EXECUTION COPY
L-3 COMMUNICATIONS CORPORATION
7% SENIOR SUBORDINATED NOTES DUE 2012
PURCHASE AGREEMENT
June 25, 2002
XXXXXX BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON CORPORATION
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx, Xxxxx Xxxxx
High Yield Capital Markets
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
L-3 Communications Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell to you (the "Initial Purchasers") $750
million in aggregate principal amount of its 7% Senior Subordinated Notes due
2012 (the "Series A Notes") guaranteed (the "Series A Guarantees;" and, together
with the Series A Notes, the "Series A Notes and Guarantees") by Xxxxxxxx, Inc.,
a Delaware corporation, Hygienetics Environmental Services, Inc., a Delaware
corporation, KDI Precision Products, Inc., a Delaware corporation, L-3
Communications AIS GP Corporation, a Delaware corporation, L-3 Communications
Aydin Corporation, a Delaware corporation, L-3 Communications ESSCO, Inc., a
Delaware corporation, L-3 Communications ILEX Systems, Inc., a Delaware
corporation, L-3 Communications Integrated Systems L.P., a Delaware limited
partnership, L-3 Communications Investments Inc., a Delaware corporation, L-3
Communications SPD Technologies, Inc., a Delaware corporation, MPRI, Inc., a
Delaware corporation, Pac Ord, Inc., a Delaware corporation, Power Paragon,
Inc., a Delaware corporation, SPD Electrical Systems, Inc., a Delaware
corporation, SPD Holdings, Inc., a Delaware corporation, SPD Switchgear, Inc., a
Delaware corporation (individually a "Delaware Guarantor" and collectively, the
"Delaware Guarantors") and AMI Instruments, Inc., an Oklahoma corporation,
Apcom, Inc., a Maryland corporation, Celerity Systems Incorporated, a California
corporation, Xxxxxxx Research Corporation, a Florida corporation, EER Systems,
Inc., a Virginia corporation, Electrodynamics, Inc., an Arizona corporation,
Interstate Electronics Corporation, a California corporation, L-3 Communications
Analytics Corporation, a California corporation, L-3 Communications Atlantic
Science and Technology Corporation, a New Jersey corporation, L-3 Communications
Storm Control Systems, Inc. a California corporation, Microdyne Communications
Technologies Incorporated, a Maryland corporation, Microdyne Corporation, a
Maryland corporation,
Microdyne Outsourcing Incorporated, a Maryland corporation and Southern
California Microwave, Inc., a California corporation (individually a
"Non-Delaware Guarantor," collectively the "Non-Delaware Guarantors" and,
together with the Delaware Guarantors, the "Guarantors"), pursuant to the terms
of an Indenture (the "Indenture") among the Company, the Guarantors and The Bank
of New York, as trustee (the "Trustee"), relating to the Series A Notes.
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Indenture.
The Series A Notes will be offered and sold to you pursuant to
an exemption from the registration requirements under the Securities Act of
1933, as amended (the "Act"). The Company has prepared a preliminary offering
memorandum, dated June 7, 2002 (the "Preliminary Offering Memorandum") and will
prepare a final offering memorandum (the "Offering Memorandum"), to be dated
June 25, 2002, relating to the Company, the Series A Notes and the Series A
Guarantees. As described in the Offering Memorandum, the Company will use the
net proceeds from the offering of the Series A Notes to (1) repay its $500.0
million senior subordinated interim loan, and (2) repurchase and/or redeem its
$225 million 10-3/8% Senior Subordinated Notes due 2007.
Upon original issuance thereof, and until such time as the
same is no longer required under the applicable requirements of the Securities
Act, the Series A Notes (and all securities issued in exchange therefor or in
substitution thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISION OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF L-3
COMMUNICATIONS CORPORATION THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL IF L-3 COMMUNICATIONS CORPORATION SO REQUESTS), (2)
TO
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L-3 COMMUNICATIONS CORPORATION OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
You have advised the Company that you will make offers (the
"Exempt Resales") of the Series A Notes purchased by you hereunder on the terms
set forth in the Offering Memorandum, as amended or supplemented, solely to (i)
persons whom you reasonably believe to be "qualified institutional buyers" as
defined in Rule 144A under the Securities Act ("QIBs"), (ii) Xxxxx X. Xxxxx, who
shall have represented to the Company and the Initial Purchasers that he is an
"Accredited Investor" referred to in Rule 501(a)(4), (5) or (6) under the Act
(the "Accredited Investor"), that he is purchasing the Series A Notes for
investment purposes only and with no present intention to resell the Series A
Notes and executed and returned to the Initial Purchasers a certificate in the
form of Exhibit A hereto and (iii) outside the United States to persons other
than U.S. Persons in offshore transactions meeting the requirements of Rule 904
of Regulation S ("Regulations S") under the Securities Act (such persons
specified in clauses (i), (ii) and (iii) being referred to herein as the
"Eligible Purchasers"). As used herein, the terms "offshore transaction,"
"United States" and "U.S. person" have the respective meanings given to them in
Regulation S. You will offer the Series A Notes to Eligible Purchasers initially
at a price equal to 100.0% of the principal amount thereof. Such price may be
changed at any time without notice.
Holders (including subsequent transferees) of the Series A
Notes will have the registration rights set forth in the registration rights
agreement (the "Registration Rights Agreement"), to be dated June 25, 2002 (the
"Closing Date"), in the form of Exhibit C hereto, for so long as such Series A
Notes constitute "Transfer Restricted Securities" (as defined in the
Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Company and the Guarantors will agree to file with the Securities and
Exchange Commission (the "Commission") under the circumstances set forth
therein, (i) a registration statement under the Securities Act (the "Exchange
Offer Registration Statement") relating to the Company's [__]% Senior
Subordinated Notes due 2012 (the "Series B Notes" and, together with the Series
A Notes, the "Notes") and the guarantees thereof (the "Series B Guarantees" and,
together with the Series A Guarantees, the "Guarantees") to be offered in
exchange for the Series A Notes and Guarantees, (such offer to exchange being
referred to collectively as the "Registered Exchange Offer") and (ii) a shelf
registration statement pursuant to Rule 415 under the Securities Act (the "Shelf
Registration Statement") relating to the resale by certain holders of the Series
A Notes, and to use all commercially reasonable efforts to cause such
Registration Statements to be declared effective. This Agreement, the Notes, the
Guarantees (as defined herein), the Indenture and the Registration Rights
Agreement are hereinafter referred to collectively as the "Operative Documents."
This is to confirm the agreements concerning the purchase of the Series A Notes
from the Company by you.
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1. Representations, Warranties and Agreements of the Company
and the Guarantors. The Company and the Guarantors, jointly and severally
represent, warrant and agree that:
(a) The Preliminary Offering Memorandum and Offering
Memorandum with respect to the Series A Notes have been prepared by the Company
for use by the Initial Purchasers in connection with the Exempt Resales. No
order or decree preventing the use of the Offering Memorandum, or any order
asserting that the transactions contemplated by this Agreement are subject to
the registration requirements of the Securities Act has been issued and no
proceeding for that purpose has commenced or is pending or, to the knowledge of
the Company and the Guarantors, is contemplated.
(b) The Preliminary Offering Memorandum as of its date and the
Offering Memorandum as of its date and as of the Closing Date, will not contain
an untrue statement of a material fact or omit to state a material fact
necessary, in order to make the statements, in light of the circumstances under
which they were made, not misleading, except that this representation and
warranty does not apply to statements in or omissions from the Preliminary
Offering Memorandum and the Offering Memorandum made in reliance upon and in
conformity with information relating to the Initial Purchasers furnished to the
Company in writing by or on behalf of the Initial Purchasers expressly for use
therein.
(c) The market-related and customer-related data and estimates
included or incorporated by reference in the Offering Memorandum are based on or
derived from sources which the Company believes to be reliable and accurate.
(d) The Company and each of its subsidiaries (as defined in
Section 14 hereof) have been duly organized and are validly existing as
corporations, limited partnerships or limited liability companies, as
applicable, in good standing under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good standing as
foreign corporations in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires such
qualification except for such qualification and good standing the failure of
which, individually or in the aggregate, would not result in a material adverse
effect on the condition (financial or other), business, prospects, properties,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"), and have all power
and authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged.
