network Security
Systems LLC, (iii) approximately 92% of the capital stock of Microdyne
Corporation and (iv) 100% of the issued shares of capital stock of
each other subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims, other than (A) liens, encumbrances, equities or
claims described in the Prospectus and (B) such other liens,
encumbrances, equities or claims as are not, individually or in the
aggregate, material to the Company and its subsidiaries, taken as a
whole.
(f) Prior to the delivery of the Stock on the First Delivery
Date, the unissued shares of the Stock to be issued and sold by the
Company to the International Managers hereunder and to the U.S.
Underwriters under the U.S. Underwriting Agreement will have been duly
and validly authorized and, when issued and delivered against payment
therefor as provided herein and in the U.S. Underwriting Agreement,
will be duly and validly issued, fully paid and non-assessable; and
the Stock will conform to the description thereof contained in the
Prospectus.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and L-3 Communications Corporation (the
"Significant Subsidiary").
(h) The execution, delivery and performance of this Agreement and
the U.S. Underwriting Agreement by the Company and the Significant
Subsidiary and the consummation of the transactions contemplated
hereby and thereby will not conflict with or constitute a breach of,
or a default under, any indenture,
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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 property or assets of the Company or any of its
subsidiaries is subject that is material to the financial condition or
prospects of the Company and its subsidiaries, taken as a whole
(collectively, the "Material Agreements"), except for breach of which,
individually, or in the aggregate, would not result in a Material
Adverse Effect, nor will such actions result in any violation of the
provisions of the charter or by-laws, or other organizational
documents of the Company or any of its subsidiaries or any material
law, statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties or assets, provided
that the provisions for indemnification and contribution hereunder and
thereunder may be limited by equitable principles and public policy
consideration; and except for the registration of the Stock and the
U.S. Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under the United States Securities Exchange Act of 1934, as amended
(the "Exchange Act") and applicable state or foreign securities laws
in connection with the purchase and distribution of the Stock by the
International Managers and the U.S. Underwriters, no consent,
approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement, or the U.S.
Underwriting Agreement by the Company and the Significant Subsidiary
and the consummation of the transactions contemplated hereby and
thereby.
(i) Except as described in the Prospectus and other than the
Registration Rights Agreement, dated December 11, 1998, among the
Significant Subsidiary and the parties named therein, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right (other than rights which have
been waived or satisfied or rights not exercisable in connection with
the Registration Statement) to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act.
(j) Except as described in the Registration Statement, the
Company has not sold or issued any shares of Common Stock during the
six-month period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act other than shares issued pursuant to employee benefit
plans, qualified stock options plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.
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(k) Neither the Company nor any of its subsidiaries has incurred,
since the date of the latest audited financial statements included in
the Prospectus, any liability or obligation, direct or contingent, or
entered into any transaction, in each case not in the ordinary course
of business, that is material to the Company and its subsidiaries
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus; and, since such date, there has not been any material
change in the capital stock or material increase in the short-term or
long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving or which would
reasonably be expected to involve a Material Adverse Effect, otherwise
than as described or contemplated in the Prospectus.
(l) The historical and pro forma financial statements, together
with the related notes, set forth in the Prospectus comply as to form
in all material respects with the requirements of Regulation S-X under
the Securities Act applicable to registration statements on Form S-1
under the Securities Act. The historical financial statements of the
Company fairly present the financial position of the Company (or its
predecessors) at the respective dates indicated and the results of
operations and cash flows of the Company (or its predecessors) for the
respective periods indicated, in accordance with generally accepted
accounting principles consistently applied throughout such periods.
Such pro forma financial statements have been prepared on a basis
consistent with such historical statements of the Company, except for
the pro forma adjustments specified therein, and give effect to
assumptions made on a reasonable basis and in good faith and present
fairly the historical and proposed transactions contemplated by the
Prospectus, this Agreement and the U.S. Underwriting Agreement. The
other financial and statistical information and data included in the
Prospectus, historical and pro forma, have been derived from the
financial records of the Company (or its predecessors) and, in all
material respects, have been prepared on a basis consistent with such
books and records of the Company (or its predecessor), except as
disclosed therein.
(m) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company, whose report appears in the
Prospectus and who have delivered the initial letter referred to in
Section 9(h) hereof, are independent public accountants as required by
the Securities Act and the Rules and Regulations; Ernst & Young LLP
and KPMG LLP, whose reports appear in the Prospectus and who have
delivered the initial letters referred to in Sections 9(i) and 9(j)
hereof, are independent accountants as required by the Securities Act
and the Rules and Regulations; and Xxxxx Xxxxxxxx LLP, who have
delivered the initial letters referred to in Section 9(k) hereof, are
independent accountants as required by the Securities Act and the
Rules and Regulations.
(n) The Company and each of its subsidiaries have good and
marketable title to all property (real and personal) described in the
Prospectus as
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being owned by them, free and clear of all liens, claims,
security interests or other encumbrances except such as are described
in the Prospectus or, to the extent that any such liens, claims,
security interests or other encumbrances would not have a Material
Adverse Effect (individually or in the aggregate) and all the material
property described in the Prospectus as being held under lease by the
Company and its subsidiaries is held by them under valid, subsisting
and enforceable leases, with only such exceptions as would not have a
Material Adverse Effect (individually or in the aggregate).
(o) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, trademarks, service
marks, trade names, copyrights, licenses, inventions, trade secrets
and other rights, and all registrations or applications relating
thereto, described in the Prospectus as being owned by them or
necessary for the conduct of their business, except as such would not
have a Material Adverse Effect (individually or in the aggregate), and
the Company is not aware of any pending or threatened claim to the
contrary or any pending or threatened challenge by any other person to
the rights of the Company and its subsidiaries with respect to the
foregoing which, if determined adversely to the Company and its
subsidiaries, would have a Material Adverse Effect (individually or in
the aggregate).
(p) Except as described in the Prospectus, there are no legal or
governmental proceedings pending or, to the knowledge of the Company,
threatened, against the Company or any of its subsidiaries or to which
the Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, are reasonably likely to cause a Material Adverse Effect.
(q) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed
as exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations.
(r) No material relationship, direct or indirect, exists between
or among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
except as described in the Prospectus.
(s) The Company is not involved in any strike, job action or
labor dispute with any group of employees that would have a Material
Adverse Effect, and, to the Company's knowledge, no such action or
dispute is threatened.
(t) Except as disclosed in the Prospectus, the Company is in
compliance in all material respects with all presently applicable
provisions of the
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Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the
Company would have any material liability; the Company has not
incurred and does not expect to incur any material liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from,
any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code") (other than
contributions in the normal course which are not in default); and each
"pension plan" for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would reasonably be expected to
cause the loss of such qualification.
