EXHIBIT NO. DESCRIPTION
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10.23 Consent and Second Amendment to New 364 Day Credit Agreement dated as of
November 16, 2000 among L-3 Communications Corporation and lenders named
therein (incorporated by reference to Exhibit 10.47 to the Registrant's annual report on
Form 10-K filed on March 15, 2001).
10.24 Consent and Second Amendment to Second Amended and Restated Credit Agreement
dated as of November 16, 2000 among L-3 Communication Corporation and lenders
named therein (incorporated by reference to Exhibit 10.48 to the Registrant's annual
report on Form 10-K filed on March 15, 2001).
10.25 Asset Purchase Agreement relating to the Honeywell TCAS Business by and among
Honeywell Inc., L-3 Communications Corporation and, solely in respect of the
Guaranty in Article XIV, Honeywell International Inc. dated as of February 10, 2000
(incorporated by reference to Exhibit 10.91 to the Registrant's annual report on Form
10-K filed on March 15, 2001).
10.26 Asset Purchase and Sale Agreement, dated January 7, 2000 by and between L-3
Communications Corporation and Raytheon Company (incorporated by reference to
Exhibit 10.92 to the Registrant's annual report on Form 10-K filed on March 15, 2001).
11.1 L-3 Communications Holdings, Inc. Computation of Basic Earnings Per Share and
Diluted Earnings Per Share (incorporated by reference to Exhibit 11 to the Registrant's
annual report on Form 10-K filed on March 15, 2001).
12.1 Ratio of Earnings to Fixed Charges (incorporated by reference to Exhibit 12 to the
Registrant's annual report on Form 10-K filed on March 15, 2001).
21.1 Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to the
Registrant's annual report on Form 10-K filed on March 15, 2001).
*23.1 Consent of PricewaterhouseCoopers LLP.
**23.2 Consent of Simpson Thacher & Bartlett (included in Exhibit 5.1).
**24.1 Powers of Attorney (included on signature page).
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* Filed herewith
** Previously filed
Exhibit 1.1
6,900,000 SHARES
L-3 COMMUNICATIONS HOLDINGS, INC.
COMMON STOCK, $.01 PAR VALUE
UNDERWRITING AGREEMENT
April , 2001
LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
SG COWEN SECURITIES CORPORATION
As Representatives of the several
Underwriters named in Schedule 1
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
L-3 Communications Holdings, Inc., a Delaware corporation (the
"Company"), and Lehman Brothers Capital Partners III, L.P. and
(collectively, the "Lehman Selling Stockholders") propose to sell an aggregate
of 6,000,000 shares (the "Firm Stock") of the Company's Common Stock, par value
$.01 per share (the "Common Stock"). Of the 6,000,000 shares of the Firm Stock,
4,500,000 shares are being sold by the Company and 1,500,000 are being sold by
the Lehman Selling Stockholders. In addition, the Lehman Selling Stockholders
and Frank C. Lanza (together, the "Selling Stockholders") and the Company
propose to grant to the Underwriters named in Schedule 1 hereto (the
"Underwriters") options to purchase up to an aggregate of 900,000 additional
shares of the Common Stock on the terms and for the purposes set forth in
Section 3 (the "Option Stock"), up to 675,000 of which may be purchased from the
Lehman Selling Stockholders as set forth in Section 3, up to 150,000 of which
may be purchased from Frank C. Lanza ("Mr. Lanza") as set forth in Section 3 and
up to 75,000 of which may be purchased from the Company as set forth in Section
3. The Firm Stock and the Option Stock, if purchased, are hereinafter
collectively called the "Stock." As described in the Prospectus (hereinafter
defined), the Company will use the net proceeds from the sale of the Stock to
repay any existing indebtedness under L-3 Communications Corporation's senior
credit facilities (the "Senior Credit Facilities") and for general corporate
purposes, including potential acquisitions. This is to confirm the agreement
concerning the purchase of the Stock from the Company and the Selling
Stockholders by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1, and amendments No. 1 and No.