(e) 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 (i) approximately 70% of the membership interests in
Aviation Communications & Surveillance Systems, LLC, (ii) approximately 90% of
the capital stock of Electronic Space Systems (UK) Limited, (iii) 99.99% of the
capital stock of ESSCO Xxxxxxx Limited, (iv) approximately 50% of the membership
interests in Arbeitmedizinische Betreungsgesellschaft Xxxxxx Bertriebe mbH, (v)
approximately 98% of the membership interests in Misure Radioelettriche S.r.l.,
(vi) approximately 50% of the membership interests in ITel Solutions, LLC, (vii)
approximately 53.5% of the capital stock of LogiMetrics, Inc., (viii)
approximately 53.5% of the capital stock of Logimetrics FSC, Inc., (ix)
approximately 53.5% of the capital stock of mmTECH, Inc. and (x) 100% of the
issued shares of capital stock or
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membership interests 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 or a subsidiary of the Company, free and clear of all liens,
encumbrances, equities or claims, other than (A) liens, encumbrances, equities
or claims described in the Offering Memorandum or in documents incorporated
therein by reference, (B) a pledge of such shares to secure the Senior Credit
Facilities and (C) such other liens, encumbrances, equities or claims as do not
have a Material Adverse Effect.
(f) The Company has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement, the
Indenture, the Notes, the Guarantees and the Registration Rights Agreement.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors.
(h) The Registration Rights Agreement has been duly authorized
by the Company and each of the Guarantors, and when duly executed by the proper
officers of the Company and the Guarantors (assuming due execution and delivery
by the Initial Purchasers) and delivered by the Company and each Guarantor, will
constitute a valid and binding agreement of the Company and each Guarantor,
enforceable against the Company and each Guarantor in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) or an implied covenant of good faith and fair
dealing and except as rights to indemnity and contribution thereunder may be
limited by Federal or state securities laws or principles of public policy.
(i) The Indenture has been duly and validly authorized by the
Company and each of the Guarantors, and when duly executed by the proper
officers of the Company and each of the Guarantors (assuming due execution and
delivery by the Trustee) and delivered by the Company and each of the
Guarantors, will constitute a valid and binding agreement of the Company and
each of the Guarantors enforceable against the Company and each of the
Guarantors in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) or an
implied covenant of good faith and fair dealing; no qualification of the
Indenture under the Trust Indenture Act of 1939, as amended (the "1939 Act") is
required in connection with the Exempt Resales.
(j) The Series A Notes have been duly and validly authorized
by the Company and when duly executed by the Company in accordance with the
terms of the Indenture and, assuming due authentication of the Series A Notes by
the Trustee, upon delivery to the Initial Purchasers against payment therefor in
accordance with the terms hereof will constitute valid and binding obligations
of the Company entitled to the benefits of the Indenture and enforceable against
the Company in accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law) or
an implied covenant of good faith and fair dealing; and the Series A Notes,
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when issued and delivered, will conform to the description thereof contained in
the Offering Memorandum in all material respects.
(k) The Series A Guarantees have been duly and validly
authorized by the Guarantors and when duly endorsed on the Series A Notes in
accordance with the terms of the Indenture and, assuming due authentication of
the Series A Notes by the Trustee, upon delivery to the Initial Purchasers
against payment therefor in accordance with the terms hereof will constitute
valid and binding obligations of each of the Guarantors entitled to the benefits
of the Indenture and enforceable against in accordance with their terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) or an implied covenant of good faith and fair dealing; and the
Series A Guarantees, when issued and delivered, will conform to the description
thereof contained in the Offering Memorandum in all material respects.
(l) The Series B Notes have been duly and validly authorized
by the Company and if and when duly issued and authenticated in accordance with
the terms of the Indenture and delivered in accordance with the Registered
Exchange Offer provided for in the Registration Rights Agreement, will
constitute valid and binding obligations of the Company entitled to the benefits
of the Indenture, enforceable against the Company in accordance with their
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) or an implied covenant of good faith and fair
dealing.
(m) The guarantees of the Series B Notes (the "Series B
Guarantees" and, together with the Series A Guarantees, the "Guarantees") have
been duly and validly authorized by the Guarantors and if and when duly endorsed
on the Series A Notes in accordance with the terms of the Indenture and
delivered in accordance with the Registered Exchange Offer provided for in the
Registration Rights Agreement, will constitute valid and binding obligations of
each of the Guarantors entitled to the benefits of the Indenture and enforceable
against each of the Guarantors in accordance with their terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) or an implied covenant of good faith and fair dealing.
(n) The execution, delivery and performance of this Agreement
and the other Operative Documents by the Company and the Guarantors and the
consummation of the transactions contemplated hereby or thereby will not
conflict with or constitute a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the properties or assets of the Company
or any of its subsidiaries is subject that is material to the financial
condition or prospects of the Company and its subsidiaries, taken as a whole
(collectively, the "Material Agreements"), except for such breach, violation or
default which, individually, or in the aggregate, would not result in a Material
Adverse Effect, nor will such actions result in any violation of the provisions
of the charter, by-laws or other organizational documents of the Company or any
of its subsidiaries or any material law, statute or any order, rule or
regulation of
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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 considerations; and except as
may be required in connection with the registration under the Securities Act of
the Series B Notes and Series B Guarantees in accordance with the Registration
Rights Agreement, qualification of the Indenture under the 1939 Act and
compliance with the securities or Blue Sky laws of various jurisdictions, 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 any of the Operative Documents by
the Company and the Guarantors, as applicable, and the consummation of the
transactions contemplated hereby and thereby.
(o) Except as described in the Offering Memorandum or in the
documents incorporated therein by reference and except as provided by the
Registration Rights Agreement, there are no contracts, agreements or
understandings between the Company and any person granting such person the right
(other than rights which have been waived or satisfied or rights not exercisable
in connection with the Offering Memorandum) to require the Company to file a
registration statement under the Securities Act with respect to any securities
of the Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the Exchange
Offer Registration Statement or the Shelf Registration Statement; and all such
rights to include such securities in the securities being registered pursuant to
the Exchange Offer Registration Statement or the Shelf Registration Statement
have been waived in a manner consistent with the terms under which they were
granted.
(p) Except as described in the Offering Memorandum or in the
documents incorporated therein by reference, the Company and the Guarantors have
not sold or issued any securities with terms that are substantially similar to
the Notes and the Guarantees during the six-month period preceding the date of
the Offering Memorandum, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act.
(q) Neither the Company nor any of its subsidiaries has
incurred, since the date of the latest audited financial statements included or
incorporated by reference in the Offering Memorandum, any liability or
obligation, direct or contingent, or entered into any transaction, in each case
not in the ordinary course of business, that would result in a Material Adverse
Effect, otherwise than as set forth or contemplated in the Offering Memorandum
or in the documents incorporated therein by reference; and, since such date,
there has not been any material change in the capital stock or material increase
in the short-term or long-term debt of the Company or any of its subsidiaries or
any material adverse change, or any development involving or which would
reasonably be expected to involve a Material Adverse Effect, otherwise than as
described or contemplated in the Offering Memorandum or in the documents
incorporated therein by reference.
(r) The historical and pro forma financial statements,
together with related notes, set forth or incorporated by reference in the
Offering Memorandum comply as to form in all material respects with the
requirements of Regulation S-X under the Securities Act applicable to
registration statements on Form S-3 under the Securities Act. The historical
consolidated financial statements of the Company fairly present the financial
position and the results of operations and cash flows of the entities purported
to be shown thereby, at the dates and for the periods indicated,
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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 Offering Memorandum and this
Agreement. The other financial and statistical information and data included or
incorporated by reference in the Offering Memorandum, historical and pro forma,
have been derived from the financial records of the Company (or its
predecessors) and, in all material respects, have been prepared on a basis
consistent with such books and records of the Company (or its predecessor),
except as disclosed therein.
(s) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company, whose report appears in the Offering
Memorandum or is incorporated by reference therein and who have delivered the
initial letter referred to in Section 7(f) hereof, are independent certified
public accountants as required by the Securities Act and the rules and
regulations promulgated thereunder during the periods covered by the financial
statements on which they reported contained or incorporated by reference in the
Offering Memorandum.
(t) The Company and each of its subsidiaries have good and
marketable title to all property (real and personal) described in the Offering
Memorandum as being owned by them, free and clear of all liens, claims, security
interests or other encumbrances except such as are described in the Offering
Memorandum (or in the documents incorporated therein by reference) or, to the
extent that any such liens, claims, security interests or other encumbrances
would not have a Material Adverse Effect (individually or in the aggregate) and
all the material property described in the Offering Memorandum as being held
under lease by the Company and its subsidiaries is held by them under valid,
subsisting and enforceable leases, with only such exceptions as would not have a
Material Adverse Effect (individually or in the aggregate).