(u) The Company and its subsidiaries have filed all federal,
state and local income and franchise tax returns required to be filed
through the date hereof and have paid all taxes due thereon, and no
tax deficiency has been determined adversely to the Company or any of
its subsidiaries nor does the Company have any knowledge of any tax
deficiency which, if determined adversely to the Company and its
subsidiaries, might have a Material Adverse Effect.
(v) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws or other organizational documents,
(ii) is in default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or
condition contained in any Material Agreement or (iii) is in violation
in any material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may
be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its
business, except as would not, individually or in the aggregate, have
a Material Adverse Effect.
(w) To the best of the Company's knowledge, neither the Company
nor any of its subsidiaries, nor any director, officer, agent,
employee or other person associated with or acting on behalf of the
Company or any of its subsidiaries, has used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or
employee from corporate funds or violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; except as such
that would not have a Material Adverse Effect.
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(x) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes,
medical wastes, hazardous wastes or hazardous substances by the
Company or any of its subsidiaries (or, to the knowledge of the
Company, any of their predecessors in interest) at, upon or from any
of the property now or previously owned or leased by the Company or
its subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or
remedial action which would not have, or would not be reasonably
likely to have, singularly or in the aggregate with all such
violations and remedial actions, a Material Adverse Effect; there has
been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to
or caused by the Company or any of its subsidiaries or with respect to
which the Company has knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not
have or would not be reasonably likely to have, singularly or in the
aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a Material Adverse Effect;
and the terms "hazardous wastes," "toxic wastes," "hazardous
substances" and "medical wastes" shall have the meanings specified in
any applicable local, state, federal and foreign laws or regulations
with respect to environmental protection.
(y) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the United States
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
(z) All of the representations and warranties of the parties to
the U.S. Underwriting Agreement are true and correct.
2. Representations, Warranties and Agreements of the Selling
Stockholders. Each of the Selling Stockholders severally represents, warrants
and agrees that:
(a) Such Selling Stockholder has, and immediately prior to the
First Delivery Date such Selling Stockholder will have, good and
marketable title to the shares of Stock to be sold by such Selling
Stockholder hereunder and under the U.S. Underwriting Agreement on
such date, free and clear of all liens, encumbrances, equities or
claims except those that may be created by the International Managers;
and upon delivery of such shares and payment therefor pursuant hereto
and thereto, good and valid title to such shares, free and clear of
all liens, encumbrances, equities or claims, will pass to the several
International Managers and the U.S. Underwriters.
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(b) Such Selling Stockholder has placed in custody under a
custody agreement (the "Custody Agreement") with the Company, as
custodian (the "Custodian"), for delivery under this Agreement,
certificates in negotiable form (with signature guaranteed by a
commercial bank or trust company having an office or correspondent in
the United States or a member firm of the New York or American Stock
Exchanges) representing the shares of Stock to be sold by such Selling
Stockholder hereunder.
(c) Such Selling Stockholder has duly executed and delivered a
power of attorney (the "Power of Attorney") appointing the Custodian
and one or more other persons, as attorneys-in-fact, with full power
of substitution, and with full authority (exercisable by any one or
more of them) to execute and deliver this Agreement and to take such
other action as may be necessary or desirable to carry out the
provisions hereof on behalf of such Selling Stockholder.
(d) Such Selling Stockholder has full right, power and authority
to enter into this Agreement, the U.S. Underwriting Agreement, the
Power of Attorney and the Custody Agreement; the execution, delivery
and performance of this Agreement, the U.S. Underwriting Agreement,
the Power of Attorney and the Custody Agreement by such Selling
Stockholder and the consummation by such Selling Stockholder of the
transactions contemplated hereby and thereby will not conflict with or
constitute a breach of, or a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to
which such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of such
Selling Stockholder is subject, nor will such actions result in any
violation of the provisions of the charter or bylaws or the articles
of partnership, as applicable, of the Selling Stockholder or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over such Selling Stockholder or
the property or assets of such Selling Stockholder; and, except for
the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications
as may be required under the Exchange Act and applicable state or
foreign securities laws in connection with the purchase and
distribution of the Stock by the International Managers and the U.S.
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of this
Agreement, the U.S. Underwriting Agreement, the Power of Attorney or
the Custody Agreement by such Selling Stockholder and the consummation
by such Selling Stockholder of the transactions contemplated hereby
and thereby.
(e) The Registration Statement and the Prospectus and any further
amendments or supplements to the Registration Statement or the
Prospectus, when they become effective or are filed with the
Commission, as the case may be, do not and will not, as of the
applicable effective date (as to the Registration
10
Statement and any amendment thereto) and as of the applicable
filing date (as to the Prospectus and any amendment or supplement
thereto) contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided that this
representation and warranty is made as to information contained in or
omitted from the Registration Statement or the Prospectus under the
caption "Selling Stockholders" relating to such Selling Stockholder.
(f) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the shares of the
Stock.
3. Purchase of the Stock by the International Managers. On the basis
of the representations and warranties contained in, and subject to the terms
and conditions of, this Agreement, the Company agrees to sell 700,000 shares of
International Firm Stock and each Selling Stockholder, severally and not
jointly, agrees to sell the number of shares of the International Firm Stock
set forth opposite its name in Schedule 2 hereto to the several International
Managers and each of the International Managers, severally and not jointly,
agrees to purchase the number of shares of International Firm Stock set
opposite that International Manager's name in Schedule 1 hereto. Each
International Manager shall be obligated to purchase from the Company and from
each Selling Stockholder that number of shares of the International Firm Stock
which represents the same proportion of the number of shares of the
International Firm Stock to be sold by the Company and each Selling Stockholder
as the number of shares of the International Firm Stock set forth opposite the
name of such International Manager in Schedule 1 represents of the total number
of shares of the International Firm Stock to be purchased by all of the
International Managers pursuant to this Agreement. The respective purchase
obligations of the International Managers with respect to the International
Firm Stock shall be rounded among the International Managers to avoid
fractional shares, as the Lead Managers may determine.
In addition, the Company grants to the International Managers an
option to purchase, in whole or in part, the International Option Stock. Such
option is granted for the purpose of covering over-allotments in the sale of
International Firm Stock and is exercisable as provided in Section 5 hereof.
Shares of International Option Stock shall be purchased severally for the
account of the International Managers in proportion to the number of shares of
International Firm Stock set opposite the name of such International Managers
in Schedule 1 hereto. The respective purchase obligations of each International
Manager with respect to the International Option Stock shall be adjusted by the
Lead Managers so that no International Manager shall be obligated to purchase
International Option Stock other than in 100 share amounts. The price of both
the International Firm Stock and any International Option Stock shall be $[___]
per share.
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The Company and the Selling Stockholders shall not be obligated to
deliver any of the Stock to be delivered on any Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein and in the U.S. Underwriting
Agreement.
