EXHIBIT 1.2
1,100,000 SHARES
L-3 COMMUNICATIONS HOLDINGS, INC.
COMMON STOCK, $.01 PAR VALUE
FORM OF INTERNATIONAL UNDERWRITING AGREEMENT
May __, 1998
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
BEAR, XXXXXXX INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
X.X. XXXXXXXXX, TOWBIN
As Lead Managers of the several
International Managers named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
L-3 Communications Holdings, Inc., a Delaware corporation
(the "Company"), proposes to sell 1,100,000 shares (the "International Stock")
of the Company's Common Stock, par value $.01 per share (the "Common Stock").
As described in the Prospectus (hereinafter defined), the Company will use the
net proceeds from the sale of the International Stock to repay a substantial
portion of its existing indebtedness and for general corporate purposes,
including potential acquisitions. This is to confirm the agreement concerning
the purchase of the International Stock from the Company by the International
Managers.
It is understood by all parties that the Company is
concurrently entering into an agreement dated the date hereof (the "U.S.
Underwriting Agreement") providing for the sale by the Company of 4,400,000
shares of Common Stock (the "Firm Stock") through arrangements with certain
underwriters inside the United States (the "U.S. Underwriters"), for whom
Xxxxxx Brothers Inc., Bear, Xxxxxxx & Co. Inc., Credit Suisse First Boston
Corporation, Xxxxxx Xxxxxxx & Co. Incorporated and X.X. Xxxxxxxxx, Towbin are
acting as Representatives. In addition, the Company proposes to grant to the
U.S. Underwriters an option under the U.S. Underwriting Agreement to purchase
up to an additional 825,000 shares of Common Stock ("the Option Stock" and,
together with the Firm Stock, the "U.S. Stock") on the terms and for the
purposes set forth in Section 2 of
the U.S. Underwriting Agreement. The International Managers and the U.S.
Underwriters simultaneously are entering into an agreement between the U.S. and
international underwriting syndicates (the "Agreement Between U.S. Underwriters
and International Managers") which provides for, among other things, the
transfer of shares of Common Stock between the two syndicates. Two forms of
prospectus are to be used in connection with the offering and sale of shares of
Common Stock contemplated by the foregoing, one relating to the U.S. Stock and
the other relating to the International Stock. The latter form of prospectus
will be identical to the former except for certain substitute pages as included
in the registration statement and amendments thereto referred to below. Except
as used in Sections 2, 3, 4 and 9 herein, and except as the context may
otherwise require, references herein to the Stock shall include all the shares
of Common Stock which may be sold pursuant to either this Agreement or the U.S.
Underwriting Agreement, and references herein to any prospectus whether in
preliminary or final form, and whether as amended or supplemented, shall
include both the international and the U.S. versions thereof.
1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-1, and
amendments Xx. 0, Xx. 0, Xx. 0 and No. 4 thereto, with
respect to the Stock have (i) been prepared by the Company in
conformity with the requirements of the United States
Securities Act of 1933, as amended (the "Securities Act") and
the rules and regulations (the "Rules and Regulations") of
the United States Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement and the
amendments thereto have been delivered by the Company to you
as the Lead Managers (the "Lead Managers") of the
International Managers. As used in this Agreement, "Effective
Time" means the date and the time as of which such
registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the
Commission; "Effective Date" means the date of the Effective
Time; "Preliminary Prospectus" means each prospectus included
in such registration statement, or amendments thereof, before
it became effective under the Securities Act and any
prospectus filed with the Commission by the Company with the
consent of the Lead Managers pursuant to Rule 424(a) of the
Rules and Regulations; "Registration Statement" means such
registration statement, as amended at the Effective Time,
including all information contained in the final prospectus
filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations in accordance with Section 5 hereof and
deemed to be a part of the registration statement as of the
Effective Time pursuant to paragraph (b) of Rule 430A of the
Rules and Regulations; and "Prospectus" means such final
prospectus, as first filed with the Commission pursuant to
paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. If the Company has filed or is required pursuant
to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Securities Act registering
additional shares of Common Stock (a "Rule 462(b)
2
Registration Statement"), then, unless otherwise specified,
any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462(b) Registration
Statement. The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus; and no
stop order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for such purpose
are pending before or threatened by the Commission. Any Rule
462(b) Registration Statement filed after the effectiveness
of this Agreement will become effective no later than 10:00
P.M., New York City time, on the date of this Agreement.
(b) The Registration Statement (other than any Rule
462(b) Registration Statement to be filed by the Company
after the effectiveness of this Agreement) conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement (including, if the Company is required
to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, such Rule 462(b)
Registration Statement and any amendments thereto) or the
Prospectus will, when they become effective or are filed with
the Commission, as the case may be, conform in all respects
to the requirements of the Securities Act and the Rules and
Regulations and do not and will not, as of the applicable
effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as
to the Prospectus and any amendment or supplement thereto)
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
provided that no representation or warranty is made as to
information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company
through the Lead Managers by or on behalf of any
International Manager specifically for inclusion therein.
(c) The market-related and customer-related data and
estimates included in the Prospectus are based on or derived
from sources which the Company believes to be reliable and
accurate.
(d) The Company and each of its subsidiaries (as
defined in Section 15) have been duly incorporated and are
validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, 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 whole (a "Material Adverse Effect"),
3
and have all power and authority necessary to own or hold
their respective properties and to conduct the businesses in
which they are engaged; and none of the subsidiaries of the
Company (other than L-3 Communications Corporation (the
"Significant Subsidiary")) is a "significant subsidiary," as
such term is defined in Rule 405 of the Rules and
Regulations.
(e) Prior to the delivery of the Stock on the First
Delivery Date, the Company will have an authorized
capitalization as set forth in the Prospectus, and all of the
issued shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof
contained in the Prospectus; and all of the issued shares of
capital stock of each subsidiary of the Company have been
duly and validly authorized and issued and are fully paid and
non-assessable and (except for directors' qualifying shares)
are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims, other
than (i) liens, encumbrances, equities or claims described in
the Prospectus and (ii) such other liens, encumbrances,
equities or claims as are not, individually or in the
aggregate, material to the Company and its subsidiaries,
taken as a whole.