(u) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, trademarks, service marks, trade
names, copyrights, licenses, inventions, trade secrets and other rights, and all
registrations or applications relating thereto, described in the Offering
Memorandum as being owned by them or necessary for the conduct of their
business, except as such would not have a Material Adverse Effect (individually
or in the aggregate), and the Company is not aware of any pending or threatened
claim to the contrary or any pending or threatened challenge by any other person
to the rights of the Company and its subsidiaries with respect to the foregoing
which, if determined adversely to the Company and its subsidiaries, would have a
Material Adverse Effect (individually or in the aggregate).
(v) Except as described in the Offering Memorandum (or in the
documents incorporated therein by reference), 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.
(w) There are no contracts or other documents which would be
required to be described in a prospectus contained in a registration statement
on Form S-3 by the Securities Act or
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by the rules and regulations thereunder which have not been described in the
Offering Memorandum or incorporated therein by reference as permitted by the
rules and regulations.
(x) No material relationship, direct or indirect, exists
between or among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand, except as
described in the Offering Memorandum or in the documents incorporated therein by
reference.
(y) 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.
(z) Except as disclosed in the Offering Memorandum or in the
documents incorporated therein by reference, the Company is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) subject to Title IV of ERISA for which the Company would have any
material liability; the Company has not incurred and does not expect to incur
any material liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any such "pension plan" or (ii) Sections 412 or 4971 of
the Internal Revenue 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.
(aa) 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.
(bb) 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.
(cc) 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
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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.
(dd) 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.
(ee) Neither the Company nor any subsidiary is, and upon the
sale of the Series A Notes to be issued and sold thereby in accordance herewith
and the application of the net proceeds to the Company of such sale as described
in the Offering Memorandum under the caption "Use of Proceeds," will not be, 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.
(ff) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D ("Regulation D") under the Securities Act) of the Company
has directly, or through any agent (provided that no representation is made as
to the Initial Purchasers or any person acting on its behalf), (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or could be integrated with
the offering and sale of the Notes in a manner that would require the
registration of the Series A Notes under the Securities Act or (ii) engaged in
any form of general solicitation or general advertising (within the meaning of
Regulation D, including, but not limited to, advertisements, articles, notices
or other communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising) in
connection with the offering of the Series A Notes.
(gg) Except as permitted by the Securities Act, the Company
has not distributed and, prior to the later to occur of the Closing Date and
completion of the distribution of the Series A Notes, will not distribute any
offering material in connection with the offering and sale of the Series A Notes
other than the Preliminary Offering Memorandum and the Offering Memorandum.
10
(hh) When the Series A Notes are issued and delivered pursuant
to this Agreement, such Series A Notes will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities of the Company that
are listed on a national securities exchange registered under Section 6 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or that are
quoted in a U.S. automated inter-dealer quotation system.
(ii) Assuming (i) that your representations and warranties in
Section 2 are true, (ii) compliance by you with your covenants set forth in
Section 2 and (iii) that each of the Eligible Purchasers is a QIB or a person
who is not a "U.S. person" who acquires the Series A Notes outside the United
States in an "offshore transaction" (within the meaning of Rule 904 of
Regulation S), the purchase of the Series A Notes by you pursuant hereto and the
resale of the Series A Notes pursuant hereto pursuant to the Exempt Resales is
exempt from the registration requirements of the Securities Act.
(jj) None of the Company or any of its affiliates or any
person acting on its or their behalf has engaged or will engage in any directed
selling efforts within the meaning of Regulation S with respect to the Notes,
and the Company and its affiliates and all persons acting on its of their behalf
have complied with and will comply with the offering restrictions requirements
of Regulation S in connection with the offering of the Notes outside of the
United States. The sales of the Series A Notes pursuant to Regulation S are
"offshore transactions" and are not part of a plan or scheme to evade the
registration provision of the Securities Act. The Company makes no
representation in this paragraph (jj) with respect to the Initial Purchasers.
(kk) The Company is a "reporting issuer" as defined in Rule
902 under the Securities Act.
2. Representations, Warranties and Agreements of the Initial
Purchasers. Each Initial Purchaser represents and warrants with respect to
itself that:
(a) Such Initial Purchaser is a QIB under the Securities Act
(each, an "Accredited Institution"), in either case with such knowledge and
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Series A Notes.
(b) Such Initial Purchaser (i) is not acquiring the Series A
Notes with a view to any distribution thereof or with any present intention of
offering or selling any of the Series A Notes, in each case in a transaction
that would violate the Securities Act or the securities laws of any State of the
United States or any other applicable jurisdiction; (ii) in connection with the
Exempt Resales, will solicit offers to buy the Series A Notes only from, and
will offer to sell the Series A Notes only to, the Eligible Purchasers in
accordance with this Agreement and on the terms contemplated by the Offering
Memorandum; and (iii) will not offer or sell the Series A Notes, nor has it
offered or sold the Series A Notes by, or otherwise engaged in, any form of
general solicitation or general advertising (within the meaning of Regulation D;
including, but not limited to, advertisements, articles, notices or other
communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising) in
connection with the offering of the Series A Notes.
11
(c) The Series A Notes have not been and will not be
registered under the Securities Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act. The Initial
Purchasers represent that they have not offered, sold or delivered the Series A
Notes, and will not offer, sell or deliver the Series A Notes (i) as part of its
distribution at any time or (ii) otherwise until 40 days after the later of the
commencement of the offering of the Series A Notes and the Closing Date (such
period, the "Restricted Period"), within the United States or to, or for the
account or benefit of U.S. persons, except in accordance with Rule 144A under
the Securities Act or in transactions that are exempt from the registration
requirements of the Securities Act. Accordingly, each Initial Purchaser
represents and agrees that neither it, nor any of its affiliates nor any persons
acting on its or their behalf has engaged or will engage in any directed selling
efforts within the meaning of Rule 901(b) of Regulation S with respect to the
Series A Notes, and it, its affiliates and all persons acting on its behalf have
complied and will comply with the offering restrictions requirements of
Regulation S.
(d) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Series A Notes (other than a sale pursuant to Rule
144A in transactions that are exempt from the registration requirements of the
Securities Act), it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases Series
A Notes from it during the Restricted Period a confirmation or notice
substantially to the following effect:
"The Notes covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not
be offered and sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering or the closing
date, except in either case in accordance with Regulation S
(or Rule 144A if available) under the Securities Act. Terms
used above have the meanings assigned to them in Regulation
S."
Such Initial Purchaser further agrees that it has not entered
and will not enter into any contractual arrangement with respect to the
distribution or delivery of the Series A Notes, except with its affiliates or
with the prior written consent of the Company.
(e) Each Initial Purchaser hereby represents and warrants to,
and agrees with, the company that (i) it and each of its affiliates have not
offered or sold and will not offer or sell any Notes to persons in the United
Kingdom prior to the expiration of the period of six months from the Closing
Date, except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
and each of its affiliates have only communicated or caused to be communicated
and will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of Section 21 of
the Financial Services and Markets Act 2000 (the "FSMA") received by it in
connection with the issue or sale of any Notes in circumstances in which Section
21(1) of the FSMA does not apply to the Company; and (iii) it and each of its
affiliates have
12
complied and will comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to the Notes in, from or otherwise involving
the United Kingdom.
(f) Such Initial Purchaser agrees not to cause any
advertisement of the Series A Notes to be published in any newspaper or
periodical or posted in any public place and not to issue any circular relating
to the Series A Notes, except such advertisements as include the statements
required by Regulation S.
(g) The sales of the Series A Notes pursuant to Regulation S
are "offshore transactions" and are not part of a plan or scheme to evade the
registration provisions of the Securities Act.
(h) Such Initial Purchaser understands that the Company and,
for purposes of the opinions to be delivered to you pursuant to Section 7
hereof, counsel to the Company, General Counsel to the Company and counsel to
the Initial Purchasers, will rely upon the accuracy and truth of the foregoing
representations and you hereby consent to such reliance.
The terms used in this Section 2 that have meanings assigned
to them in Regulation S are used herein as so defined.
Each Initial Purchaser further agrees that, in connection with
the Exempt Resales, it will solicit offers to buy the Series A Notes only from,
and will offer to sell the Series A Notes only to, the Eligible Purchasers in
Exempt Resales.