2 thereto on Form S-1/A, 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 representatives (the "Representatives") of the
Underwriters. As used in this Agreement, "Effective Time" means the time as of
which such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective Date"
means the date of the Effective Time; "Preliminary Prospectus" means each
prospectus included in such registration statement, or amendments thereof,
before it became effective under the Securities Act and any prospectus filed
with the Commission by the Company with the consent of the Representatives
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
6 hereof and deemed to be a part of the registration statement as of the
Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; and "Prospectus" means such final prospectus, as first filed with
the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. If the Company has filed or is required pursuant to the terms
hereof to file a registration statement pursuant to Rule 462(b) under the
Securities Act registering additional shares of Common Stock (a "Rule 462(b)
Registration Statement"), then, unless otherwise specified, any reference herein
to the term "Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus; and no stop order suspending
the effectiveness of the Registration Statement is in effect, and no proceedings
for such purpose are pending before or threatened by the Commission. Any Rule
462(b) Registration Statement filed after the effectiveness of this Agreement
will become effective no later than 10:00 A.M., New York City time, on the date
following this Agreement.
(b) The Registration Statement (other than any Rule 462(b) Registration
Statement to be filed by the Company after the effectiveness of this Agreement)
conforms, and the Prospectus and any further amendments or supplements to the
Registration Statement (including, if the Company is required to file a Rule
462(b) Registration Statement after the effectiveness of this Agreement, such
Rule 462(b) Registration Statement and any amendments thereto) or the Prospectus
will, when they become effective or are filed with the Commission, as the case
may be, conform in all respects to the requirements of the Securities Act and
the Rules and Regulations and did
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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 in order to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein.
(c) The market-related and customer-related data and estimates included
in the Prospectus are based on or derived from sources which the Company
believes to be reliable and accurate.
(d) The Company and each of its subsidiaries (as defined in Section 17)
have been duly organized and are validly existing as corporations or limited
liability companies, as applicable, in good standing under the laws of their
respective jurisdictions of organization, are duly qualified to do business and
are in good standing as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their respective
businesses requires such qualification except for such qualification and good
standing the failure of which, individually or in the aggregate, would not
result in a material adverse effect on the condition (financial or other),
business, prospects, properties, stockholders' equity or results of operations
of the Company and its subsidiaries taken as a whole (a "Material Adverse
Effect"), and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged.
(e) Prior to the delivery of the Stock on the First Delivery Date, the
Company will have an authorized capitalization as set forth in the Prospectus,
and all of the issued shares of capital stock of the Company, including the Firm
Stock being sold by the Lehman Selling Stockholders and the Option Stock subject
to the option granted by the Selling Stockholders, 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 the issuance of the
Securities is not subject to preemptive or similar rights; and (i) approximately
85% of the capital stock of Cardiovascular Computer Systems, Ltd., (ii)
approximately 64% of the membership interests in L-3 Communications Network
Security Systems LLC, (iii) approximately 92% of the capital stock of Microdyne
Corporation, (iv) approximately 53.5% of the capital stock of LogiMetrics, Inc.
and (v) 100% of the issued shares of capital stock of each other subsidiary of
the Company have been duly and validly authorized and issued and are fully paid
and non-assessable and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, other than (A) liens, encumbrances, equities
or claims described in the Prospectus, (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.
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(f) Prior to the delivery of the Stock on the First Delivery Date, the
unissued shares of the Stock to be issued and sold by the Company to the
Underwriters hereunder will have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be duly
and validly issued, fully paid and non-assessable; and the Stock will conform to
the description thereof contained in the Prospectus and the issuance of the
Securities is not subject to preemptive or similar rights.
(g) The Company and L-3 Communications Corporation (the "Significant
Subsidiary") have all necessary corporate right, power and authority to execute
and deliver this Agreement and perform their obligations hereunder; and this
Agreement and the transactions contemplated hereby have been duly authorized,
executed and delivered by the Company and the Significant Subsidiary.
(h) The execution, delivery and performance of this Agreement by the
Company and the Significant Subsidiary and the consummation of the transactions
contemplated hereby will not conflict with or constitute a breach or violation
of any or the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
properties or assets of the Company or any of its subsidiaries is subject that
is material to the financial condition or prospects of the Company and its
subsidiaries, taken as a whole (collectively, the "Material Agreements"), except
for breach of which, individually, or in the aggregate, would not result in a
Material Adverse Effect, nor will such actions result in any violation of the
provisions of the charter, by-laws or other organizational documents of the
Company or any of its subsidiaries or any material law, statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets, provided that the provisions for indemnification and
contribution hereunder and thereunder may be limited by equitable principles and
public policy considerations; and except for the registration of the Stock under
the Securities Act and such consents, approvals, authorizations, registrations
or qualifications as may be required under the 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 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 by the Company and the
Significant Subsidiary and the consummation of the transactions contemplated
hereby.