4. Offering of Stock by the International Managers.
Upon authorization by the Lead Managers of the release of the
International Firm Stock, the several International Managers propose to offer
the International Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
Each International Manager agrees that, except to the extent permitted
by the Agreement Between U.S. Underwriters and International Managers, it will
not offer or sell any of the Stock outside of the United States.
5. Delivery of and Payment for the Stock. Delivery of and payment for
the International Firm Stock shall be made at the office of Xxxxxx & Xxxxxxx,
000 Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M., New York City time, on
the third full business day following the date of this Agreement or at such
other date or place as shall be determined by agreement between the Lead
Managers and the Company. This date and time are sometimes referred to as the
"First Delivery Date." On the First Delivery Date, the Company and the Selling
Stockholders shall deliver or cause to be delivered certificates representing
the International Firm Stock to the Lead Managers for the account of each
International Manager against payment to or upon the order of the Company and
the Selling Stockholders of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each International Manager hereunder. Upon delivery, the
International Firm Stock shall be registered in such names and in such
denominations as the Lead Managers shall request in writing not less than two
full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the International
Firm Stock, the Company and the Selling Stockholders shall make the
certificates representing the International Firm Stock available for inspection
by the Lead Managers in New York, New York, not later than 2:00 P.M., New York
City time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Lead Managers. Such notice
shall set forth the aggregate number of shares of International Option Stock as
to which the option is being exercised, the names in which the shares of
International Option Stock are to be registered, the denominations in which the
shares of International Option Stock are to be issued and the date and time, as
determined by the Lead Managers, when the shares of International Option Stock
are to be delivered; provided, however, that this date and time shall not be
earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been
exercised. The date and time the shares of International Option Stock are
delivered are sometimes referred to as a
12
"Second Delivery Date" and the First Delivery Date and any Second Delivery Date
are sometimes each referred to as a "Delivery Date."
Delivery of and payment for the International Option Stock shall be
made at the place specified in the first sentence of the first paragraph of
this Section 5 (or at such other place as shall be determined by agreement
between the Lead Managers and the Company) at 10:00 A.M., New York City time,
on such Second Delivery Date. On such Second Delivery Date, the Company shall
deliver or cause to be delivered the certificates representing the
International Option Stock to the Lead Managers for the account of each
International Manager against payment to or upon the order of the Company of
the purchase price by wire transfer in immediately available funds. Time shall
be of the essence, and delivery at the time and place specified pursuant to
this Agreement is a further condition of the obligation of each International
Manager hereunder. Upon delivery, the International Option Stock shall be
registered in such names and in such denominations as the Lead Managers shall
request in the aforesaid written notice. For the purpose of expediting the
checking and packaging of the certificates for the International Option Stock,
the Company shall make the certificates representing the International Option
Stock available for inspection by the Lead Managers in New York, New York, not
later than 2:00 P.M., New York City time, on the business day prior to such
Second Delivery Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the Lead
Managers and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than Commission's close of business on the
second business day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by
Rule 430A(a)(3) under the Securities Act; to make no further amendment
or any supplement to the Registration Statement or to the Prospectus
except as permitted herein; to advise the Lead Managers, promptly (i)
after it receives notice thereof, of the time when any amendment to
the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and (ii) if the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, when the Rule
462(b) Registration Statement has become effective and, in the case of
each of (i) and (ii), to furnish the Lead Managers with copies
thereof; to advise the Lead Managers, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification
of the Stock for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or
of any request by the Commission for the amending or supplementing of
the Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of
any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending
13
any such qualification, to use promptly its reasonable best
efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Lead Managers and to
counsel for the International Managers a conformed copy of the
Registration Statement as originally filed with the Commission, and
each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith;
(c) To deliver promptly to the Lead Managers such number of the
following documents as the Lead Managers shall reasonably request each
Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any
time after the Effective Time in connection with the offering or sale
of the Stock or any other securities relating thereto and if at such
time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus in order to comply
with the Securities Act, to notify the Lead Managers and, upon their
request, to file such document and to prepare and furnish (without
charge for the 9 month period following the First Delivery Date) to
each International Manager and to any dealer in securities as many
copies as the Lead Managers may from time to time reasonably request
of an amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the Lead
Managers, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Lead Managers and counsel for the
International Managers and not to file any such document to which the
Lead Managers shall reasonably object after having been given
reasonable notice of the proposed filing thereof;
(f) As soon as practicable after the Effective Date, (it being
understood that the Company shall have until at least 410 days after
the end of the Company's current fiscal quarter) to make generally
available to the Company's security holders and to deliver to the Lead
Managers an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the
Securities Act and the Rules and Regulations (including, at the option
of the Company, Rule 158);
14
(g) Promptly from time to time to take such action as the Lead
Managers may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Lead
Managers may request (provided, however, that the Company shall not be
obligated to qualify as a foreign corporation in any jurisdiction in
which it is not now so qualified or to take any action that would
subject it to general consent to service of process in any
jurisdiction in which it is not now so subject) and to comply with
such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock;
(h) For a period of 180 days from the date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell, or otherwise
dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition by any person
at any time in the future of) any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock
(other than the Stock, the U.S. Stock and shares issued pursuant to
currently outstanding options, warrants, rights or convertible
securities), or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case without the prior
written consent of Xxxxxx Brothers Inc.; and to cause each of the
Selling Stockholders, Xx. Xxxxx X. Xxxxx and Xx. Xxxxxx X. XxXxxxx to
furnish to the Lead Managers, prior to the date of the Prospectus, a
letter or letters, in form and substance satisfactory to counsel for
the International Managers, pursuant to which each such person shall
agree not to, directly or indirectly, (1) offer for sale, sell, or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common
Stock or (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether
any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case for a period of 270 days from the date of the
Prospectus except for transactions by any person other than the
Company and its subsidiaries relating to shares of Common Stock or
other securities convertible into or exchangeable or exercisable for
Common Stock acquired in open market transactions after the completion
of the offering of Common Stock described in the Prospectus or sales
by Messrs. Xxxxx and XxXxxxx of up to 100,000 and 200,000 shares of
Common Stock, respectively, at any time and from time to time
beginning 30 days after the Closing Date, without the prior written
consent of Xxxxxx Brothers Inc.;
15
(i) To apply the net proceeds from the sale of the Stock being
sold by the Company as set forth in the Prospectus;
(j) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment
company" within the meaning of such term under the United States
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder; and
(k) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Shares, to
file a Rule 462(b) Registration Statement with the Commission
registering the Shares not so covered in compliance with Rule 462(b)
by 10:00 A.M., New York City time, on the date following this
Agreement and to pay to the Commission the filing fee for such Rule
462(b) Registration Statement at the time of the filing thereof or to
give irrevocable instructions for the payment of such fee pursuant to
Rule 111(b) under the Securities Act.