(f) Prior to the delivery of the Stock on the First
Delivery Date, the shares of the Stock to be issued and sold
by the Company to the International Managers hereunder and to
the U.S. Underwriters under the U.S. Underwriting Agreement
will have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein and
in the U.S. Underwriting Agreement, will be duly and validly
issued, fully paid and non-assessable; and the Stock will
conform to the description thereof contained in the
Prospectus.
(g) This Agreement has been duly authorized,
executed and delivered by the Company and the Significant
Subsidiary.
(h) The execution, delivery and performance of this
Agreement and the U.S. Underwriting Agreement by the Company
and the Significant Subsidiary and the consummation of the
transactions contemplated hereby and thereby will not
conflict with or constitute a breach of, or a default under,
any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject
that is material to the financial condition or prospects of
the Company and its subsidiaries, taken as a whole
(collectively, the "Material Agreements"), except for breach
of which, individually, or in the aggregate, would not result
in a Material Adverse Effect, nor will such actions result in
any violation of the provisions of the charter or by-laws of
the Company or any of its subsidiaries or any material law,
statute or any order, rule or regulation of any court or
4
governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties
or assets, provided, that the provisions for indemnification
and contribution hereunder and thereunder may be limited by
equitable principles and public policy consideration; and
except for the registration of the International Stock and
the U.S. Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as
may be required under the United States Securities Exchange
Act of 1934, as amended (the "Exchange Act") and applicable
state or foreign securities laws in connection with the
purchase and distribution of the Stock by the International
Managers and the U.S. Underwriters, no consent, approval,
authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement, or
the U.S. Underwriting Agreement by the Company and the
Significant Subsidiary and the consummation of the
transactions contemplated hereby and thereby.
(i) Except as described in the Prospectus, there are
no contracts, agreements or understandings between the
Company and any person granting such person the right (other
than rights which have been waived or satisfied or rights not
exercisable in connection with the Registration Statement) to
require the Company to file a registration statement under
the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the
Company to include such securities in the securities
registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other
registration statement filed by the Company under the
Securities Act.
(j) Except as described in the Registration
Statement, the Company has not sold or issued any shares of
Common Stock during the six-month period preceding the date
of the Prospectus, including any sales pursuant to Rule 144A
under, or Regulations D or S of, the Securities Act other
than shares issued pursuant to employee benefit plans,
qualified stock options plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.
(k) Neither the Company nor any of its subsidiaries
has incurred, since the date of the latest audited financial
statements included in the Prospectus, any liability or
obligation, direct or contingent, or entered into any
transaction, in each case not in the ordinary course of
business, that is material to the Company and its
subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus; and, since such date, there
has not been any material change in the capital stock or
material increase in the short-term or long-term debt of the
Company or any of its subsidiaries or any material adverse
change, or any development involving or which would
reasonably be expected to involve a Material Adverse Effect,
otherwise than as described or contemplated in the
Prospectus.
5
(l) The historical and pro forma financial
statements, together with related notes, set forth in the
Prospectus comply as to form in all material respects with
the requirements of Regulation S-X under the Securities Act
applicable to registration statements on Form S-1 under the
Securities Act. The historical financial statements of the
Company fairly present the financial position of the Company
(or its predecessors) at the respective dates indicated and
the results of operations and cash flows of the Company (or
its predecessors) for the respective periods indicated, in
accordance with generally accepted accounting principals
consistently applied throughout such periods. Such pro forma
financial statements have been prepared on a basis consistent
with such historical statements of the Company, except for
the pro forma adjustments specified therein, and give effect
to assumptions made on a reasonable basis and in good faith
and present fairly the historical and proposed transactions
contemplated by the Prospectus and this Agreement. The other
financial and statistical information and data included in
the Prospectus, historical and pro forma, have been derived
from the financial records of the Company (or its
predecessor) and, in all material respects, have been
prepared on a basis consistent with such books and records of
the Company (or its predecessor), except as disclosed
therein.
(m) Coopers & Xxxxxxx L.L.P., who have certified
certain financial statements of the Company, whose report
appears in the Prospectus and who have delivered the initial
letter referred to in Section 7(g) hereof, are independent
public accountants as required by the Securities Act and the
Rules and Regulations; and Ernst & Young LLP and KPMG Peat
Marwick LLP, whose reports appear in the Prospectus and who
have delivered the initial letters referred to in Sections
7(h) and 7(i) hereof, are independent accountants as required
by the Securities Act and the Rules and Regulations.
(n) The Company and each of its subsidiaries have
good and marketable title to all property (real and personal)
described in the Prospectus as being owned by them, free and
clear of all liens, claims, security interests or other
encumbrances except such as are described in the Prospectus
or, to the extent that any such liens, claims, security
interests or other encumbrances would not have a Material
Adverse Effect (individually or in the aggregate) and all the
material property described in the Prospectus as being held
under lease by the Company and its subsidiaries is held by
them under valid, subsisting and enforceable leases, with
only such exceptions as would not have a Material Adverse
Effect (individually or in the aggregate).
(o) The Company and each of its subsidiaries own or
possess adequate rights to use all material patents,
trademarks, service marks, trade names, copyrights, licenses,
inventions, trade secrets and other rights, and all
registrations or applications relating thereto, described in
the Prospectus as being owned by them
6
or necessary for the conduct of their business, except as
such would not have a Material Adverse Effect (individually
or in the aggregate), and the Company is not aware of any
pending or threatened claim to the contrary or any pending or
threatened challenge by any other person to the rights of the
Company and its subsidiaries with respect to the foregoing
which, if determined adversely to the Company and its
subsidiaries, would have a Material Adverse Effect
(individually or in the aggregate).