3. Purchase of the Notes and the Guarantees by the Initial
Purchasers. 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 the Series A Notes (and cause the Guarantors to issue the Series A
Guarantees) to the several Initial Purchasers and each of the Initial
Purchasers, severally and not jointly, agrees to purchase the aggregate
principal amount of Series A Notes set opposite that Initial Purchaser's name in
Schedule 1 hereto. Each Initial Purchaser will purchase such aggregate principal
amount of Series A Notes at an aggregate purchase price equal to 97.708% of the
principal amount thereof (the "Purchase Price").
The Company shall not be obligated to deliver any of the
Series A Notes and the Series A Guarantees to be delivered on the Closing Date
(as defined herein), except upon payment for all the Series A Notes to be
purchased on the Closing Date as provided herein.
4. Delivery of and Payment for the Notes and the Guarantees.
(a) Delivery of and payment for the Series A Notes and the
Series A Guarantees 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
Closing Date. The place of closing for the Series A Notes and the Closing Date
may be varied by agreement between the Initial Purchasers and the Company.
(b) On the Closing Date, one or more Series A Notes in
definitive form, registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"), or such other names as the Initial Purchasers
may request upon at least one business days' notice to the
13
Company, having an aggregate principal amount corresponding to the aggregate
principal amount of Series A Note sold pursuant to Eligible Resales
(collectively, the "Global Note"), shall be delivered by the Company to the
Initial Purchasers against payment by the Initial Purchasers of the purchase
price thereof by wire transfer of immediately available funds as the Company may
direct by written notice delivered to you two business days prior to the Closing
Date. The Global Note in definitive form shall be made available to you for
inspection not later than 2:00 p.m. on the business day prior to the Closing
Date.
(c) 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 Initial Purchaser hereunder.
5. Further Agreements of the Company. The Company agrees:
(a) To advise you promptly and, if requested by you, to
confirm such advice in writing, of (i) the issuance by any state securities
commission of any stop order suspending the qualification or exemption from
qualification of any Series A Notes or Series A Guarantees for offering or sale
in any jurisdiction, or the initiation or threatening of any proceeding for such
purpose by the Commission or any state securities commission or other regulatory
authority, and (ii) the happening of any event that makes any statement of a
material fact made in the Offering Memorandum untrue or which requires the
making of any additions to or changes in the Offering Memorandum in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The Company shall use all commercially reasonable efforts
to prevent the issuance of any stop order or order suspending the qualification
or exemption of the Series A Notes or Series A Guarantees under any state
securities or Blue Sky laws and, if at any time any state securities commission
shall issue any stop order suspending the qualification or exemption of the
Series A Notes or Series A Guarantees under any state securities or Blue Sky
laws, the Company shall use every reasonable effort to obtain the withdrawal or
lifting of such order at the earliest possible time.
(b) To furnish to you, as many copies of the Offering
Memorandum, and any amendments or supplements thereto, as you may reasonably
request. Such copies shall be furnished without charge for use in connection
with the Exempt Resales for the nine-month period immediately following the
Closing Date. The Company consents to the use of the Offering Memorandum, and
any amendments and supplements thereto required pursuant to this Agreement, by
you in connection with the Exempt Resales that are in compliance with this
Agreement.
(c) Not to amend or supplement the Offering Memorandum prior
to the Closing Date or during the period referred to in (d) below unless you
shall previously have been advised of, and shall not have reasonably objected
to, such amendment or supplement within a reasonable time, but in any event not
longer than five days after being furnished a copy of such amendment or
supplement. The Company shall promptly prepare, upon any reasonable request by
you, any amendment or supplement to the Offering Memorandum that may be
necessary or advisable in connection with Exempt Resales.
(d) If, in connection with any Exempt Resales or market making
transactions after the date of this Agreement and prior to the consummation of
the Registered Exchange Offer,
14
any event shall occur that, in the judgment of the Company or in the judgment of
counsel to you, makes any statement of a material fact in the Offering
Memorandum untrue or that requires the making of any additions to or changes in
the Offering Memorandum in order to make the statements in the Offering
Memorandum, in light of the circumstances under which they were made at the time
that the Offering Memorandum is delivered to prospective Eligible Purchasers,
not misleading, or if it is necessary to amend or supplement the Offering
Memorandum to comply with applicable law, the Company shall promptly notify you
of such event and prepare an appropriate amendment or supplement to the Offering
Memorandum so that (i) the statements in the Offering Memorandum as amended or
supplemented will, in light of the circumstances under which they were made at
the time that the Offering Memorandum is delivered to prospective Eligible
Purchasers, not be misleading and (ii) the Offering Memorandum will comply with
applicable law.
(e) Promptly from time to time to take such action as the
Initial Purchasers may reasonably request to qualify the Series A Notes and the
Series A Guarantees for offering and sale under the securities laws of such
jurisdictions as the Initial Purchasers 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 Series A Notes and the
Series A Guarantees.
(f) Prior to the Closing Date, to furnish to you, as soon as
they have been prepared, a copy of any internal consolidated financial
statements of the Company for any period subsequent to the period covered by the
financial statements appearing in the Offering Memorandum.
(g) To use all commercially reasonable efforts to do and
perform all things required to be done and performed under this Agreement by it
prior to or after the Closing Date and to satisfy all conditions precedent on
its part to the delivery of the Series A Notes and the Series A Guarantees.
(h) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Securities
Act) that would be integrated with the sale of the Series A Notes in a manner
that would require the registration under the Securities Act of the sale to you
or the Eligible Purchasers of Series A Notes.
(i) During any period in which the Company is not subject to
Section 13 or 15(d) of the Exchange Act within the two-year period following the
Closing Date, to make available to any registered holder or beneficial owner of
Series A Notes in connection with any sale thereof and any prospective purchaser
of such Series A Notes from such registered holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act.
(j) To use all commercially reasonable efforts to effect the
inclusion of the Notes in the National Association of Securities Dealers, Inc.
Automated Quotation System - PORTAL ("PORTAL").
15
(k) To apply the net proceeds from the sale of the Series A
Notes being sold by the Company as set forth in the Offering Memorandum under
the caption "Use of Proceeds."
(l) 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.
(m) To take such steps as shall be necessary to ensure that
all the subsidiaries of the Company that are not designated as "unrestricted
subsidiaries" or "foreign subsidiaries" in accordance with the Indenture will be
guarantors of the Notes.
(n) For a period of 90 days from the date of the Offering
Memorandum, not to, directly or indirectly, sell, offer to sell, contract to
sell, grant any option to purchase, issue any instrument convertible into or
exchangeable for, or otherwise transfer or dispose of (or enter into any
transaction or device which is designed to, or could be expected to, result in
the disposition in the future of), any debt securities of the Company or any of
its subsidiaries, except (i) for the Series B Notes in connection with the
Registered Exchange Offer or (ii) with the prior consent of Xxxxxx Brothers Inc.
6. Expenses. The Company agrees to pay: (a) the costs incident
to the authorization, issuance, sale and delivery of the Notes and the
Guarantees and any taxes payable in that connection; (b) the costs incident to
the preparation, printing and filing of the Offering Memorandum and any
amendments and supplements thereto; (c) the costs of distributing the Offering
Memorandum and any amendment or supplement to the Offering Memorandum, all as
provided in this Agreement; (d) the fees, disbursements and expenses of the
Company's counsel and accountants; (e) all expenses and listing fees in
connection with the application for quotation of the Series A Notes in PORTAL;
(f) all fees and expenses (including fees and expenses of counsel) of the
Company in connection with approval of the Notes by DTC for "book-entry"
transfer; (g) the fees and expenses of qualifying the Notes and Guarantees under
the securities laws of the several jurisdictions as provided in Section 5(e) and
of preparing, printing and distributing a Blue Sky Memorandum (including related
fees and expenses of counsel to the Initial Purchasers); (h) any fees charged by
securities rating services for rating the Notes and Guarantees; (i) all costs
and expenses incident to the performance of the Company's obligations under
Section 9; and (j) all other costs and expenses incident to the performance of
the obligations of the Company and the Guarantors.
7. Conditions of Initial Purchasers' Obligations. The
respective obligations of the Initial Purchasers hereunder are subject to the
accuracy, when made and on the Closing Date, of the representations and
warranties of the Company and the Guarantors contained herein, to the
performance by the Company and the Guarantors of their obligations hereunder,
and to each of the following additional terms and conditions:
(a) No Initial Purchaser shall have discovered and disclosed
to the Company on or prior to the Closing Date that the Offering Memorandum or
any amendment or supplement thereto contains an untrue statement of a fact
which, in the opinion of Xxxxxx & Xxxxxxx, counsel for the Initial Purchasers,
is material or omits to state a fact which, in the opinion of such counsel, is
16
material and is necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the other Operative
Documents, the Offering Memorandum, 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 Initial Purchasers, and
the Company shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters.