(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
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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; and all such rights to
include such securities in the securities being registered pursuant to the
Registration Statement have been waived in a manner consistent with the terms
under which they were granted.
(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 option 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 would
result in a Material Adverse Effect, otherwise than as set forth or contemplated
in the Prospectus; and, since such date, there has not been any material change
in the capital stock or material increase in the short-term or long-term debt of
the Company or any of its subsidiaries or any material adverse change, or any
development involving or which would reasonably be expected to involve a
Material Adverse Effect, otherwise than as described or contemplated in the
Prospectus.
(l) The historical and pro forma financial statements, together with
the related notes, set forth in the Prospectus comply as to form in all material
respects with the requirements of Regulation S-X under the Securities Act
applicable to registration statements on Form S-1 under the Securities Act. The
historical consolidated financial statements of the Company and the Significant
Subsidiary 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, in accordance with generally accepted accounting
principles consistently applied throughout such periods. Such pro forma
financial statements have been prepared on a basis consistent with such
historical statements of the Company, except for the pro forma adjustments
specified therein, and give effect to assumptions made on a reasonable basis and
in good faith and present fairly the historical and proposed transactions
contemplated by the Prospectus 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
predecessors) and, in all material respects, have been prepared on a basis
consistent with such books and records of the Company (or its predecessor),
except as disclosed therein.
(m) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who have
delivered the initial letter referred to in Section 9(i) hereof, are independent
public accountants as required by the Securities Act and the Rules and
Regulations promulgated thereunder
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during the periods covered by the financial statements on which they reported
contained in the Prospectus.
(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 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.
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(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) subject to Title IV of ERISA for which the Company would have
any material liability; the Company has not incurred and does not expect to
incur any material liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any such "pension plan" or (ii) Sections 412
or 4971 of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code") (other than
contributions in the normal course which are not in default); and each such
"pension plan" for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would reasonably be expected to cause the loss of such qualification.
(u) The Company and its subsidiaries have filed all federal, state and
local income and franchise tax returns required to be filed through the date
hereof and have paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or any of its subsidiaries nor does the
Company have any knowledge of any tax deficiency which, if determined adversely
to the Company and its subsidiaries, might have a Material Adverse Effect.
(v) Neither the Company nor any of its subsidiaries (i) is in violation
of its charter or by-laws or other organizational documents, (ii) is in default
in any material respect, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any Material
Agreement or (iii) is in violation in any material respect of any law,
ordinance, governmental rule, regulation or court decree to which it or its
property or assets may be subject or has failed to obtain any material license,
permit, certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its business,
except as would not, individually or in the aggregate, have a Material Adverse
Effect.
(w) To the best of the Company's knowledge, neither the Company nor any
of its subsidiaries, nor any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of its subsidiaries,
has used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds or violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977; except as such that would not have a
Material Adverse Effect.
(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
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the Company, any of their predecessors in interest) at, upon or from
any of the property now or previously owned or leased by the Company or
its subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial
action which would not have, or would not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial
actions, a Material Adverse Effect; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any
kind onto such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or caused by the Company or any
of its subsidiaries or with respect to which the Company has knowledge,
except for any such spill, discharge, leak, emission, injection,
escape, dumping or release which would not have or would not be
reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect; and the terms "hazardous wastes,"
"toxic wastes," "hazardous substances" and "medical wastes" shall have
the meanings specified in any applicable local, state, federal and
foreign laws or regulations with respect to environmental protection.
(y) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the United States
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
(z) The Company has not taken, directly or indirectly, any
action designed to cause or result in, or which has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company in connection
with this transaction.