(p) Except as described in the Prospectus, there are
no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or
any of its subsidiaries or to which the Company or any of its
subsidiaries is a party or of which any property or assets of
the Company or any of its subsidiaries is the subject which,
if determined adversely to the Company or any of its
subsidiaries, are reasonably likely to cause a Material
Adverse Effect.
(q) There are no contracts or other documents which
are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Securities Act
or by the Rules and Regulations which have not been described
in the Prospectus or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted
by the Rules and Regulations.
(r) No material relationship, direct or indirect,
exists between or among the Company on the one hand, and the
directors, officers, stockholders, customers or suppliers of
the Company on the other hand, except as described in the
Prospectus.
(s) The Company is not involved in any strike, job
action or labor dispute with any group of employees that
would have a Material Adverse Effect, and, to the Company's
knowledge, no such action or dispute is threatened.
(t) Except as disclosed in the Prospectus, the
Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder
("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any material
liability; the Company has not incurred and does not expect
to incur any material liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code") (other
than contributions in the normal course which are not in
default); and each "pension plan" for which the Company would
have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material
respects
7
and nothing has occurred, whether by action or by failure to
act, which would reasonably be expected to cause the loss of
such qualification.
(u) The Company and its subsidiaries have filed all
federal, state and local income and franchise tax returns
required to be filed through the date hereof and have paid
all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or any of its
subsidiaries nor does the Company have any knowledge of any
tax deficiency which, if determined adversely to the Company
and its subsidiaries, might have a Material Adverse Effect.
(v) Neither the Company nor any of its subsidiaries
(i) is in violation of its charter or by-laws, (ii) is in
default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any
term, covenant or condition contained in any Material
Agreement or (iii) is in violation in any material respect of
any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject
or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the
conduct of its business, except as would not, individually or
in the aggregate, have a Material Adverse Effect.
(w) To the best of the Company's knowledge, neither
the Company nor any of its subsidiaries, nor any director,
officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries,
has used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or
employee from corporate funds or violated or is in violation
of any provision of the Foreign Corrupt Practices Act of
1977; except as such that would not have a Material Adverse
Effect.
(x) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or
treatment of toxic wastes, medical wastes, hazardous wastes
or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of
their predecessors in interest) at, upon or from any of the
property now or previously owned or leased by the Company or
its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or
permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action
which would not have, or would not be reasonably likely to
have, singularly or in the aggregate with all such violations
and remedial actions, a Material Adverse Effect; there has
been no material spill, discharge, leak, emission, injection,
escape, dumping or release of any kind onto such property or
into the environment surrounding such property of any toxic
8
wastes, medical wastes, solid wastes, hazardous wastes or
hazardous substances due to or caused by the Company or any
of its subsidiaries or with respect to which the Company has
knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would
not have or would not be reasonably likely to have,
singularly or in the aggregate with all such spills,
discharges, leaks, emissions, injections, escapes, dumpings
and releases, a Material Adverse Effect; and the terms
"hazardous wastes," "toxic wastes," "hazardous substances"
and "medical wastes" shall have the meanings specified in any
applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(y) Neither the Company nor any subsidiary is an
"investment company" within the meaning of such term under
the United States Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
(z) All of the representations and warranties of
the parties to the U.S. Underwriting Agreement and the debt
underwriting agreement (the "Debt Underwriting Agreement"),
dated as of the date hereof, providing for the sale by the
Company of $150,000,000 in aggregate principal amount of the
Significant Subsidiary's ___% Senior Subordinated Notes due
2008 (the "Notes") to Xxxxxx Brothers Inc. and BancAmerica
Xxxxxxxxx Xxxxxxxx, are true and correct.
2. Purchase of the Stock by the International Managers. On
the basis of the representations and warranties contained in, and subject to
the terms and conditions of, this Agreement, the Company agrees to sell the
International Stock to the several International Managers and each of the
International Managers, severally and not jointly, agrees to purchase the
number of shares of the International Stock set opposite that International
Manager's name in Schedule 1 hereto. The respective purchase obligations of the
International Managers with respect to the International Stock shall be rounded
among the International Managers to avoid fractional shares, as the Lead
Managers may determine.
The Company shall not be obligated to deliver any of the
Stock to be delivered on the First Delivery Date (as hereinafter defined),
except upon payment for all the Stock to be purchased on the First Delivery
Date as provided herein and in the U.S. Underwriting Agreement.
3. Offering of Stock by the International Managers.
Upon authorization by the Lead Managers of the release of the
International Stock, the several International Managers propose to offer the
International Stock for sale upon the terms and conditions set forth in the
Prospectus.
9
Each International Manager agrees that, except to the extent
permitted by the Agreement Between U.S. Underwriters and International
Managers, it will not offer or sell any of the Stock outside of the United
States.