(c) Xxxxxxx Xxxxxxx & Xxxxxxxx shall have furnished to the
Initial Purchasers, its written opinion, as counsel to the Company, addressed to
the Initial Purchasers and dated the Closing Date, in the form attached hereto
as Exhibit A.
(d) Xxxxxxxxxxx X. Xxxxxxx, General Counsel of the Company,
shall have furnished to the Initial Purchasers his written opinion, as General
Counsel to the Company, addressed to the Initial Purchasers and dated the
Closing Date, in the form attached hereto as Exhibit B.
(e) The Initial Purchasers shall have received from Xxxxxx &
Xxxxxxx, counsel for the Initial Purchasers, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Series A Notes, the
Series A Guarantees, the Offering Memorandum and other related matters as the
Initial Purchasers may reasonably require, and the Company shall have furnished
to such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the Initial
Purchasers shall have received from PricewaterhouseCoopers LLP, a letter, in
accordance with professional standards established by the AICPA and in form and
substance satisfactory to the Initial Purchasers, addressed to the Initial
Purchasers (i) confirming that they are independent public accountants under
Rule 101 of the AICPA's Code of Professional Conduct, and its interpretation and
rulings and (ii) stating, as of the date hereof (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Offering Memorandum, as of a
date not more than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information and other
matters ordinarily covered by accountants' "comfort letters" to Initial
Purchasers in connection with registered public offerings.
(g) With respect to the letter of PricewaterhouseCoopers LLP
referred to in the preceding paragraph and delivered to the Initial Purchasers
concurrently with the execution of this Agreement (the "initial letter"), the
Company shall have furnished to the Initial Purchasers a letter (the "bring-down
letter") of such accountants in accordance with professional standards
established by the AICPA, addressed to the Initial Purchasers and dated the
Closing Date (i) confirming that they are independent public accountants under
Rule 101 of the AICPA's Code of Professional Conduct, and its interpretation and
rulings and (ii) stating, as of the date of the bring-down letter (or, with
respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Offering Memorandum,
as of a date not more than five days prior to the date of the bring-down
letter), the conclusions and findings of such firm with
17
respect to the financial information and other matters covered by the initial
letter and (iii) confirming in all material respects the conclusions and
findings set forth in the initial letter.
(h) The Company shall have furnished to the Initial Purchasers
a certificate, dated the Closing Date, of its Senior Vice President-Finance
stating that:
(i) The unaudited financial information included in
the column "Acquisitions Historical" in the Offering
Memorandum are derived from the accounting records or
supporting schedules of each such acquired entity and/or the
Company and, to such officer's knowledge, was prepared in
accordance with accounting principles generally accepted in
the United States of America; and
(ii) The adjustments to EBITDA described in footnote
1 on the Summary Financial Data table contained in the
Offering Memorandum are reasonable and, in such officer's
opinion or belief, there are no other unusual or
non-recurring items affecting the income statement in any of
the periods presented that had the effect of increasing
EBITDA during any of the periods presented.
(i) The Company and the Guarantors shall have furnished to the
Initial Purchasers a certificate, dated the Closing Date, of their respective
Chairman of the Board, their respective President or a Vice President and their
respective chief financial officer stating that:
(i) The representations and warranties of the Company
and the Guarantors in Section 1 are true and correct as of the
Closing Date; the Company and the Guarantors have complied
with all their agreements contained herein; and the conditions
set forth in Sections 7(j) and 7(k) have been fulfilled; and
(ii) They have carefully examined the Offering
Memorandum and, in their opinion (A) the Offering Memorandum
as of its date and as of the Closing Date, did not include any
untrue statement of a material fact and did not omit to state
a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (B) since the
date of the Offering Memorandum, no event has occurred which
should have been set forth in a supplement or amendment to the
Offering Memorandum.
(j) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Offering Memorandum 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 Offering Memorandum (or in the documents incorporated
therein by reference) 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 Offering Memorandum
(or in the documents incorporated therein by reference), the effect of which,
18
in any such case described in clause (i) or (ii), is, in the judgment of the
Initial Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Notes and
the Guarantees being delivered on the Closing Date on the terms and in the
manner contemplated in the Offering Memorandum.
(k) 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) under the
Securities Act 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.
(l) 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, the American Stock Exchange, the
NASDAQ National Market or the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter market
shall have been suspended or the settlement of such trading generally shall have
been materially disrupted or minimum prices shall have been established on any
such exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United 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, including without limitation as a result of
terrorist activities after the date hereof, or the effect of international
conditions on the financial markets in the United States shall be such, as to
make it in the case of (iii) or (iv), in the sole judgment of a majority in
interest of the several Initial Purchasers, impracticable or inadvisable to
proceed with the public offering or delivery of the Notes being delivered on the
Closing Date on the terms and in the manner contemplated in the Offering
Memorandum.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
8. Indemnification and Contribution.
(a) The Company and the Guarantors shall jointly and severally
indemnify and hold harmless each Initial Purchaser, its officers and employees
and each person, if any, who controls any Initial Purchaser within the meaning
of the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases and sales
of Notes and Guarantees), to which that Initial Purchaser, officer, employee or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in the Offering Memorandum or in any amendment or supplement
thereto or (B) in any blue sky application or other document prepared or
executed by the Company (or based upon any written information furnished by the
Company) specifically for the purpose of qualifying any or
19
all of the Series A Notes under the securities laws of any state or other
jurisdiction (any such application, document or information being hereinafter
called a "Blue Sky Application"), (ii) the omission or alleged omission to state
in the Offering Memorandum, or in any amendment or supplement thereto, or in any
Blue Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any act or
failure to act or any alleged act or failure to act by any Initial Purchaser in
connection with, or relating in any manner to, the Notes or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company and the
Guarantors shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Initial Purchaser
through its gross negligence or willful misconduct), and shall reimburse each
Initial Purchaser and each such officer, employee or controlling person promptly
upon demand for any legal or other expenses reasonably incurred by that Initial
Purchaser, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company and the Guarantors shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Offering Memorandum, or in any such amendment or
supplement, or in any Blue Sky Application, in reliance upon and in conformity
with written information concerning such Initial Purchaser furnished to the
Company by or on behalf of any Initial Purchaser specifically for inclusion
therein. The foregoing indemnity agreement is in addition to any liability which
the Company and the Guarantors may otherwise have to any Initial Purchaser or to
any officer, employee or controlling person of that Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company, the Guarantors, their officers and
employees, each of their directors, and each person, if any, who controls the
Company and the Guarantors within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company, the Guarantors or any such director,
officer or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in the Offering Memorandum or in any amendment or
supplement thereto, or (B) in any Blue Sky Application or (ii) the omission or
alleged omission to state in the Offering Memorandum, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Initial Purchaser furnished
to the Company by or on behalf of that Initial Purchaser specifically for
inclusion therein, and shall reimburse the Company, the Guarantors and any such
director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company, such Guarantor or any such director, officer
or controlling person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which any Initial Purchaser may otherwise have to the Company, the
Guarantors or any such director, officer, employee or controlling person.
20
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of 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 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 8 consist of any
Initial Purchaser or any of their respective officers, employees or controlling
persons, or by the Company, if the indemnified parties under this Section
consist of the Company, the Guarantors or any of the Company's or the
Guarantors' directors, officers, employees or controlling persons. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
21
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Guarantors on the one hand and the Initial
Purchasers on the other from the offering of the Series A Notes and the Series A
Guarantees or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Guarantors on the one hand and the Initial
Purchasers on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Guarantors on the one hand and the Initial
Purchasers on the other with respect to such offering shall be deemed to be in
the same proportion as the total net proceeds from the offering of the Series A
Notes purchased under this Agreement (before deducting expenses) received by the
Company and the Guarantors, on the one hand, and the total discounts and
commissions received by the Initial Purchasers with respect to the Series A
Notes and the Series A Guarantees purchased under this Agreement, on the other
hand, bear to the total gross proceeds from the offering of the Series A Notes
under this Agreement, in each case as set forth in the table on the cover page
of the Offering Memorandum. The relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company, the Guarantors or the Initial Purchasers, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, the Guarantors and the
Initial Purchasers agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be deemed to
include, for purposes of this Section 8(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8(d), no Initial Purchaser shall be required to contribute any amount in
excess of the amount by which the total price at which the Series A Notes
purchased by it was resold to Eligible Purchasers exceeds the amount of any
damages which such Initial Purchaser has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute as provided in this Section 8(d) are
several in proportion to their respective underwriting obligations and not
joint.