(aa) The Stock is of a class of equity securities in which
there is a "bona fide independent market" within the meaning of Section
b(3) of National Association of Securities Dealers ("NASD") Rule 2720
and particularly, is of a class of equity securities which has had at
least two "bona fide independent market markers" within the meaning of
Section b(4) of NASD Rule 2720 for a period of at least 30 trading days
immediately preceding the filing of our registration statement on Form
S-1 under the Securities Act and the Effective time.
2. Representations, Warranties and Agreements of the Selling
Stockholders. Each of the Lehman Selling Stockholders and Mr. Lanza, to the
extent that Mr. Lanza sells shares pursuant to the Underwriters' options to
purchase the Option Stock, severally represents, warrants and agrees that:
(a) Such Selling Stockholder has, and immediately prior to the
First Delivery Date such Selling Stockholder will have, good and
marketable title to the shares of Stock to be sold by such Selling
Stockholder hereunder on such date, free and clear of all liens,
encumbrances, equities or claims; and upon delivery of such shares and
payment therefor pursuant hereto and thereto, good and marketable title
to such shares, free and clear of all
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liens, encumbrances, equities or claims except those that may be
created by the Underwriters, will pass to the several Underwriters.
(b) Such Selling Stockholder has duly executed and delivered a
custody agreement (the "Custody Agreement") with the Company, as
custodian (the "Custodian") and such Selling Stockholder has placed in
custody under the Custody Agreement with the Custodian, for delivery
under this Agreement, certificates in negotiable form (with signature
guaranteed by a commercial bank or trust company having an office or
correspondent in the United States or a member firm of the New York or
American Stock Exchanges) representing the shares of Stock to be sold
by such Selling Stockholder hereunder.
(c) Such Selling Stockholder has duly executed and delivered a
power of attorney (the "Power of Attorney") appointing the Custodian
and one or more other persons, as attorneys-in-fact, with full power of
substitution, and with full authority (exercisable by any one or more
of them) to execute and deliver this Agreement and to take such other
action as may be necessary or desirable to carry out the provisions
hereof on behalf of such Selling Stockholder.
(d) Such Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement; the execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement by such
Selling Stockholder and the consummation by such Selling Stockholder of
the transactions contemplated hereby and thereby will not conflict with
or constitute a breach of, or a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of such
Selling Stockholder is subject, nor will such actions result in any
violation of the provisions of the charter or bylaws or certificate of
formation or partnership agreement or the articles of partnership, as
applicable, of the Selling Stockholder or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property or assets of
such Selling Stockholder; and, except for the registration of the Stock
under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state [or foreign] securities laws in connection
with the purchase and distribution of the Stock by the Underwriters, no
consent, approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement, the Power of
Attorney or the Custody Agreement by such Selling Stockholder and the
consummation by such Selling Stockholder of the transactions
contemplated hereby and thereby.
(e) The Registration Statement and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus, when they become effective or are filed with the
Commission, as the case may be, do not and will not, as of the
applicable Effective Date (as to the Registration Statement and any
amendment
9
thereto) and as of the applicable filing date (as to the Prospectus and
any amendment or supplement thereto) contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided that this representation and warranty is made only as to
information contained in or omitted from the Registration Statement or
the Prospectus under the caption "Selling Stockholders" relating to
such Selling Stockholder.
(f) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the shares of the Stock.
3. Purchase of the Stock by the Underwriters. 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 4,500,000 shares of
the Firm Stock and each Lehman Selling Stockholder, severally and not jointly,
agrees to sell the number of shares of the Firm Stock set forth opposite its
name in Schedule 2 hereto to the several Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase the number of shares
of the Firm Stock set opposite that Underwriter's name in Schedule 1 hereto.
Each Underwriter shall be obligated to purchase from the Company and from each
Lehman Selling Stockholder that number of shares of the Firm Stock which
represents the same proportion of the number of shares of the Firm Stock to be
sold by the Company and each Lehman Selling Stockholder as the number of shares
of the Firm Stock set forth opposite the name of such Underwriter in Schedule 1
represents of the total number of shares of the Firm Stock to be purchased by
all of the Underwriters pursuant to this Agreement. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be rounded
among the Underwriters to avoid fractional shares, as the Representatives may
determine.