4. Delivery of and Payment for the Stock. Delivery of and
payment for the International Stock shall be made at the office of Xxxxxx &
Xxxxxxx, 000 Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M., New York City
time, on the third full business day following the date of this Agreement or at
such other date or place as shall be determined by agreement between the Lead
Managers and the Company. This date and time are sometimes referred to as the
"First Delivery Date." On the First Delivery Date, the Company shall deliver or
cause to be delivered certificates representing the International Stock to the
Lead Managers for the account of each International Manager against payment to
or upon the order of the Company of the purchase price by wire transfer in
immediately available funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each International Manager hereunder. Upon delivery, the
International Stock shall be registered in such names and in such denominations
as the Lead Managers shall request in writing not less than two full business
days prior to the First Delivery Date. For the purpose of expediting the
checking and packaging of the certificates for the International Stock, the
Company shall make the certificates representing the International Stock
available for inspection by the Lead Managers in New York, New York, not later
than 2:00 P.M., New York City time, on the business day prior to the First
Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by
the Lead Managers and to file such Prospectus pursuant to
Rule 424(b) under the Securities Act not later than
Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule
430A(a)(3) under the Securities Act; to make no further
amendment or any supplement to the Registration Statement or
to the Prospectus except as permitted herein; to advise the
Lead Managers, promptly (i) after it receives notice thereof,
of the time when any amendment to the Registration Statement
has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and (ii)
if the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, when the
Rule 462(b) Registration Statement has become effective and,
in the case of each of (i) and (ii), to furnish the Lead
Managers with copies thereof; to advise the Lead Managers,
promptly after it receives notice thereof, of the issuance by
the Commission of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the
Stock for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the
10
amending or supplementing of the Registration Statement or
the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such
qualification, to use promptly its reasonable best efforts to
obtain its withdrawal;
(b) To furnish promptly to each of the Lead Managers
and to counsel for the International Managers a conformed
copy of the Registration Statement as originally filed with
the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed
therewith;
(c) To deliver promptly to the Lead Managers such
number of the following documents as the Lead Managers shall
reasonably request each Preliminary Prospectus, the
Prospectus and any amended or supplemented Prospectus; and,
if the delivery of a prospectus is required at any time after
the Effective Time in connection with the offering or sale of
the Stock or any other securities relating thereto and if at
such time any events shall have occurred as a result of which
the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the
Securities Act, to notify the Lead Managers and, upon their
request, to file such document and to prepare and furnish
(without charge for the 9 month period following the First
Delivery Date) to each International Manager and to any
dealer in securities as many copies as the Lead Managers may
from time to time reasonably request of an amended or
supplemented Prospectus which will correct such statement or
omission or effect such compliance;
(d) To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or
any supplement to the Prospectus that may, in the judgment of
the Company or the Lead Managers, be required by the
Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any
amendment to the Registration Statement or supplement to the
Prospectus or any Prospectus pursuant to Rule 424 of the
Rules and Regulations, to furnish a copy thereof to the Lead
Managers and counsel for the International Managers and not
to file any such document to which the Lead Managers shall
reasonably object after having been given reasonable notice
of the proposed filing thereof;
(f) As soon as practicable after the Effective Date,
(it being understood that the Company shall have until at
least 410 days after the end of the Company's
11
current fiscal quarter) to make generally available to the
Company's security holders and to deliver to the Lead
Managers an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with
Section 11(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Company, Rule
158);
(g) Promptly from time to time to take such action
as the Lead Managers may reasonably request to qualify the
Stock for offering and sale under the securities laws of such
jurisdictions as the Lead Managers may request (provided,
however, that the Company shall not be obligated to qualify
as a foreign corporation in any jurisdiction in which it is
not now so qualified or to take any action that would subject
it to general consent to service of process in any
jurisdiction in which it is not now so subject) and to comply
with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Stock;
(h) For a period of 180 days from the date of the
Prospectus, not to, directly or indirectly, (1) offer for
sale, sell, or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or
securities convertible into or exchangeable or exercisable
for Common Stock (other than the International Stock, the
U.S. Stock and shares issued pursuant to currently
outstanding options, warrants, rights or convertible
securities), or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of
Xxxxxx Brothers Inc.; and to cause each person who
beneficially owns more than 5% of the outstanding shares of
Common Stock as of the date of the Prospectus and each
officer and director of the Company to furnish to the Lead
Managers, prior to the date of the Prospectus, a letter or
letters, in form and substance satisfactory to counsel for
the Lead Managers, pursuant to which each such person shall
agree not to, directly or indirectly, (1) offer for sale,
sell, or otherwise dispose of (or enter into any transaction
or device which is designed to, or could be expected to,
result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common
Stock or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or
otherwise, in each case for a period of 180 days from the
date of the Prospectus except for transactions by any person
other than the Company and its subsidiaries relating to
shares of Common Stock or
12
other securities convertible into or exchangeable or
exercisable for Common Stock acquired in open market
transactions after the completion of the Common Stock
Offering, without the prior written consent of Xxxxxx
Brothers Inc.;
(i) Prior to the Effective Date, to apply for the
listing of the Stock on the New York Stock Exchange and to
use its best efforts to complete that listing, subject only
to official notice of issuance, prior to the First Delivery
Date;
(j) To apply the net proceeds from the sale of the
Stock being sold by the Company as set forth in the
Prospectus;
(k) To take such steps as shall be necessary to
ensure that neither the Company nor any subsidiary shall
become an "investment company" within the meaning of such
term under the United States Investment Company Act of 1940
and the rules and regulations of the Commission thereunder;
and
(l) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the
Shares, to file a Rule 462(b) Registration Statement with the
Commission registering the Shares not so covered in
compliance with Rule 462(b) by 10:00 P.M., New York City
time, on the date of this Agreement and to pay to the
Commission the filing fee for such Rule 462(b) Registration
Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant
to Rule 111(b) under the Securities Act.
6. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the filing fees incident to securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of sale of the Stock; (e) any applicable listing or other fees; (f) the
fees and expenses of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 5(h) and of preparing, printing
and distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the International Managers); and (g) all other costs and expenses
incident to the performance of the obligations of the Company; provided, that
(x) the Company and the International Managers will bear their own "road show"
expenses and (y) the Company on the one hand, and the International Managers on
the other hand, will each bear one half of the cost of the charter aircraft
used in connection with the "road show."
13
7. Conditions of International Managers' Obligations. The
respective obligations of the International Managers hereunder are subject to
the accuracy, when made and on the First Delivery Date, of the representations
and warranties of the Company contained herein, to the performance by the
Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) The Prospectus shall have been timely filed with
the Commission in accordance with Section 5(a); no stop order
suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the
Commission; any request of the Commission for inclusion of
additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with; and
any 462(b) Registration Statement required by this Agreement
to be filed shall have been so filed and become effective.
(b) No International Manager or U.S. Underwriter
shall have discovered and disclosed to the Company on or
prior to the First Delivery Date that the Registration
Statement or the Prospectus or any amendment or supplement
thereto contains an untrue statement of a fact which, in the
opinion of Xxxxxx & Xxxxxxx, counsel for the International
Managers, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be
stated therein or is necessary to make the statements therein
not misleading.
(c) All corporate proceedings and other legal
matters incident to the authorization, form and validity of
this Agreement, the U.S. Underwriting Agreement, the Stock,
the Registration Statement and the Prospectus, and all other
legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the International Managers,
and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to
enable them to pass upon such matters.