7. Further Agreements of the Selling Stockholders. Each Selling
Stockholder agrees:
(a) For a period of 270 days from the date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell or otherwise
dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition by any person
at any time in the future of) any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock
(other than the Stock, the U.S. Stock and shares issued pursuant to
currently outstanding options, warrants, rights or convertible
securities) or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case without the prior
written consent of Xxxxxx Brothers Inc.;
(b) That the Stock to be sold by such Selling Stockholder
hereunder which is represented by the certificates held in custody for
such Selling Stockholder is subject to the interest of the
International Managers, the U.S. Underwriters and the other Selling
Stockholders, that the arrangements made by such Selling Stockholder
for such custody are to that extent irrevocable except as provided in
the Custody Agreement, and that the obligations of such Selling
Stockholder hereunder shall not be terminated by any act of such
Selling Stockholder, by operation of law or the occurrence of any
other event; and
(c) To deliver to the Lead Managers prior to the First Delivery
Date a properly completed and executed United States Treasury
Department Form W-8 (if such Selling Stockholder is a non-United
States person) or Form W-9 (if such Selling Stockholder is a United
States person).
16
8. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable
in that connection; (b) the costs incident to the preparation, printing and
filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto (provided that the International Managers and
the U.S. Underwriters will pay $350,000 of the printing costs of the
Registration Statement); (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the costs of delivering and distributing
the Custody Agreement and the Power of Attorney; (e) the filing fees incident
to securing any required review by the National Association of Securities
Dealers, Inc. of the terms of sale of the Stock; (f) any applicable listing or
other fees; (g) the fees and expenses of qualifying the Stock under the
securities laws of the several jurisdictions as provided in Section 6(g) and of
preparing, printing and distributing a Blue Sky Memorandum (including related
fees and expenses of counsel to the International Managers); and (h) all other
costs and expenses incident to the performance of the obligations of the
Company and the Selling Stockholders; provided that (x) the Company and the
International Managers will bear their own "road show" expenses and (y) the
Company on the one hand, and the International Managers and the U.S.
Underwriters on the other hand, will each bear one half of the cost of the
charter aircraft used in connection with the "road show" relating to the
offering of Common Stock described in the Prospectus.
9. Conditions of International Managers' Obligations. The respective
obligations of the International Managers hereunder are subject to the
accuracy, when made and on each Delivery Date, of the representations and
warranties of the Company and the Selling Stockholders contained herein, to the
performance by the Company and the Selling Stockholders of their respective
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied
with; and any 462(b) Registration Statement required by this Agreement
to be filed shall have been so filed and become effective.
(b) No International Manager or U.S. Underwriter shall have
discovered and disclosed to the Company on or prior to such Delivery
Date that the Registration Statement or the Prospectus or any
amendment or supplement thereto contains an untrue statement of a fact
which, in the opinion of Xxxxxx & Xxxxxxx, counsel for the
International Managers, is material or omits to state a fact which, in
the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
17
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the U.S.
Underwriting Agreement, the Stock, the Registration Statement and the
Prospectus, and all other legal matters relating to this Agreement and
the transactions contemplated hereby shall be reasonably satisfactory
in all material respects to counsel for the International Managers,
and the Company and the Selling Stockholders shall have furnished to
such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(d) Xxxxxxx Xxxxxxx & Xxxxxxxx shall have furnished to the Lead
Managers its written opinion, as counsel to the Company, addressed to
the International Managers and dated such Delivery Date, in form and
substance reasonably satisfactory to the Lead Managers, to the effect
that:
(i) The Company and each of its Delaware subsidiaries have
been duly organized and are validly existing as corporations and
in good standing under the laws of Delaware, and have all
corporate power and authority necessary to conduct their
respective businesses as described in the Registration Statement
and the Prospectus;
(ii) All of the outstanding shares of Common Stock of the
Company (including the shares of Stock and U.S. Stock being
delivered on such Delivery Date) have been duly authorized and
all outstanding shares of Common Stock have been and, upon
payment and delivery in accordance with this Agreement, the Stock
will be validly issued, fully paid and non-assessable; all of the
issued shares of capital stock of each Delaware subsidiary of the
Company have been duly and validly authorized and issued, are
fully paid and non-assessable (except for directors' qualifying
shares) and, based solely on an examination of each such
subsidiary's stock ledger and minute books, all such shares are
held of record by the Company and/or a subsidiary of the Company;
(iii) The Registration Statement has become effective under
the Securities Act and the Prospectus was filed pursuant to Rule
424(b) of the rules and regulations of the Commission under the
Act and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued or
proceeding for that purpose has been instituted or threatened by
the Commission;
(iv) The statements contained in the Prospectus under the
captions "Risk Factors-A Number of Shares are or Will be
Available for Future Sale", "Risk Factors-Certain Factors may
Delay or Prevent a Change of Control Transaction,"
"Business-Pension Plans," "Certain Relationships and Related
Transactions," "Management-Limitations on Liability and
Indemnification Matters," "Management-1997 Stock Option
18
Plan," "Management-Employment Agreements," "Description of
Certain Indebtedness," "Description of Capital Stock" and "Shares
Eligible for Future Sale," insofar as they describe charter
documents, contracts, statutes, rules and regulations and other
legal matters, constitute an accurate summary thereof in all
material respects;
(v) The statements made in the Prospectus under the caption
"Certain United States Federal Tax Considerations," insofar as
they purport to constitute summaries of matters of United States
federal tax law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters described
therein in all material respects;
(vi) To such counsel's knowledge, there are no contracts or
documents of a character required by the Securities Act or the
rules and regulations thereunder to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not described or
filed as required by the Securities Act or the rules and
regulations thereunder;
(vii) This Agreement and the U.S. Underwriting Agreement
have each been duly authorized, executed and delivered by the
Company and the Significant Subsidiary;
(viii) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the compliance
by the Company and the Significant Subsidiary, as applicable,
with all of the provisions of this Agreement and the U.S.
Underwriting Agreement and the consummation of the transactions
contemplated hereby and thereby will not breach or result in a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument filed as an exhibit to
the Registration Statement nor will such actions violate the
Certificate of Incorporation or By-Laws or other organizational
documents of the Company or any of its subsidiaries or any
federal or New York statute, the Delaware Limited Liability
Company Act or the Delaware General Corporation Law or any rule
or regulation that has been issued pursuant to any federal or New
York statute, the Delaware Limited Liability Company Act or the
Delaware General Corporation Law or any order known to such
counsel issued pursuant to any federal or New York statute, the
Delaware Limited Liability Company Act or the Delaware General
Corporation Law by any court or governmental agency or body or
court having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets; and no
consent, approval, authorization, order, registration or
qualification of or with any federal or New York governmental
agency or body or any Delaware governmental agency or body acting
pursuant to the
19
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 U.S.