(e) The Initial Purchasers severally confirm and the Company
and the Guarantors acknowledge that the last paragraph on the cover page, the
stabilization legend on page ii and the last paragraph and the third to last
paragraph under the caption "Plan of Distribution" constitute the only
information concerning such Initial Purchasers furnished in writing to the
22
Company by or on behalf of the Initial Purchasers specifically for inclusion in
the Offering Memorandum.
9. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by Xxxxxx Brothers Inc. by notice given to and
received by the Company prior to delivery of and payment for the Series A Notes
and the Series A Guarantees if, prior to that time, any of the events described
in Sections 7(j), 7(k) or 7(l), shall have occurred or if the Initial Purchasers
shall decline to purchase the Series A Notes for any reason permitted under this
Agreement.
10. Reimbursement of Initial Purchasers' Expenses. If the
Company and the Guarantors shall fail to tender the Series A Notes and the
Series A Guarantees for delivery to the Initial Purchasers by reason of any
failure, refusal or inability on the part of the Company and the Guarantors to
perform any agreement on its part to be performed, or because any other
condition of the Initial Purchasers' obligations hereunder required to be
fulfilled by the Company and the Guarantors is not fulfilled, the Company and
the Guarantors will reimburse the Initial Purchasers for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Initial Purchasers in connection with this Agreement and the proposed
purchase of the Series A Notes and the Series A Guarantees, and upon demand the
Company and the Guarantors shall pay the full amount thereof to the Initial
Purchasers.
11. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail, telex or facsimile transmission to (i) Xxxxxx Brothers Inc., 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department (Fax:
000-000-0000), (ii) Banc of America Securities LLC, 0 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxx (Fax 000-000-0000) and (iii)
Credit Suisse First Boston Corporation, 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Transaction Advisory Group with a copy to Xxxxxx & Xxxxxxx,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxxxxxx (Fax:
000-000-0000) and, in the case of any notice pursuant to Section 8, to the
Director of Litigation, Office of the General Counsel, Xxxxxx Brothers Inc., 000
Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000; and
(b) if to the Company and the Guarantors, shall be delivered
or sent by mail, telex or facsimile transmission to L-3 Communications
Corporation, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxxxxxx X. Xxxxxxx (Fax: 000-000-0000), with a copy to Xxxxxxx Xxxxxxx &
Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx
Xxxxxx, Xx. (Fax: (000) 000-0000).
Any such statements, requests, notices or agreements shall
take effect at the time of receipt thereof. The Company shall be entitled to act
and rely upon any request, consent, notice or agreement given or made on behalf
of the Initial Purchasers by Xxxxxx Brothers Inc.
23
12. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers, the
Company, the Guarantors and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company and the Guarantors contained in this Agreement shall also be deemed
to be for the benefit of the person or persons, if any, who control any Initial
Purchaser within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Initial Purchasers contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of directors of the Company and
the Guarantors and any person controlling the Company and the Guarantors 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 12, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein..
13. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Guarantors and the Initial
Purchasers contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Notes and the Guarantees 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.
14. Definition of the Terms "Business Day" and "Subsidiary."
For purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the rules
and regulations of the Commission under the Securities Act.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
16. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
[Signature pages follow]
24
If the foregoing correctly sets forth the agreement among the
Company, the Guarantors and the Initial Purchasers, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
L-3 COMMUNICATIONS CORPORATION,
as the Company
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President -Finance
AMI INSTRUMENTS, INC.
APCOM, INC.
CELERITY SYSTEMS INCORPORATED
XXXXXXX RESEARCH CORPORATION
EER SYSTEMS, INC.
ELECTRODYNAMICS, INC.
XXXXXXXX, INC.
HYGIENETICS ENVIRONMENTAL SERVICES, INC.
INTERSTATE ELECTRONICS CORPORATION
KDI PRECISION PRODUCTS, INC.
L-3 COMMUNICATIONS AIS GP CORPORATION
L-3 COMMUNICATIONS ANALYTICS CORPORATION
L-3 COMMUNICATIONS ATLANTIC SCIENCE & TECHNOLOGY CORPORATION L-3 COMMUNICATIONS
AYDIN CORPORATION L-3 COMMUNICATIONS ESSCO, INC.
L-3 COMMUNICATIONS ILEX SYSTEMS, INC.
L-3 COMMUNICATIONS INVESTMENTS, INC.
L-3 COMMUNICATIONS SPD TECHNOLOGIES, INC.
L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC.
MICRODYNE COMMUNICATIONS TECHNOLOGY INCORPORATED
MICRODYNE CORPORATION
MICRODYNE OUTSOURCING INCORPORATED
MPRI, INC.
PAC ORD, INC.
POWER PARAGON, INC.
SOUTHERN CALIFORNIA MICROWAVE, INC.
SPD ELECTRICAL SYSTEMS, INC.
SPD HOLDINGS, INC.
SPD SWITCHGEAR, INC.
as Guarantors
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President and Secretary and
General Counsel
L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P.
By: L-3 COMMUNICATIONS AIS GP CORPORATION,
as general partner
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Authorized Person
Accepted:
XXXXXX BROTHERS INC.
BANK OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON CORPORATION
For themselves and as Representatives
of the several Initial Purchasers named
in Schedule 1 hereto
By: XXXXXX BROTHERS INC.
By: /s/Xxxxx Xxxxx
-------------------------------------
Authorized Representative
SCHEDULE 1
Principal
Initial Purchaser: Amount of Notes
------------------ --------------------
Xxxxxx Brothers Inc........................................ $338,182,000
Bank of America Securities LLC............................. $169,091,000
Credit Suisse First Boston Corporation.................... $169,091,000
Wachovia Securities, Inc. ................................. $ 12,273,000
XX Xxxxx Securities Corporation............................ $ 12,273,000
BNY Capital Markets, Inc. ................................. $ 9,818,000
Barclays Capital Inc. ..................................... $ 9,818,000
Credit Lyonnais Securities (USA) Inc. ..................... $ 9,818,000
Fleet Securities, Inc. .................................... $ 9,818,000
Scotia Capital (USA) Inc................................... $ 9,818,000
--------------------
Total $750,000,000
====================
I-1
EXHIBIT A
OPINION OF XXXXXXX XXXXXXX & XXXXXXXX
Xxxx 28, 2002
XXXXXX BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON CORPORATION
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel to L-3 Communications Corporation, a
Delaware corporation (the "Company"), in connection with the purchase by you of
$750,000,000 aggregate principal amount of its 7 5/8% Senior Subordinated Notes
due 2012 (the "Notes") of the Company and the related guarantees (the
"Guarantees") by the Delaware subsidiaries of the Company named on Schedule I
attached hereto (each, a "Delaware Guarantor" and collectively, the "Delaware
Guarantors") and the non-Delaware subsidiaries of the Company named on Schedule
II attached hereto (each, a "Non-Delaware Guarantor" and collectively, the
"Non-Delaware Guarantors," taken together with the Delaware Guarantors, the
"Subsidiary Guarantors"), pursuant to the Purchase Agreement dated June 25, 2002
(the "Purchase Agreement"), among Xxxxxx Brothers Inc., Banc of America
Securities LLC and Credit Suisse First Boston Corporation, as initial purchasers
(the "Initial Purchasers"), the Company and the Subsidiary Guarantors.
I-1
We have examined the Offering Memorandum dated June 25, 2002,
relating to the sale of the Notes (the "Offering Memorandum"), which
incorporates or is deemed to incorporate by reference the Annual Report on Form
10-K of L-3 Communications Holdings, Inc. ("Holdings") and the Company for the
fiscal year ended December 31, 2001, as amended by the Annual Report on Form
10-K/A-1 dated June 19, 2002, the Quarterly Report on Form 10-Q of Holdings and
the Company for the fiscal quarter ended March 31, 2002 and Holdings' and the
Company's Current Reports on Form 8-K filed March 22, 2002, April 24, 2002, June
6, 2002 and June 19, 2002 (the "Exchange Act Documents"), each as filed under
the Securities Exchange Act of 1934; the Indenture dated as of June 28, 2002
(the "Indenture") among the Company, the Subsidiary Guarantors and The Bank of
New York, as trustee (the "Trustee"); the Notes; the guarantees indorsed on or
annexed to the Notes (the "Guarantees"); the Purchase Agreement; and the
Registration Rights Agreement dated as of June 25, 2002 (the "Registration
Rights Agreement") among the Company, the Subsidiary Guarantors and the Initial
Purchasers pursuant to which the Company's Series B 7 5/8% Senior Subordinated
Notes due 2012 (the "Series B Notes") will be registered under the Securities
Act of 1933, as amended (the "Securities Act"). The Series B Notes will be
guaranteed by each of the Subsidiary Guarantors (the "Series B Guarantees"). In
addition, we have examined, and have relied as to matters of fact upon, the
documents delivered to you at the closing and upon originals or duplicates or
certified or conformed copies, of such corporate records, agreements, documents
and other instruments and such certificates or comparable documents of public
officials and of officers and representatives of the Company and the Subsidiary
Guarantors, and have made such other investigations, as we have deemed relevant
and necessary in connection with the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as duplicates or certified or conformed copies,
and the authenticity of the originals of such latter documents.