(d) Xxxxxxx Xxxxxxx & Xxxxxxxx shall have furnished
to the Lead Managers its written opinion, as counsel to the
Company, addressed to the International Managers and dated
the First Delivery Date, in form and substance reasonably
satisfactory to the Lead Managers, to the effect that:
(i) The Company and each of its Delaware
subsidiaries have been duly incorporated and are
validly existing as corporations and in good
standing under the laws of Delaware, and have all
corporate power and authority necessary to conduct
their respective businesses as described in the
Registration Statement and the Prospectus;
14
(ii) All of the outstanding shares of Common
Stock of the Company (including the shares of
International Stock and U.S. Stock being delivered
on the First Delivery Date (as defined in the U.S.
Underwriting Agreement)) have been duly authorized
and all outstanding shares of Common Stock have been
and upon payment and delivery in accordance with
this Agreement, the Stock will be validly issued,
fully paid and non-assessable; all of the issued
shares of capital stock of each Delaware subsidiary
of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable
(except for directors' qualifying shares) and, based
solely on an examination of each such subsidiary's
stock ledger and minute books, all such shares are
held of record by the Company and/or a subsidiary of
the Company;
(iii) The Registration Statement has become
effective under the Securities Act and the
Prospectus was filed pursuant to Rule 424(b)__ of
the rules and regulations of the Commission under
the Act and, to our knowledge, no stop order
suspending the effectiveness of the Registration
Statement has been issued or proceeding for that
purpose has been instituted or threatened by the
Commission;
(iv) The statements contained in the
Prospectus under the captions "Risk Factors-Shares
Eligible for Future Sale," "Risk Factors-Potential
Effect of Certain Anti-takeover Provisions,"
"Business-Pension Plans," "Certain Relationships and
Related Transactions," "Management-Limitations on
Liability and Indemnification Matters,"
"Management-1997 Stock Option Plan,"
"Management-Employment Agreements," "Description of
Certain Indebtedness," "Description of Capital
Stock" and "Shares Eligible for Future Sale,"
insofar as they describe charter documents,
contracts, statutes, rules and regulations and other
legal matters, constitute an accurate summary
thereof in all material respects;
(v) The statements made in the Prospectus
under the caption "United States Federal Tax
Considerations," insofar as they purport to
constitute summaries of matters of United States
federal tax law and regulations or legal conclusions
with respect thereto, constitute accurate summaries
of the matters described therein in all material
respects.
(vi) To such counsel's knowledge, there are
no contracts or documents of a character required by
the Securities Act or by the rules and regulations
thereunder to be described in the Registration
Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not
described or filed as required by the Securities Act
or by the rules and regulations thereunder;
15
(vii) This Agreement and the U.S.
Underwriting Agreement have each been duly
authorized, executed and delivered by the Company
and the Significant Subsidiary, as applicable;
(viii) The issue and sale of the shares of
Stock being delivered on the First Delivery Date by
the Company and the compliance by the Company and
the Significant Subsidiary, as applicable, with all
of the provisions of this Agreement, the U.S.
Underwriting Agreement and the Debt Underwriting
Agreement and the consummation of the transactions
contemplated hereby and thereby will not breach or
result in a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or
instrument filed as an exhibit to the Registration
Statement nor will such actions violate the
Certificate of Incorporation or By-Laws of the
Company or any of its subsidiaries or any federal or
New York statute or the Delaware General Corporation
Law or any rule or regulation that has been issued
pursuant to any federal or New York statute or the
Delaware General Corporation Law or any order known
to such counsel issued pursuant to any federal or
New York statute or the Delaware General Corporation
Law by any court or governmental agency or body or
court having jurisdiction over the Company or any of
its subsidiaries or any of their properties or
assets; and no consent, approval, authorization,
order, registration or qualification of or with any
federal or New York governmental agency or body or
any Delaware governmental agency or body acting
pursuant to the Delaware General Corporation Law or,
to such counsel's knowledge, any federal or New York
court or any Delaware court acting pursuant to the
Delaware General Corporation Law is required for the
issue and sale of the Stock and International Stock
by the Company and the issuance and sale of the
Notes by the Significant Subsidiary (and the
guarantee of such Notes by the Guarantors), except
for the registration under the Act and the Exchange
Act of the Stock, International Stock, Notes and
Guarantees, 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 Stock, International Stock,
Notes and Guarantees by the Underwriters. The
opinions set forth in this paragraph are based upon
our consideration of only those statutes, rules and
regulations which, in such counsel's experience, are
normally applicable to securities underwriting
transactions.
In rendering such opinion, such counsel may (i)
state that its opinion is limited to matters
governed by the federal laws of the United States
and the laws of the State of New York and the
Delaware General Corporation Law.
16
Such counsel shall also have furnished to the Lead
Managers a written statement, addressed to the
International Managers and dated such Delivery Date.
Such counsel has not independently verified the
accuracy, completeness or fairness of the statements
made or included in the Registration Statement or
the Prospectus and take no responsibility therefor,
except as and to the extent set forth in paragraph
(iv) above. In the course of the preparation by the
Company of the Registration Statement and the
Prospectus, such counsel participated in conferences
with certain officers and employees of the Company,
with representatives of Coopers & Xxxxxxx L.L.P.,
Ernst & Young LLP, KPMG Peat Marwick LLP and with
counsel to the Company. Based upon our examination
of the Registration Statement and the Prospectus,
our investigations made in connection with the
preparation of the Registration Statement and the
Prospectus and our participation in the conferences
referred to above, (i) such counsel is of the
opinion that the Registration Statement, as of its
effective date, and the Prospectus, as of _______,
1998, complied as to form in all material respects
with the requirements of the Act and the applicable
rules and regulations of the Commission thereunder,
except that in each case such counsel need not
express opinion with respect to the financial
statements or other financial data contained or
incorporated by reference in the Registration
Statement or the Prospectus, and (ii) such counsel
has no reason to believe that the Registration
Statement, as of its effective date, contained any
untrue statement of a material fact or omitted to
state any material fact required to be stated
therein or necessary in order to make the statements
therein not misleading or that the Prospectus
contains any untrue statement of a material fact or
omits to state any material fact necessary in order
to make the statements therein, in the light of the
circumstances under which they were made, not
misleading, except that in each case such counsel
need not express belief with respect to the
financial statements or other financial data
contained in the Registration Statement or the
Prospectus.