Stock and Stock by the Company, except for the registration under
the Act and the Exchange Act of the U.S. Stock and the Stock, and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
U.S. Stock and the Stock by the International Managers and the
U.S. Underwriters. The opinions set forth in this paragraph are
based upon our consideration of only those statutes, rules and
regulations which, in such counsel's experience, are normally
applicable to securities underwriting transactions.
In rendering such opinion, such counsel may state that its
opinion is limited to matters governed by the federal laws of the
United States and the laws of the State of New York and the
Delaware General Corporation Law.
Such counsel shall also have furnished to the Lead Managers
a written statement, addressed to the International Managers and
dated such Delivery Date stating: Such counsel has not
independently verified the accuracy, completeness or fairness of
the statements made or included in the Registration Statement or
the Prospectus and take no responsibility therefor, except as and
to the extent set forth in paragraph (iv) above. In the course of
the preparation by the Company of the Registration Statement and
the Prospectus, such counsel participated in conferences with
certain officers and employees of the Company, with
representatives of PricewaterhouseCoopers LLP, Ernst & Young LLP,
KPMG LLP, Xxxxx Xxxxxxxx LLP and with counsel to the Company.
Based upon such counsel's examination of the Registration
Statement and the Prospectus, our investigations made in
connection with the preparation of the Registration Statement and
the Prospectus and our participation in the conferences referred
to above, (i) such counsel is of the opinion that the
Registration Statement, as of its effective date, and the
Prospectus, as of February __, 1999, complied as to form in all
material respects with the requirements of the Act and the
applicable rules and regulations of the Commission thereunder,
except that in each case such counsel need not express opinion
with respect to the financial statements or other financial data
contained or incorporated by reference in the Registration
Statement or the Prospectus, and (ii) such counsel has no reason
to believe that the Registration Statement, as of its effective
date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein
or necessary in order to make the statements therein not
20
misleading or that the Prospectus contains any untrue statement
of a material fact or omits to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except
that in each case such counsel need not express belief with
respect to the financial statements or other financial data
contained in the Registration Statement or the Prospectus.
(e) Xxxxxxxxxxx X. Xxxxxxx, General Counsel of the Company, shall
have furnished to the Lead Managers his written opinion, as General
Counsel to the Company, addressed to the International Managers and
dated such Delivery Date, in form and substance reasonably
satisfactory to the Lead Managers, to the effect that:
(i) Other than as set forth in the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase, nor
any restriction upon the voting or transfer of, any shares of the
Stock pursuant to the Company's charter or by-laws or any
agreement or other instrument known to such counsel;
(ii) To such counsel's knowledge, the Company and each of
its subsidiaries have good and marketable title to all property
(real and personal) described in the Prospectus as being owned by
them, free and clear of all liens, claims, security interests or
other encumbrances except such as are described in the Prospectus
or, to the extent that any such liens, claims, security interests
or other encumbrances would not have a Material Adverse Effect
(individually or in the aggregate) and all the material property
described in the Prospectus as being held under lease by the
Company and its subsidiaries is held by them under valid,
subsisting and enforceable leases, with only such exceptions as
would not have a Material Adverse Effect (individually or in the
aggregate);
(iii) To such counsel's knowledge and except as otherwise
disclosed in the Prospectus, there are no legal or governmental
proceedings pending or threatened, against the Company or any of
its subsidiaries or to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries,
are reasonably likely to cause a Material Adverse Effect;
(iv) To such counsel's knowledge and except as otherwise
disclosed in the Prospectus, there are no contracts, agreements
or understandings between the Company and any person granting
such person the right to require the Company to include such
person's securities in the securities registered pursuant to the
Registration Statement;
21
(v) None of the issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the compliance
by the Company and the Significant Subsidiary with all of the
provisions of this Agreement and the U.S. Underwriting Agreement
and the consummation of the transactions contemplated hereby and
thereby requires any consent, approval, authorization or other
order of, or registration or filing with, any federal court,
federal regulatory body, federal administrative agency or other
federal governmental official having authority over government
procurement matters (provided, that the opinion in this paragraph
(v) may be delivered by other counsel reasonably satisfactory to
the Lead Managers).
(f) Xxxxxx X. Block, Esq., as counsel for Lockheed Xxxxxx
Corporation and Xxxxxx Xxxxxxxxxx, Esq., as counsel for the other
Selling Stockholders shall have each furnished to the Lead Managers
their written opinion, as counsel to such Selling Stockholder,
addressed to the International Managers and dated the First Delivery
Date, in form and substance reasonably satisfactory to the Lead
Managers, to the effect that:
(i) Such Selling Stockholder has full right, power and
authority to enter into this Agreement, the U.S. Underwriting
Agreement, the Power of Attorney and the Custody Agreement; the
execution, delivery and performance of this Agreement, the U.S.
Underwriting Agreement, the Power of Attorney and the Custody
Agreement by such Selling Stockholder and the consummation by
such Selling Stockholder of the transactions contemplated hereby
and thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any statute, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to
such counsel to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound or to which any of the
property or assets of such Selling Stockholder is subject, nor
will such actions result in any violation of the provisions of
the charter or bylaws or the articles of partnership, as
applicable, of such Selling Stockholder or any statute or any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over such Selling
Stockholder or the property or assets of such Selling
Stockholder; and, except for the registration of the Stock under
the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable state or foreign securities laws in
connection with the purchase and distribution of the Stock by the
International Managers and the U.S. Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required
for the execution, delivery and performance of this Agreement,
the U.S.
22
Underwriting Agreement, the Power of Attorney or the Custody
Agreement by such Selling Stockholder and the consummation by
such Selling Stockholder of the transactions contemplated hereby
and thereby;
(ii) This Agreement and the U.S. Underwriting Agreement has
each been duly authorized, executed and delivered by or on behalf
of such Selling Stockholder;
(iii) A Power-of-Attorney and a Custody Agreement have been
duly authorized, executed and delivered by such Selling
Stockholder and constitute valid and binding agreements of such
Selling Stockholder, enforceable in accordance with their
respective terms except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating
to or affecting creditors' rights generally, and by general
principles of equity, regardless of whether considered in a
proceeding in equity or at law; and
(iv) Upon physical delivery of the shares of Stock to be
sold by such Selling Stockholder to the International Managers
and the U.S. Underwriters in the State of New York with stock
powers duly endorsed in blank by an effective endorsement and
payment therefor in accordance with the terms of this Agreement
and the U.S. Underwriting Agreement, the International Managers
and the U.S. Underwriters will become the "protected purchaser"
(as defined in Section 8-303(a) of the New York Uniform
Commercial Code) of such shares of Stock, free of any "adverse
claim" (as defined in Section 8-102(a)(1) of the New York Uniform
Commercial Code).