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion that:
1. Each of the Company and the Delaware Guarantors
(other than L-3 Communications Integrated Systems LP (the
"LP")) has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware, and
has all corporate power and authority necessary to conduct its
respective businesses as described in the Offering Memorandum.
2. The LP has been duly formed and is validly
existing as a limited partnership in good standing under the
laws of Delaware, and has all limited partnership power and
authority necessary to conduct its business as described in
the Offering Memorandum.
3. All of the outstanding shares of Common Stock of
the Company have been duly authorized and have been validly
issued, fully paid and non-assessable; and all of the issued
shares of capital stock of each of the Delaware Guarantors
(other than the LP) have been duly and validly authorized and
issued, are fully paid and non-assessable
and, based solely on an examination of each such
subsidiary's stock ledger and minute book, all such shares
are held of record by the Company or one of its
subsidiaries.
4. The Indenture has been duly authorized, executed
and delivered by the Company and the Delaware Guarantors and,
assuming that the Indenture is the valid and legally binding
obligation of the Trustee, constitutes a valid and legally
binding obligation of the Company and the Delaware Guarantors
enforceable against the Company and the Delaware Guarantors in
accordance with its terms.
5. Assuming that the Indenture has been duly
authorized, executed and delivered by the Non-Delaware
Guarantors and assuming that the Indenture is the valid and
legally binding obligation of the Trustee, the Indenture
constitutes a valid and legally binding obligation of the
Non-Delaware Guarantors enforceable against the Non-Delaware
Guarantors in accordance with its terms.
6. The Notes have been duly authorized, executed and
issued by the Company and, assuming due authentication thereof
by the Trustee and upon payment and delivery in accordance
with the terms of the Purchase Agreement, will constitute
valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms
and entitled to the benefits of the Indenture.
7. The Guarantees have been duly authorized, executed
and issued by each of the Delaware Guarantors and, assuming
due authentication of the Notes by the Trustee, upon payment
and delivery of the Notes in accordance with the terms of the
Purchase Agreement, will constitute valid and legally binding
obligations of the Delaware Guarantors enforceable against the
Delaware Guarantors in accordance with their terms.
8. Assuming that the Guarantees have been duly
authorized, executed and issued by each of the Non-Delaware
Guarantors and, assuming due authentication of the Notes by
the Trustee, upon payment and delivery of the Notes in
accordance with the terms of the Purchase Agreement, the
Guarantees will constitute valid and legally binding
obligations of the Non-Delaware Guarantors enforceable against
the Non-Delaware Guarantors in accordance with their terms.
9. The Series B Notes have been duly authorized by
the Company, and the Series B Guarantees have been duly
authorized by the Delaware Guarantors.
10. The statements contained in the Offering
Memorandum under the captions "Business--Pension Plans,"
"Description of Other Indebtedness," and "Description of the
Notes," insofar as they describe charter documents, contracts,
statutes, rules and regulations and other legal matters,
constitute an accurate summary thereof in all material
respects.
11. The statements made in the Offering Memorandum
under the caption "Certain United States Federal Income Tax
Considerations," insofar as they purport to
constitute summaries of matters of United States federal tax
law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters
described therein in all material respects.
12. To our 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 a
prospectus included in a registration statement on Form S-3
which are not described in the Offering Memorandum or in
documents incorporated therein by reference.
13. The Purchase Agreement has been duly authorized,
executed and delivered by the Company and the Delaware
Guarantors.
14. The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and the
Delaware Guarantors and, assuming that the Registration Rights
Agreement is the valid and legally binding obligation of the
Initial Purchasers, constitutes a valid and legally binding
obligation of the Company and the Delaware Guarantors,
enforceable against the Company and the Delaware Guarantors in
accordance with its terms.
15. Assuming that the Registration Rights Agreement
has been duly authorized, executed and delivered by the
Non-Delaware Guarantors and, assuming that the Registration
Rights Agreement is the valid and legally binding obligation
of the Initial Purchasers, the Registration Rights Agreement
constitutes a valid and legally binding obligation of the
Non-Delaware Guarantors enforceable against the Non-Delaware
Guarantors in accordance with its terms.
16. The issue and sale of the Notes by the Company
and the Guarantees by the Subsidiary Guarantors and the
compliance by the Company or the Subsidiary Guarantors, as
applicable, with all of the provisions of the Purchase
Agreement, the Indenture, the Notes, the Guarantees and the
Registration Rights Agreement 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 Company's Registration Statement on Form S-3
(Registration No. 333-84826), nor will such actions violate
the Certificate of Incorporation or By-Laws of the Company or
the Delaware Guarantors (or, in the case of the LP, the
Limited Partnership Agreement dated February 22, 2002, between
L-3 Communications Investments Inc. and L-3 Communications AIS
GP Corporation) or any federal or New York statute or the
Delaware General Corporation Law or the Delaware Revised
Uniform Limited Partnership Act or any rule or regulation that
has been issued pursuant to any federal or New York statute or
the Delaware General Corporation Law or the Delaware Revised
Uniform Limited Partnership Act or any order known to us
issued pursuant to any federal or New York statute or the
Delaware General Corporation Law or the Delaware Revised
Uniform Limited Partnership Act by any court or governmental
agency or body or court having jurisdiction over the Company
or any of its subsidiaries or any of their respective
properties or assets; and no consent, approval, authorization,
order, registration or qualification of or with any federal or
New York governmental agency or body or any Delaware
governmental agency or body acting
pursuant to the Delaware General Corporation Law or the
Delaware Revised Uniform Limited Partnership Act or, to our
knowledge, any federal or New York court or any Delaware
court acting pursuant to the Delaware General Corporation
Law or the Delaware Revised Uniform Limited Partnership Act
is required for the issuance and sale of the Notes by the
Company or the issuance of the Guarantees by the Subsidiary
Guarantors, except for the registration under the Securities
Act of the Series B Notes and the Series B Guarantees, in
accordance with the Registration Rights Agreement, and the
qualification of the Indenture under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), 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 Notes and the Guarantees by the Initial
Purchasers. The opinions set forth in this paragraph are
based upon our consideration of only those statutes, rules
and regulations which, in our experience, are normally
applicable to securities underwriting transactions.
17. No registration of the Notes and the Guarantees
under the Securities Act and no qualification of the Indenture
under the Trust Indenture Act is required for the offer and
sale of the Notes by the Company and the Guarantees by the
Subsidiary Guarantors to the Initial Purchasers or the reoffer
and resale of the Notes by the Initial Purchasers to the
initial purchasers therefrom solely in the manner contemplated
by the Offering Memorandum, the Purchase Agreement and the
Indenture.
Our opinions set forth in paragraphs 4, 5, 6, 7, 8, 14 and 15
above are subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing. Our opinions set forth in paragraphs 14 and 15 are
further limited by considerations of public policy.
We express no opinion as to the validity, legally binding
effect or enforceability of any provision of the Registration Rights Agreement
or any related provisions of the Indenture that requires or relates to payment
of any interest at a rate or in an amount which a court would determine in the
circumstances under applicable law to be commercially unreasonable or a penalty
or a forfeiture. In addition, we express no opinion as to the validity, legally
binding effect or enforceability of the waiver of rights and defenses contained
in Section 11.07 of the Indenture.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Offering Memorandum or the
Exchange Act Documents and take no responsibility therefor, except as and to the
extent set forth in paragraphs 10 and 11 above. In the course of the preparation
by the Company of the Offering Memorandum (excluding the Exchange Act
Documents), we participated in conferences with certain officers and employees
of the Company, with representatives of PricewaterhouseCoopers L.L.P and with
counsel to the Initial Purchasers. We did not prepare the Exchange Act
Documents. Based upon our examination of the Offering Memorandum and the
Exchange Act Documents, our investigations made in connection with the
preparation of the Offering Memorandum (excluding
the Exchange Act Documents) and our participation in the conferences referred to
above, we have no reason to believe that the Offering Memorandum (including the
Exchange Act Documents) as of its date contained or as of the date hereof
contains any untrue statement of a material fact or omits or omitted 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 we express no belief with respect to the financial statements
or other financial data contained in the Offering Memorandum or the Exchange Act
Documents.