In addition, the Company grants to the Underwriters an option to
purchase, in whole or in part, up to 75,000 additional shares of Common Stock
and the Selling Stockholders, severally and not jointly, grant the Underwriters
options to purchase, in whole or in part, up to the number of additional shares
of Option Stock set forth opposite the name of such Selling Stockholder on
Schedule 2 hereto. Such options are granted for the purpose of covering
over-allotments in the sale of Firm Stock and is exercisable as provided in
Section 5 hereof. Shares of Option Stock shall be purchased severally for the
account of the Underwriters in proportion to the number of shares of Firm Stock
set opposite the name of such Underwriters in Schedule 1 hereto. The respective
purchase obligations of each Underwriter with respect to the Option Stock shall
be adjusted by the Representatives so that no Underwriter shall be obligated to
purchase Option Stock other than in 100 share amounts. The price of both the
Firm Stock and any Option Stock shall be $[ ] per share. In the event of any
partial exercise of the Underwriters' options to purchase Option Stock from the
Company and the Selling Stockholders, the Underwriters, severally but not
jointly, will purchase any such shares from each of the parties who have agreed
to sell shares of Option Stock on a pro rata basis based upon the number of
Option Shares such party agrees to sell in Schedule 2 hereto.
10
The Company and the Selling Stockholders shall not be obligated to
deliver any of the Stock to be delivered on any Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein.
4. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the office of Latham & Watkins, 885 Third Avenue
New York, New York 10022 at 10:00 A.M., New York City time, on the fourth full
business day following the date of this Agreement or at such other date or place
as shall be determined by agreement between the Representatives and the Company.
This date and time are sometimes referred to as the "First Delivery Date." On
the First Delivery Date, the Company and the Lehman Selling Stockholders shall
deliver or cause to be delivered certificates representing the Firm Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company and the Lehman Selling Stockholders of the purchase
price by wire transfer in immediately available funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Firm Stock shall be registered in such names and in such
denominations as the Representatives 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 Firm Stock,
the Company and the Lehman Selling Stockholders shall make the certificates
representing the Firm Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "Second Delivery Date" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "Delivery
Date."
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on such Second Delivery
Date. On such Second Delivery Date, the Company
11
and the Selling Stockholders shall deliver or cause to be delivered the
certificates representing the Option Stock to the Representatives for the
account of each Underwriter 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 Underwriter
hereunder. Upon delivery, the Option Stock shall be registered in such names and
in such denominations as the Representatives shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Company and the Selling Stockholders
shall make the certificates representing the Option Stock available for
inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to such Second Delivery
Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives 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 Representatives, 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 Representatives with copies
thereof; to advise the Representatives, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of
the Stock for offering or sale in any jurisdiction, of the initiation
or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use promptly its
reasonable best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters 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 Representatives such number of
the following documents as the Representatives 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
12
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
Representatives 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 Underwriter and to any dealer in
securities as many copies as the Representatives 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
Representatives, 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 Representatives and counsel for the
Underwriters and not to file any such document to which the
Representatives shall reasonably object after having been given
reasonable notice of the proposed filing thereof;
(f) As soon as practicable after the Effective Date, (it being
understood that the Company shall have until at least 410 days after
the end of the Company's current fiscal quarter) to make generally
available to the Company's security holders and to deliver to the
Representatives 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) To use its reasonable efforts to take such action as the
Representatives may reasonably request from time to time to qualify the
Stock for offering and sale under the securities laws of such
jurisdictions as the Representatives may request and to comply with
such laws so as to permit the continuance of sales and dealings therein
in such jurisdictions in the United States for as long as may be
necessary to complete the sale of the Stock; provided, however, that in
connection therewith, the Company shall not be required to qualify as a
foreign corporation or otherwise subject itself to taxation in any
jurisdiction in which it is not otherwise so qualified or subject;
(h) For a period of 90 days from the date of the Prospectus,
not to, directly or indirectly, (1) offer for sale, sell, or otherwise
dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition by any person at
any time in the future of) any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock (other
than the Stock and shares issued pursuant to currently outstanding
options, warrants, rights or convertible
13
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 Lehman
Brothers Inc.; and to cause Mr. Robert V. LaPenta to furnish to the
Representatives, prior to the date of the Prospectus, a letter or
letters, in form and substance satisfactory to counsel for the
Underwriters, 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 90 days from the date of the Prospectus except for
transactions by any person other than the Company and its subsidiaries
relating to shares of Common Stock or other securities convertible into
or exchangeable or exercisable for Common Stock acquired in open market
transactions after the completion of the offering of Common Stock
described in the Prospectus or the sale by Mr. LaPenta of up to 300,000
shares of Common Stock, at any time and from time to time beginning 30
days after the Closing Date, without the prior written consent of
Lehman 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 under "Use of Proceeds" 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 A.M., New York City time, on the date following this Agreement
and to pay to the Commission the filing fee for such Rule 462(b)
Registration Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Securities Act.