(i) In rendering such opinion, such counsel may state that its
opinion is limited to matters governed by the federal laws of the
United States of America, the laws of the State of New York or the
State of Maryland, as the case may be, and the Delaware General
Corporation Law and (ii) in rendering the opinion in Section 9(f)(iv)
above, rely upon a certificate of such Selling Stockholder in respect
of matters of fact as to ownership of and any adverse liens,
encumbrances, equities or claims on the shares of Stock sold by such
Selling Stockholder, provided that such counsel shall furnish copies
thereof to the Lead Managers and state that they believe that the
International Managers, U.S. Underwriters and they are justified in
relying upon such certificate.
(g) The Lead Managers shall have received from Xxxxxx & Xxxxxxx,
counsel for the International Managers, such opinion or opinions,
dated such Delivery Date, with respect to the issuance and sale of the
Stock, the Registration Statement, the Prospectus and other related
matters as the Lead Managers may reasonably require, and the Company
shall have furnished to such counsel such
23
documents as they reasonably request for the purpose of enabling
them to pass upon such matters.
(h) At the time of execution of this Agreement, the Lead Managers
shall have received from PricewaterhouseCoopers LLP a letter, in form
and substance satisfactory to the Lead Managers, addressed to the
International Managers and dated the date hereof (i) confirming that
they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five days prior
to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(i) At the time of execution of this Agreement, the Lead Managers
shall have received from Ernst & Young LLP letters, in form and
substance satisfactory to the Lead Managers, addressed to the
International Managers and dated the date hereof (i) confirming that
they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five days prior
to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(j) At the time of execution of this Agreement, the Lead Managers
shall have received from KPMG LLP a letter, in form and substance
satisfactory to the Lead Managers, addressed to the International
Managers and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities
Act and are in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission and (ii) stating, as of the date hereof (or, with
respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the
date hereof), the conclusions and findings of such firm with respect
to the financial information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with
registered public offerings.
24
(k) At the time of execution of this Agreement, the Lead Managers
shall have received from Xxxxx Xxxxxxxx LLP letters, in form and
substance satisfactory to the Lead Managers, addressed to the
International Managers and dated the date hereof (i) confirming that
they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five days prior
to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(l) With respect to the letters referred to in the preceding four
paragraphs and delivered to the Lead Managers concurrently with the
execution of this Agreement (the "initial letters"), the Company shall
have furnished to the Lead Managers letters (the "bring-down letters")
of such accountants, in form and substance satisfactory to the Lead
Managers, addressed to the International Managers and dated such
Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letters
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is
given in the Prospectus, as of a date not more than five days prior to
the date of the bring- down letter), the conclusions and findings of
such firms with respect to the financial information and other matters
covered by the initial letters and (iii) confirming in all material
respects the conclusions and findings set forth in the initial
letters.
(m) The Company shall have furnished to the Lead Managers a
certificate, dated such Delivery Date, of its Chairman of the Board,
its President or a Vice President and its chief financial officer
stating that:
(i) The representations and warranties of the Company in
Section 1 are true and correct as of such Delivery Date; the
Company has complied with all its agreements contained herein;
and the conditions set forth in Sections 9(a) and 9(o) have been
fulfilled; and
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the Effective
Date, the Registration Statement and Prospectus did not include
any untrue statement of a material fact and did not omit to state
a material fact required to be stated therein or necessary to
make the statements therein
25
not misleading, and (B) since the Effective Date no event
has occurred which should have been set forth in a supplement or
amendment to the Registration Statement or the Prospectus.
(n) Each of the Selling Stockholders (or the Custodian or one or
more attorneys-in-fact on behalf of each of the Selling Stockholders)
shall have furnished to the Lead Managers on the First Delivery Date a
certificate, dated the First Delivery Date, signed by, or on behalf
of, each of the Selling Stockholders (or the Custodian or one or more
attorneys-in-fact) stating that the representations and warranties of
each of the Selling Stockholders contained herein are true and correct
as of the First Delivery Date and that each of the Selling
Stockholders has complied with all agreements contained herein to be
performed by each of the Selling Stockholders at or prior to the First
Delivery Date.
(o) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or (ii) since such
date there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or
affecting the business, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause
(i) or (ii), is, in the judgment of the Lead Managers, so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(p) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Company's debt securities by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities.
(q) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the
26
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United States or
there shall have been a declaration of a national emergency or war by
the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in
the United States shall be such) as to make it, in the judgment of a
majority in interest of the several International Managers,
impracticable or inadvisable to proceed with the public offering or
delivery of the Stock being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(r) The Lead Manager shall have received a copy of the executed
Custody Agreement and Power of Attorney from each Selling Stockholder.
(s) The closing under the U.S. Underwriting Agreement shall have
occurred concurrently with the closing hereunder on the First Delivery
Date.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the International Managers.
10. Indemnification and Contribution.
(a) The Company and the Significant Subsidiary, jointly and severally,
shall indemnify and hold harmless each International Manager, its officers and
employees and each person, if any, who controls any International Manager
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that International Manager,
officer, employee or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus or in any amendment or supplement
thereto, (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment
or supplement thereto, or in any Blue Sky Application any material fact
required to be stated therein or necessary to make the statements therein not
misleading or (iii) any act or failure to act or any alleged act or failure to
act by any International Manager in connection with, or relating in any manner
to, the Stock or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action arising
out of or based upon matters covered by clause (i) or (ii) above (provided that
the Company and the Significant Subsidiary shall not be liable under this
clause (iii) to the extent that it is determined in a final judgment by a court
of competent jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such acts or failures to act undertaken or
27
omitted to be taken by such International Manager through its gross negligence
or willful misconduct), and shall reimburse each International Manager and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that International Manager, officer,
employee or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action
as such expenses are incurred; provided, however, that the Company and the
Significant Subsidiary shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any such amendment or supplement, in reliance upon and in
conformity with written information concerning such International Manager
furnished to the Company through the Lead Managers by or on behalf of any
International Manager specifically for inclusion therein, which information
consists solely of the information specified in Section 10(f); provided
further, that the indemnification contained in this paragraph (a) with respect
to the Preliminary Prospectus shall not inure to the benefit of any
International Manager (or to the benefit of any officers or employees of any
International Manager or of any person controlling such International Manager)
on account of any such loss, claim, damage, liability or action arising from
the sale of Stock by such International Manager to any person if the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in the Preliminary Prospectus was corrected in the
Prospectus and the International Manager sold Stock to that person without
sending or giving at or prior to the written confirmation of such sale, a copy
of the Prospectus (as then amended or supplemented) if the Company has
previously furnished sufficient copies thereof to the International Manager on
a timely basis to permit such sending or giving. The foregoing indemnity
agreement is in addition to any liability which the Company or the Significant
Subsidiary may otherwise have to any International Manager or to any officer,
employee or controlling person of that International Manager.