(e) Xxxxxxxxxxx X. Xxxxxxx, General Counsel of the
Company, shall have furnished to the Lead Managers his
written opinion, as General Counsel to the Company, addressed
to the International Managers and dated such Delivery Date,
in form and substance reasonably satisfactory to the Lead
Managers, to the effect that:
(i) Other than as set forth in the
Prospectus, there are no preemptive or other rights
to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any shares of the
Stock pursuant to the Company's charter or by-laws
or any agreement or other instrument known to such
counsel;
17
(ii) To such counsel's knowledge, the
Company and each of its subsidiaries have good and
marketable title to all property (real and personal)
described in the Prospectus as being owned by them,
free and clear of all liens, claims, security
interests or other encumbrances except such as are
described in the Prospectus or, to the extent that
any such liens, claims, security interests or other
encumbrances would not have a Material Adverse
Effect (individually or in the aggregate) and all
the material property described in the Prospectus as
being held under lease by the Company and its
subsidiaries is held by them under valid, subsisting
and enforceable leases, with only such exceptions as
would not have a Material Adverse Effect
(individually or in the aggregate);
(iii) To such counsel's knowledge and
except as otherwise disclosed in the Prospectus,
there are no legal or governmental proceedings
pending or threatened, against the Company or any of
its subsidiaries or to which the Company or any of
its subsidiaries is a party or of which any property
or assets of the Company or any of its subsidiaries
is the subject which, if determined adversely to the
Company or any of its subsidiaries, are reasonably
likely to cause a Material Adverse Effect;
(iv) To such counsel's knowledge and except
as otherwise disclosed in the Prospectus, there are
no contracts, agreements or understandings between
the Company and any person granting such person the
right to require the Company to include such
person's securities in the securities registered
pursuant to the Registration Statement;
(v) None of the issue and sale of the
shares of Stock being delivered on such Delivery
Date by the Company and the compliance by the
Company, the Significant Subsidiary and the
Guarantors, as applicable, with all of the
provisions of this Agreement, the U.S. Underwriting
Agreement and the Debt Underwriting Agreement and
the consummation of the transactions contemplated
hereby and thereby requires any consent, approval,
authorization or other order of, or registration or
filing with, any court, regulatory body,
administrative agency or other governmental body,
agency or official having authority over government
procurement matters (provided, that the opinion in
this paragraph (v) may be delivered by other counsel
reasonably satisfactory to the Lead Managers).
(f) The Lead Managers shall have received from
Xxxxxx & Xxxxxxx, counsel for the International Managers,
such opinion or opinions, dated the First Delivery Date, with
respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related
matters as the Lead Managers may reasonably require, and the
Company shall have furnished to such counsel such
18
documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(g) At the time of execution of this Agreement, the
Lead Managers shall have received from Coopers & Xxxxxxx
L.L.P. a letter, in form and substance satisfactory to the
Lead Managers, addressed to the International Managers and
dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission and (ii)
stating, as of the date hereof (or, with respect to matters
involving changes or developments since the respective dates
as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the
date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(h) At the time of execution of this Agreement, the
Lead Managers shall have received from Ernst & Young LLP a
letter, in form and substance satisfactory to the Lead
Managers, addressed to the International Managers and dated
the date hereof (i) confirming that they are independent
public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission and (ii) stating, as of
the date hereof (or, with respect to matters involving
changes or developments since the respective dates as of
which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the
date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(i) At the time of execution of this Agreement, the
Lead Managers shall have received from KPMG Peat Marwick LLP
a letter, in form and substance satisfactory to the Lead
Managers, addressed to the International Managers and dated
the date hereof (i) confirming that they are independent
public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission and (ii) stating, as of
the date hereof (or, with respect to matters involving
changes or developments since the respective dates as of
which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the
date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters
ordinarily covered
19
by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(j) With respect to the letters referred to in the
preceding three paragraphs and delivered to the Lead Managers
concurrently with the execution of this Agreement (the
"initial letters"), the Company shall have furnished to the
Lead Managers letters (the "bring-down letters") of such
accountants, in form and substance satisfactory to the Lead
Managers, addressed to the International Managers and dated
the First Delivery Date (i) confirming that they are
independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the bring-down letters (or, with
respect to matters involving changes or developments since
the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more
than five days prior to the date of the bring- down letter),
the conclusions and findings of such firms with respect to
the financial information and other matters covered by the
initial letters and (iii) confirming in all material respects
the conclusions and findings set forth in the initial
letters.
(k) The Company shall have furnished to the Lead
Managers a certificate, dated the First Delivery Date, of its
Chairman of the Board, its President or a Vice President and
its chief financial officer stating that:
(i) The representations and warranties of
the Company in Section 1 are true and correct as of
the First Delivery Date; the Company has complied
with all its agreements contained herein; and the
conditions set forth in Sections 7(a) and 7(l) have
been fulfilled; and
(ii) They have carefully examined the
Registration Statement and the Prospectus and, in
their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not
include any untrue statement of a material fact and
did not omit to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading, and (B) since the Effective
Date no event has occurred which should have been
set forth in a supplement or amendment to the
Registration Statement or the Prospectus.
(l) (i) Neither the Company nor any of its
subsidiaries shall have sustained since the date of the
latest audited financial statements included in the
Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus
or (ii) since such date there shall not have been any
20
change in the capital stock or long-term debt of the Company
or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the business,
management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries
taken as a whole, otherwise than as set forth or contemplated
in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the
Lead Managers, so material and adverse as to make it
impracticable or inadvisable to proceed with the public
offering or the delivery of the Stock being delivered on the
First Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(m) Subsequent to the execution and delivery of this
Agreement (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule
436(g)(2) of the Rules and Regulations and (ii) no such
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications,
its rating of any of the Company's debt securities.