7. Further Agreements of the Selling Stockholders. Each Lehman Selling
Stockholder and Mr. Lanza agrees:
14
(a) For a period of 90 days from the date of the Prospectus,
not to, directly or indirectly, (1) offer for sale, sell or otherwise
dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition by any person at
any time in the future of) any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock (other
than the Stock 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 Lehman Brothers Inc.;
(b) That the Stock to be sold by such Selling Stockholder
hereunder which is represented by the certificates held in custody for
such Selling Stockholder is subject to the interest of the Underwriters
and the other Selling Stockholders, that the arrangements made by such
Selling Stockholder for such custody are to that extent irrevocable
except as provided in the Custody Agreement, and that the obligations
of such Selling Stockholder hereunder shall not be terminated by any
act of such Selling Stockholder by operation of law or the occurrence
of any other event; and
(c) To deliver to the Representatives prior to the First
Delivery Date a properly completed and executed United States Treasury
Department Form W-8 (if such Selling Stockholder is a non-United States
person) or Form W-9 (if such Selling Stockholder is a United States
person).
8. Expenses. The Company agrees to pay: (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of delivering and distributing the Custody
Agreement and the Power of Attorney; (e) the filing fees incident to securing
any required review by the National Association of Securities Dealers, Inc. of
the terms of sale of the Stock; (f) any applicable listing or other fees; (g)
the fees and expenses of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 6(g) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); and (h) all other costs and expenses incident to
the performance of the obligations of the Company, the Lehman Selling
Stockholders and Mr. Lanza; provided that (x) the Company and the Underwriters
will bear their own "road show" expenses and (y) the Company on the one hand,
and the Underwriters on the other hand, will each bear one half of the cost of
the charter aircraft used in connection with the "road show" relating to the
offering of Common Stock described in the Prospectus.
15
9. Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and the
Selling Stockholders contained herein, to the performance by the Company and the
Selling Stockholders of their respective obligations hereunder, and to each of
the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied with;
and any 462(b) Registration Statement required by this Agreement to be
filed shall have been so filed and become effective.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of any fact which is material or omits to
state any fact which is material and is required to be stated therein
or is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this 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 Underwriters, and the Company and the Selling
Stockholders shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass
upon such matters.
(d) Simpson Thacher & Bartlett shall have furnished to the
Representatives its written opinion, as counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to the effect
that:
(i) The Company and each of its Delaware subsidiaries
have been duly organized and are validly existing as
corporations and in good standing under the laws of Delaware,
and have all corporate power and authority necessary to
conduct their respective businesses as described in the
Registration Statement and the Prospectus;
(ii) All of the outstanding shares of Common Stock of
the Company (including the shares of Stock being delivered on
such Delivery Date) have been duly authorized and all
outstanding shares of Common Stock have been and, upon payment
and delivery in accordance with this Agreement, the Stock will
be validly issued, fully paid and non-assessable; and, all of
the issued shares of capital stock
16
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 book, 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 - Future sales of our common stock
in the public market could lower the stock price," "Risk
Factors - Delaware law and our charter documents may impede or
discourage a takeover, which could cause the market price of
our shares to decline," "Certain Relationships and Related
Transactions," and "Description of Capital Stock," 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 contained in the Prospectus under
the caption "Certain United States Federal Income Tax
Consequences for Non-United States Holders," insofar as they
purport to constitute summaries of matters of United States
federal tax law and regulations or legal conclusions with
respect thereto, constitute accurate summaries of the matters
described therein in all material respects;
(vi) To such counsel's knowledge, there are no
contracts or documents of a character required by the
Securities Act or the rules and regulations thereunder to be
described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement which
are not described or filed as required by the Securities Act
or the rules and regulations thereunder;
(vii) This Agreement has been duly authorized,