(b) Each Selling Stockholder, severally and not jointly, shall
indemnify and hold harmless each International Manager, its officers and
employees and each person, if any, who controls any International Manager
within the meaning of Section 15 of the Securities Act, from and against any
loss, claim, damage or liability (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or
investigating any such action or claim), or any action in respect thereof
(including, but not limited to, any loss, claim, damage or liability or action
relating to purchases and sales of Stock), to which that International Manager,
officer, employee or controlling person may become subject, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, the Registration Statement or the Prospectus or
in any amendment or supplement thereto or (ii) the omission or alleged omission
to state in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, any material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or the omission or alleged omission relates to
information under the caption "Selling Stockholders" relating to such Selling
Stockholder; provided, however, that the indemnification contained in this
paragraph (b) with
28
respect to the Preliminary Prospectus shall not inure to the benefit of any
International Manager (or to the benefit of any officers or employees of any
International Manager or of any person controlling such International Manager)
on account of any such loss, claim, damage, liability or action arising from
the sale of Stock by such International Manager to any person if the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in the Preliminary Prospectus was corrected in the
Prospectus and the International Manager sold Stock to that person without
sending or giving at or prior to the written confirmation of such sale, a copy
of the Prospectus (as then amended or supplemented) if the Company has
previously furnished sufficient copies thereof to the International Manager on
a timely basis to permit such sending or giving. The foregoing indemnity
agreement is in addition to any liability which the Selling Stockholders may
otherwise have to any International Manager or any officer, employee or
controlling person of that International Manager. Notwithstanding any other
provision of this Section, the liability of each Selling Stockholder under this
Section 10(b) to all such indemnified parties shall not exceed the net amount
received by each such Selling Stockholder (after deducting any underwriting
discount) from the sale of the Stock pursuant to this Agreement.
(c) Each International Manager, severally and not jointly, shall
indemnify and hold harmless the Company, the Selling Stockholders, the officers
and employees of the Company, each of the directors of the Company, and each
person, if any, who controls the Company or any Selling Stockholder within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company or any such director of the Company, officer of the Company or
controlling person of the Company, or Selling Stockholder or controlling person
of any Selling Stockholder may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or (B)
in any Blue Sky Application or (ii) the omission or alleged omission to state
in any Preliminary Prospectus, the Registration Statement or the Prospectus, or
in any amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information concerning such
International Manager furnished to the Company through the Lead Managers by or
on behalf of that International Manager specifically for inclusion therein, and
shall reimburse the Company and any such director of the Company, officer of
the Company or controlling person of the Company, or Selling Stockholder on
controlling person of any Selling Stockholder for any legal or other expenses
reasonably incurred by the Company or any such director of the Company, officer
of the Company or controlling person of the Company, or Selling Stockholder or
controlling person of any Selling Stockholder in connection with investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred. The foregoing indemnity
agreement is in addition to any liability which any International Manager may
otherwise have to the Company or any such director of the Company, officer of
the Company, employee of the Company or
29
controlling person of the Company, or Selling Stockholder or controlling person
of any Selling Stockholder.
(d) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 10. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 10 for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, any indemnified party shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment thereof has been specifically
authorized by the indemnifying party in writing, (ii) such indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party and in the reasonable judgment of such
counsel, it is advisable 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 10 consist of any International Managers
or any of their respective officers, employees or controlling persons, or by
the Company, if the indemnified parties under this Section 10 consist of the
Company or any of the Company's directors, officers, employees or controlling
persons, or by the attorney-in-fact under the Power of Attorney, if the
indemnified parties under this Section 10 consist of the Selling Stockholders
or any of their respective officers, employees or controlling persons provided
that if the Company is the indemnifying party and a Selling Stockholder is an
indemnifying party, such firm shall be designated by such Selling Stockholder
rather than the attorney-in-fact. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit
30
or proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(e) If the indemnification provided for in this Section 10
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 10(a), 10(b) or 10(c) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in
respect thereof, (i) in such proportion as shall be appropriate to reflect the
relative benefits received by the Company, the Significant Subsidiary or the
Selling Stockholders on the one hand and the International Managers on the
other from the offering of the Stock or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, the Significant Subsidiary or
the Selling Stockholders, on the one hand and the International Managers on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, the Significant Subsidiary or the Selling Stockholders, on the one
hand and the International Managers on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Stock purchased under this Agreement (before deducting
expenses) received by the Company, the Significant Subsidiary or the Selling
Stockholders, on the one hand, and the total underwriting discounts and
commissions received by the International Managers with respect to the shares
of the Stock purchased under this Agreement, on the other hand, bear to the
total gross proceeds from the offering of the shares of the Stock under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Significant Subsidiary the Selling Stockholders, or the
International Managers, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission. For purposes of the preceding two sentences, the net proceeds deemed
to be received by the Company shall be deemed to be also for the benefit of the
Significant Subsidiary and information supplied by the Company shall also be
deemed to have been supplied by the Significant Subsidiary. The Company, the
Significant Subsidiary, the Selling Stockholders and the International Managers
agree that it would not be just and equitable if contributions pursuant to this
Section 10 were to be determined by pro rata allocation (even if the
International Managers 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
31
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 10 shall be deemed to include, for purposes of this Section 10(e), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 10(e), no International Manager
shall be required to contribute any amount in excess of the amount by which the
total price at which the Stock underwritten by it and distributed to the public
was offered to the public exceeds the amount of any damages which such
International Manager has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The International
Managers' obligations to contribute as provided in this Section 10(e) are
several in proportion to their respective underwriting obligations and not
joint.
(f) The International Managers severally confirm and the Company and
the Significant Subsidiary acknowledge that the statements with respect to the
public offering of the Stock by the International Managers and the last
sentence of the first paragraph on the cover page of, the legend concerning
stabilization on page (i) of, and the fourth, seventh, ninth, fifteenth,
twentieth, twenty-first and twenty-third paragraphs and the stabilization
language in paragraphs ten through thirteen under the caption "Underwriting"
in, the Prospectus are correct and constitute the only information concerning
such International Managers furnished in writing to the Company by or on behalf
of the International Managers specifically for inclusion in the Registration
Statement and the Prospectus.