(n) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following:
(i) trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market,
shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body
or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become
engaged in hostilities, there shall have been an escalation
in hostilities involving the United States or there shall
have been a declaration of a national emergency or war by the
United States or (iv) there shall have occurred such a
material adverse change in general economic, political or
financial conditions (or the effect of international
conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority
in interest of the several International Managers,
impracticable or inadvisable to proceed with the public
offering or delivery of the Stock being delivered on the
First Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(o) The New York Stock Exchange shall have approved
the Stock for listing, subject only to official notice of
issuance and evidence of satisfactory distribution.
(p) The closing under the U.S. Underwriting
Agreement shall have occurred concurrently with the closing
hereunder on the First Delivery Date.
21
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the International Managers.
8. Indemnification and Contribution.
(a) The Company and the Significant Subsidiary, jointly and
severally, shall indemnify and hold harmless each International Manager
(including any International Manager in its role as qualified independent
underwriter pursuant to the rules of the National Association of Securities
Dealers, Inc.), its officers and employees and each person, if any, who
controls any International Manager within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Stock), to which
that International Manager, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, (ii) the omission or alleged omission to state
in any Preliminary Prospectus, the Registration Statement or the Prospectus, or
in any amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the statements
therein not misleading or (iii) any act or failure to act or any alleged act or
failure to act by any International Manager in connection with, or relating in
any manner to, the Stock or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Company and the Significant Subsidiary shall not be liable
under this clause (iii) to the extent that it is determined in a final judgment
by a court of competent jurisdiction that such loss, claim, damage, liability
or action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such International Manager through its gross negligence
or willful misconduct), and shall reimburse each International Manager and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that International Manager, officer,
employee or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action
as such expenses are incurred; provided, however, that the Company and the
Significant Subsidiary shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any such amendment or supplement, in reliance upon and in
conformity with written information concerning such International Manager
furnished to the Company through the Lead Managers by or on behalf of any
International Manager specifically for inclusion therein; provided further,
that the indemnification contained in this paragraph (a) with respect to the
Preliminary Prospectus shall not inure to the benefit of any International
Manager (or to the benefit of any officers or employees of any International
Manager or of any person controlling such
22
International Manager) on account of any such loss, claim, damage, liability or
action arising from the sale of Stock by such International Manager to any
person if the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in the Preliminary Prospectus was
corrected in the Prospectus and the International Manager sold Stock to that
person without sending or giving at or prior to the written confirmation of
such sale, a copy of the Prospectus (as then amended or supplemented) if the
Company has previously furnished sufficient copies thereof to the International
Manager on a timely basis to permit such sending or giving which information
consists solely of the information specified in Section 8(e). The foregoing
indemnity agreement is in addition to any liability which the Company or the
Significant Subsidiary may otherwise have to any International Manager or to
any officer, employee or controlling person of that International Manager.
(b) Each International Manager, severally and not jointly,
shall indemnify and hold harmless the Company, its officers and employees, each
of its directors, and each person, if any, who controls the Company within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company or any such director, officer or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained (A) in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto, or (B) in any Blue Sky Application or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement thereto, or in
any Blue Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information concerning such International Manager furnished to the Company
through the Lead Managers by or on behalf of that International Manager
specifically for inclusion therein, and shall reimburse the Company and any
such director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability
which any International Manager may otherwise have to the Company or any such
director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such
23
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 International Managers or any of their respective officers, employees or
controlling persons, or by the Company, if the indemnified parties under this
Section consist of the Company or any of the Company's directors, officers,
employees or controlling persons. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) 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
24
liability, or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Company, the
Significant Subsidiary on the one hand and the International Managers on the
other from the offering of the Stock or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, the Significant Subsidiary,
on the one hand and the International Managers on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Significant Subsidiary, on the one hand and the International Managers on the
other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock purchased
under this Agreement (before deducting expenses) received by the Company, the
Significant Subsidiary, on the one hand, and the total underwriting discounts
and commissions received by the International Managers with respect to the
shares of the Stock purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the shares of the Stock under
this Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Significant Subsidiary, or the International Managers, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. For purposes of
the preceding two sentences, the net proceeds deemed to be received by the
Company shall be deemed to be also for the benefit of the Significant
Subsidiary and information supplied by the Company shall also be deemed to have
been supplied by the Significant Subsidiary. The Company, the Significant
Subsidiary and the International Managers agree that it would not be just and
equitable if contributions pursuant to this Section were to be determined by
pro rata allocation (even if the International Managers were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The 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 International Manager shall be required to
contribute any amount in excess of the amount by which the total price at which
the Stock underwritten by it and distributed to the public was offered to the
public exceeds the amount of any damages which such International Manager has
otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 8(e) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The International Managers'
obligations to contribute as provided in this Section 8(d) are several in
proportion to their respective underwriting obligations and not joint.
(e) The International Managers severally confirm and the
Company and the Significant Subsidiary acknowledge that the statements with
respect to the public offering of Stock
25
by the International Managers and the last sentence of the third paragraph on
the cover page of, the legend concerning stabilization on page (i) of, and the
fourth, eighth, tenth, sixteenth, twenty-second, twenty-third and twenty-fourth
paragraphs and the stabilization language in paragraphs eleven through fourteen
under the caption "Underwriting" in, the Prospectus are correct and constitute
the only information concerning such International Managers furnished in
writing to the Company by or on behalf of the International Managers
specifically for inclusion in the Registration Statement and the Prospectus.