We are members of the Bar of the State of New York and we do
not express any opinion herein concerning any law other than the law of the
State of New York, the federal law of the United States, the Delaware General
Corporation Law and the Delaware Revised Uniform Limited Partnership Act.
This opinion letter is rendered to you in connection with the
above described transactions. This opinion letter may not be relied upon by you
for any other purpose, or relied upon by, or furnished to, any other person,
firm or corporation without our prior written consent.
Very truly yours,
XXXXXXX XXXXXXX & XXXXXXXX
SCHEDULE I
DELAWARE GUARANTORS
-------------------
HYGIENETICS ENVIRONMENTAL SERVICES, INC., a Delaware Corporation
L-3 COMMUNICATIONS ILEX SYSTEMS, INC., a Delaware Corporation
L-3 COMMUNICATIONS SPD TECHNOLOGIES, INC., a Delaware Corporation
L-3 COMMUNICATIONS ESSCO, INC., a Delaware Corporation
SPD ELECTRICAL SYSTEMS, INC., a Delaware Corporation
SPD SWITCHGEAR, INC., a Delaware Corporation
PAC ORD, INC., a Delaware Corporation
XXXXXXXX, INC., a Delaware Corporation
SPD HOLDINGS, INC., a Delaware Corporation
POWER PARAGON, INC., a Delaware Corporation
L-3 COMMUNICATIONS AYDIN CORPORATION, a Delaware Corporation
L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P., a Delaware Limited Partnership
L-3 COMMUNICATIONS AIS GP CORPORATION, a Delaware Corporation
L-3 COMMUNICATIONS INVESTMENTS, INC., a Delaware Corporation
MPRI, INC., a Delaware Corporation
KDI PRECISION PRODUCTS, INC., a Delaware Corporation
SCHEDULE II
NON-DELAWARE GUARANTORS
-----------------------
SOUTHERN CALIFORNIA MICROWAVE, INC., a California Corporation
L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC., a California Corporation
L-3 COMMUNICATIONS DBS MICROWAVE, INC., a California Corporation
MICRODYNE CORPORATION, a Maryland Corporation
ELECTRODYNAMICS, INC., an Arizona Corporation
INTERSTATE ELECTRONICS CORPORATION, a California Corporation
XXXXXXX RESEARCH CORPORATION, a Florida Corporation
EER SYSTEMS, INC., a Virginia Corporation
L-3 COMMUNICATIONS ANALYTICS CORPORATION, a California Corporation
AMI INSTRUMENTS, INC., an Oklahoma Corporation
L-3 COMMUNICATIONS ATLANTIC SCIENCE AND TECHNOLOGY CORPORATION, a
New Jersey Corporation
MICRODYNE COMMUNICATIONS TECHNOLOGIES INCORPORATED, a Maryland
Corporation
APCOM, INC., a Maryland Corporation
CELERITY SYSTEMS INCORPORATED, a California Corporation
MICRODYNE OUTSOURCING INCORPORATED, a Maryland Corporation
EXHIBIT B
OPINION OF XXXXXXXXXXX X. XXXXXXX
1. To my knowledge, the Company and each of its subsidiaries
have good and marketable title to all property (real and personal) described in
the Offering Memorandum as being owned by them, free and clear of all liens,
claims, security interests or other encumbrances except such as are described in
the Offering Memorandum (or in documents incorporated therein by reference) or,
to the extent that any such liens, claims, security interests or other
encumbrances would not have a Material Adverse Effect (individually or in the
aggregate) and all the material property described in the Offering Memorandum as
being held under lease by the Company and its subsidiaries is held by them under
valid, subsisting and enforceable leases, with only such exceptions as would not
have a Material Adverse Effect (individually or in the aggregate).
2. To my knowledge and except as otherwise disclosed in the
Offering Memorandum (or in documents incorporated therein by reference), 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.
3. To my knowledge and except (i) as otherwise disclosed in
the Offering Memorandum (or in documents incorporated therein by reference) and
(ii) as provided in the Registration Rights Agreement, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to include such person's securities in
the securities registered pursuant to the Exchange Offer Registration Statement
or the Shelf Registration Statement.
4. None of the issue and sale of the Notes by the Company and
the Guarantees by the Guarantors and the compliance by the Company and the
Guarantors, as applicable, with all of the provisions of this Agreement and the
consummation of the transactions contemplated hereby 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 contained in this paragraph (4)
may be delivered by other counsel reasonably satisfactory to the Initial
Purchasers).
Whenever a statement herein is qualified by "to my knowledge"
or a similar phrase, it is intended that I do not have current, actual knowledge
of the inaccuracy of such statement; however, except as expressly indicated, I
have not undertaken any independent investigation to determine the accuracy of
such statement and no inference should be drawn that I have any such knowledge
solely from my position with the Company.
I am a member of the Bar of the State of New York, and I do
not express any opinion herein concerning any law other than the law of the
State of New York, the federal law
of the United States, the Delaware Revised Uniform Limited Partnership Act and
the Delaware General Corporation Law.
EXHIBIT C
FORM OF CERTIFICATE FROM
ACQUIRING ACCREDITED INVESTOR
XXXXXX BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON CORPORATION
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx, Xxxxx Xxxxx
High Yield Capital Markets
New York, New York 10019
Re: L-3 Communications Corporation
Reference is hereby made to (i) the Purchase Agreement, dated June 25,
2002 (the "Purchase Agreement") among L-3 Communications Corporation, as issuer
(the "Company"), the Guarantors named on the signature pages thereto and you and
(ii) the Indenture to be dated as of June 28, 2002 (the "Indenture") relating to
the 7% Senior Subordinated Notes due 2012, among the Company, the Guarantors
named on the signature pages thereto and The Bank of New York, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture or the Purchase Agreement.
In connection with my proposed purchase of $5,000,000
aggregate principal amount of Series A Notes, I hereby confirm that:
1. I understand that any subsequent transfer of the Series A
Notes, or any interest therein is subject to certain restrictions and conditions
set forth in the Indenture and the Series A Notes and the undersigned agrees to
be bound by, and not to resell, pledge or otherwise transfer the Series A Notes
or any interest therein except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities Act").
2. I understand that the offer and sale of the Series A Notes
has not been registered under the Securities Act, and that the Series A Notes
and any interest therein may not be offered or sold except as permitted in the
following sentence. I agree that if I should sell the Series A Notes or any
interest therein, I will do so only (1) (a) to a person who I reasonably believe
is a Qualified Institutional Buyer (as defined in Rule 144A under the Act) in a
transaction meeting the requirements of Rule 144A, (b) in a transaction meeting
the requirements of Rule 144 under the Securities Act, (c) outside the United
States to a foreign person in a transaction meeting the requirements of Rule 904
under the Securities Act or (d) in accordance with another exemption from the
registration requirements of the Securities Act (and based on an opinion of
counsel if the Company so requests), (2) to the Company or (3) pursuant to an
effective registration statement and, in each case, in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction, and I further agree to provide to any person purchasing
a beneficial interest in a Series A Note from me in a transaction meeting the
requirements of clauses (a) through (d) above a notice advising such purchaser
that resales thereof are restricted as stated herein.
3. I understand that, on any proposed resale of the Series A
Notes or beneficial interest therein, I will be required to furnish to the
Company such certifications, legal opinions and other information as the Company
may reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. I further understand that the Series A Notes purchased
by me will bear a legend to the foregoing effect.
4. I am an "accredited investor" (as defined in Rule
501(a)(4), (5) or (6) of Regulation D under the Securities Act) and have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of my investment in the Series A Notes and I am
able to bear the economic risk of my investment.
5. I am acquiring the Series A Notes or beneficial interest
therein purchased by me for my account.
6. I am acquiring the Series A Notes for investment purposes
only with no present intention to resell the Series A Notes, and agree not to
sell, transfer, assign, pledge or hypothecate any of the Series A Notes for at
least three months following the completion of the offering.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
[Signature Page to Follow]
By:
--------------------------------------
Name:
Title:
Dated:
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