11. Defaulting International Managers.
If, on either Delivery Date, any International Manager defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting International Managers shall be obligated to purchase the Stock
which the defaulting International Manager agreed but failed to purchase on
such Delivery Date in the respective proportions which the number of shares of
the International Firm Stock set opposite the name of each remaining
non-defaulting International Manager in Schedule 1 hereto bears to the total
number of shares of the International Firm Stock set opposite the names of all
the remaining non-defaulting International Managers in Schedule 1 hereto;
provided, however, that the remaining non-defaulting International Managers
shall not be obligated to purchase any of the Stock on such Delivery Date if
the total number of shares of the Stock which the defaulting International
Manager or International Managers agreed but failed to purchase on such date
exceeds 9.09% of the total number of shares of the Stock to be purchased on
such Delivery Date, and any remaining non-defaulting International Manager
shall not be obligated to purchase more than 110% of the number of shares of
the Stock which it agreed to purchase such Delivery Date pursuant to the terms
of Section 3. If the foregoing maximums are exceeded, the remaining
non-defaulting International Managers, or those other underwriters satisfactory
to the Lead Managers who so agree, shall have the right, but shall not be
obligated, to purchase, in such proportion as may be agreed upon among them,
all the Stock to be purchased on such Delivery Date. If the remaining
International Managers or other underwriters satisfactory to the Lead Managers
do not elect to
32
purchase the shares which the defaulting International Manager or International
Managers agreed but failed to purchase on such Delivery Date, this Agreement
(or, with respect to the Second Delivery Date, the obligation of the
International Managers to purchase, and of the Company to sell, the
International Option Stock) shall terminate without liability on the part of
any non-defaulting International Manager or the Company or the Selling
Stockholders, except that the Company and the Significant Subsidiary will
continue to be liable for the payment of expenses to the extent set forth in
Sections 8 and 13. As used in this Agreement, the term "International Manager"
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 11, purchases International Firm Stock which a defaulting International
Manager agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting International
Manager of any liability it may have to the Company and the Selling
Stockholders for damages caused by its default. If other underwriters are
obligated or agree to purchase the Stock of a defaulting or withdrawing
International Manager, either the Lead Managers or the Company may postpone the
Delivery Date for up to seven full business days in order to effect any changes
that in the opinion of counsel for the Company or counsel for the International
Managers may be necessary in the Registration Statement, the Prospectus or in
any other document or arrangement.
12. Termination. The obligations of the International Managers
hereunder may be terminated by the Lead Managers by notice given to and
received by the Company and the Selling Stockholders prior to delivery of and
payment for the International Firm Stock if, prior to that time, any of the
events described in Sections 9(o), 9(p) or 9(q), shall have occurred or if the
International Managers shall decline to purchase the Stock for any reason
permitted under this Agreement.
13. Reimbursement of International Managers' Expenses. If (a) the
Company or the Selling Stockholders shall fail to tender the Stock for delivery
to the International Managers by reason of any failure, refusal or inability on
the part of the Company or any Selling Stockholder to perform any agreement on
its part to be performed, or because any other condition of the International
Managers' obligations hereunder required to be fulfilled by the Company or the
Selling Stockholders is not fulfilled, the Company and the Significant
Subsidiary will reimburse the International Managers for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred
by the International Managers in connection with this Agreement and the
proposed purchase of the Stock, and upon demand the Company and the Significant
Subsidiary shall pay the full amount thereof to the Lead Manager(s). If this
Agreement is terminated pursuant to Section 11 by reason of the default of one
or more International Managers, the Company and the Significant Subsidiary
shall not be obligated to reimburse any defaulting International Manager on
account of those expenses.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the International Managers, shall be delivered or sent
by mail, telex or facsimile transmission to Xxxxxx Brothers Inc.,
Three World Financial
33
Center, New York, New York 10285, Attention: Syndicate Department
(Fax: 000-000-0000), with a copy, in the case of any notice pursuant
to Section 10(d), to the Director of Litigation, Office of the General
Counsel, Xxxxxx Brothers Inc., Three World Financial Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000;
(b) if to the Company or to the Significant Subsidiary, shall be
delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Registration Statement,
Attention: Xxxxxxxxxxx X. Xxxxxxx (Fax: 000-000-0000);
(c) if to any Selling Stockholder, shall be delivered or sent by
mail, telex or facsimile transmission to such Selling Stockholder at
the address set forth in the Custody Agreement executed by such
Selling Stockholder;
provided, however, that any notice to an International Manager pursuant to
Section 10(d) shall be delivered or sent by mail, telex or facsimile
transmission to such International Manager at its address set forth in its
acceptance telex to the Lead Managers, which address will be supplied to any
other party hereto by the Lead Managers upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof. The Company and the Selling Stockholders shall be entitled to act and
rely upon any request, consent, notice or agreement given or made on behalf of
the International Managers by Xxxxxx Brothers Inc. on behalf of the Lead
Managers and the Company and the International Managers shall be entitled to
act and rely on any request, consent, notice or agreement given or made on
behalf of the Selling Stockholders by the Custodian.
15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the International Managers, the
Company, the Significant Subsidiary, the Selling Stockholders and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company and the
Selling Stockholders contained in this Agreement shall also be deemed to be for
the benefit of the person or persons, if any, who control any International
Manager within the meaning of Section 15 of the Securities Act and for the
benefit of each International Manager (and controlling persons thereof) who
offers or sells any shares of Common Stock in accordance with the terms of the
Agreement Between U.S. Underwriters and International Managers and (B) the
indemnity agreement of the International Managers contained in Section 10(c) of
this Agreement shall be deemed to be for the benefit of directors of the
Company, officers of the Company who have signed the Registration Statement and
any person controlling the Company within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 15, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
16. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Significant Subsidiary, the Selling
Stockholders and the International Managers contained in this Agreement or made
by or on behalf on them,
34
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
17. Definition of the Terms "Business Day" and "Subsidiary." For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
18. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK.
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Signature pages follow]
35
If the foregoing correctly sets forth the agreement among the Company,
the Significant Subsidiary, the Selling Stockholders and the International
Managers, please indicate your acceptance in the space provided for that
purpose below.
Very truly yours,
L-3 COMMUNICATIONS HOLDINGS, INC.
By:
------------------------------------
Name:
Title:
L-3 COMMUNICATIONS CORPORATION,
the Significant Subsidiary
By:
------------------------------------
Name:
Title:
The Selling Stockholders Named in
Schedule 2 to this Agreement
By: Attorney-in-Fact
By:
------------------------------------
Name:
Title:
Accepted:
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
BEAR, XXXXXXX INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
XXXXXXX XXXXX INTERNATIONAL
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
X.X. XXXXXXXXX, TOWBIN
For themselves and as Lead Managers
of the several International Managers named
in Schedule 1 hereto
By: XXXXXX BROTHERS INTERNATIONAL (EUROPE)
By:
--------------------------------
Authorized Representative
SCHEDULE 1
International Managers Number of Shares
---------------------- ----------------
Xxxxxx Brothers International (Europe).........................
Bear, Xxxxxxx International Limited............................
Credit Suisse First Boston (Europe) Limited....................
Xxxxxxx Xxxxx International....................................
Xxxxxx Xxxxxxx & Co. International Limited.....................
X.X. Xxxxxxxxx, Towbin.........................................
---------
Total 1,850,000
SCHEDULE 2
Number of
Selling Stockholders Shares
-------------------- ------
Lockheed Xxxxxx Corporation...........................................
Xxxxxx Brothers Capital Partners III, L.P.............................
LB I Group Inc. ......................................................
Xxxxxx Brothers MBG Partners 1997 (A) L.P.............................
Xxxxxx Brothers MBG Partners 1997 (B) L.P.............................
Total 1,150,000