9. Defaulting International Managers.
If, on the First Delivery Date, any International Manager
defaults in the performance of its obligations under this Agreement, the
remaining non-defaulting International Managers shall be obligated to purchase
the Stock which the defaulting International Manager agreed but failed to
purchase on the First Delivery Date in the respective proportions which the
number of shares of the Stock set opposite the name of each remaining
non-defaulting International Manager in Schedule 1 hereto bears to the total
number of shares of the Stock set opposite the names of all the remaining
non-defaulting International Managers in Schedule 1 hereto; provided, however,
that the remaining non-defaulting International Managers shall not be obligated
to purchase any of the Stock on the First Delivery Date if the total number of
shares of the Stock which the defaulting International Manager or International
Managers agreed but failed to purchase on such date exceeds 9.09% of the total
number of shares of the Stock to be purchased on the First Delivery Date, and
any remaining non-defaulting International Manager shall not be obligated to
purchase more than 110% of the number of shares of the Stock which it agreed to
purchase on the First Delivery Date pursuant to the terms of Section 2. If the
foregoing maximums are exceeded, the remaining non-defaulting International
Managers, or those other underwriters satisfactory to the Lead Managers who so
agree, shall have the right, but shall not be obligated, to purchase, in such
proportion as may be agreed upon among them, all the Stock to be purchased on
the First Delivery Date. If the remaining International Managers or other
underwriters satisfactory to the Lead Managers do not elect to purchase the
shares which the defaulting International Manager or International Managers
agreed but failed to purchase on the First Delivery Date, this Agreement shall
terminate without liability on the part of any non-defaulting International
Manager or the Company, except that the Company and the Significant Subsidiary
will continue to be liable for the payment of expenses to the extent set forth
in Sections 6 and 11. As used in this Agreement, the term "International
Manager" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 9, purchases Stock which a defaulting International Manager agreed
but failed to purchase.
Nothing contained herein shall relieve a defaulting
International Manager of any liability it may have to the Company for damages
caused by its default. If other underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing International Manager, either the Lead
Managers or the Company may postpone the Delivery Date for up to seven full
business days in order to effect any changes that in the opinion of counsel for
the Company or
26
counsel for the International Managers may be necessary in the Registration
Statement, the Prospectus or in any other document or arrangement.
10. Termination. The obligations of the International
Managers hereunder may be terminated by the Lead Managers by notice given to
and received by the Company prior to delivery of and payment for the
International Stock if, prior to that time, any of the events described in
Sections 7(l), 7(m) or 7(n), shall have occurred or if the International
Managers shall decline to purchase the Stock for any reason permitted under
this Agreement.
11. Reimbursement of International Managers' Expenses. If (a)
the Company shall fail to tender the Stock for delivery to the International
Managers by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed, or because any
other condition of the International Managers' obligations hereunder required
to be fulfilled by the Company is not fulfilled, the Company and the
Significant Subsidiary will reimburse the International Managers for all
reasonable out-of-pocket expenses (including fees and disbursements of counsel)
incurred by the International Managers in connection with this Agreement and
the proposed purchase of the International Stock, and upon demand the Company
and the Significant Subsidiary shall pay the full amount thereof to the Lead
Manager(s). If this Agreement is terminated pursuant to Section 9 by reason of
the default of one or more International Managers, the Company and the
Significant Subsidiary shall not be obligated to reimburse any defaulting
International Manager on account of those expenses.
12. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the International Managers, shall be
delivered or sent by mail, telex or facsimile transmission to
Xxxxxx Brothers Inc., Three World Financial Center, New York,
New York 10285, Attention: Syndicate Department (Fax:
212-526-6588), with a copy, in the case of any notice
pursuant to Section 8(c), to the Director of Litigation,
Office of the General Counsel, Xxxxxx Brothers Inc., 0 Xxxxx
Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000;
(b) if to the Company or to the Significant
Subsidiary, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set
forth in the Registration Statement, Attention:
Xxxxxxxxxxx X. Xxxxxxx (Fax: 000-000-0000);
provided, however, that any notice to an International Manager pursuant to
Section 8(c) shall be delivered or sent by mail, telex or facsimile
transmission to such International Manager at its address set forth in its
acceptance telex to the Lead Managers, which address will be supplied to any
other party hereto by the Lead Managers upon request. Any such statements,
requests, notices
27
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 International Managers by Xxxxxx
Brothers Inc. on behalf of the Lead Managers.
13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the International Managers,
the Company, the Significant Subsidiary, 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 contained in this Agreement shall also be deemed to
be for the benefit of the person or persons, if any, who control any
International Manager within the meaning of Section 15 of the Securities Act
and for the benefit of each International Manager (and controlling persons
thereof) who offers or sells any shares of Common Stock in accordance with the
terms of the Agreement Between International Managers and International
Managers and (B) the indemnity agreement of the International Managers
contained in Section 8(c) of this Agreement shall be deemed to be for the
benefit of directors of the Company, officers of the Company who have signed
the Registration Statement and any person controlling the Company within the
meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Significant Subsidiary and the
International Managers 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 Stock and shall remain in full force and effect, regardless
of any investigation made by or on behalf of any of them or any person
controlling any of them.
15. 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.
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
17. 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.
28
18. 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]
29
If the foregoing correctly sets forth the agreement among the
Company, the Significant Subsidiary and the International Managers, please
indicate your acceptance in the space provided for that purpose below.
Very truly yours,
L-3 COMMUNICATIONS HOLDINGS, INC.
By
---------------------------------
Name:
Title:
L-3 COMMUNICATIONS CORPORATION,
the Significant Subsidiary
By
---------------------------------
Name:
Title:
Accepted:
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
BEAR, XXXXXXX INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
X.X. XXXXXXXXX, TOWBIN
For themselves and as Lead Managers
of the several International Managers named
in Schedule 1 hereto
By XXXXXX BROTHERS INTERNATIONAL (EUROPE)
By
--------------------------------------
Authorized Representative
SCHEDULE 1
International Managers Number of Shares
---------------------- ----------------
Xxxxxx Brothers International Europe......................
Bear, Xxxxxxx International Limited.......................
Credit Suisse First Boston (Europe) Limited...............
Xxxxxx Xxxxxxx & Co. International Limited................
X.X. Xxxxxxxxx, Towbin....................................
-----------
Total
===========
31