executed and delivered by the Company and the Significant
Subsidiary; and
(viii) The issue and sale of the shares of Stock
being delivered on such Delivery Date by the Company and the
compliance by the Company and the Significant Subsidiary, as
applicable, with all of the provisions of this Agreement and
the consummation of the transactions contemplated hereby will
not breach or result in a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument filed as an exhibit to the Registration Statement
nor will such actions violate the Certificate of Incorporation
or By-Laws or other organizational documents of the Company or
any of its subsidiaries or any federal
17
or New York statute, the Delaware Limited Liability Company
Act or the Delaware General Corporation Law or any rule or
regulation that has been issued pursuant to any federal or New
York statute, the Delaware Limited Liability Company Act or
the Delaware General Corporation Law or any order known to
such counsel issued pursuant to any federal or New York
statute, the Delaware Limited Liability Company Act or the
Delaware General Corporation Law by any court or governmental
agency or body or court having jurisdiction over the Company
or any of its subsidiaries or any of their properties or
assets; and no consent, approval, authorization, order,
registration or qualification of or with any federal or New
York governmental agency or body or any Delaware governmental
agency or body acting pursuant to the Delaware Limited
Liability Company Act or the Delaware General Corporation Law
or, to such counsel's knowledge, any federal or New York court
or any Delaware court acting pursuant to the Delaware Limited
Liability Company Act or the Delaware General Corporation Law
is required for the issue and sale of the Stock by the
Company, except for the registration under the Act and the
Exchange Act of the Stock, and such consents, approvals,
authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Stock by the
Underwriters. 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.
In rendering such opinion, such counsel may state
that its opinion is limited to matters governed by the federal
laws of the United States and the laws of the State of New
York, the Delaware General Corporation Law and the Delaware
Limited Liability Company Act.
Such counsel shall also have furnished to the
Representatives a written statement, addressed to the
Underwriters and dated such Delivery Date stating: Such
counsel has not independently verified the accuracy,
completeness or fairness of the statements made or included in
the Registration Statement or the Prospectus and take no
responsibility therefor, except as and to the extent set forth
in paragraph (iv) above. In the course of the preparation by
the Company of the Registration Statement and the Prospectus,
such counsel participated in conferences with certain officers
and employees of the Company, with representatives of
PricewaterhouseCoopers LLP and with counsel to the Company.
Based upon such counsel's examination of the Registration
Statement and the Prospectus, our investigations made in
connection with the preparation of the Registration Statement
and the Prospectus and our participation in the conferences
referred to above, (i) such counsel is of the opinion that the
Registration Statement, as the Effective Date, and the
Prospectus, as of April , 2001, 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
18
express opinion with respect to the financial statements or
other financial data contained in the Registration Statement
or the Prospectus, and (ii) such counsel has no reason to
believe that the Registration Statement, as the 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 as of its date or the
Delivery Date contained or contains any untrue statement of a
material fact or omitted 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) Christopher C. Cambria, General Counsel of the Company,
shall have furnished to the Representatives his written opinion, as
General Counsel to the Company, addressed to the Underwriters and dated
such Delivery Date, in form and substance reasonably satisfactory to
the Representatives, to the effect that:
(i) Other than as set forth in the Prospectus, there
are no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of,
any shares of the Stock pursuant to the Company's charter or
by-laws or any agreement or other instrument known to such
counsel;
(ii) To such counsel's knowledge, the Company and
each of its subsidiaries have good and marketable title to all
property (real and personal) described in the Prospectus as
being owned by them, free and clear of all liens, claims,
security interests or other encumbrances except such as are
described in the Prospectus or, to the extent that any such
liens, claims, security interests or other encumbrances would
not have a Material Adverse Effect (individually or in the
aggregate) and all the material property described in the
Prospectus as being held under lease by the Company and its
subsidiaries is held by them under valid, subsisting and
enforceable leases, with only such exceptions as would not
have a Material Adverse Effect (individually or in the
aggregate);
(iii) To such counsel's knowledge and except as
otherwise disclosed in the Prospectus, there are no legal or
governmental proceedings pending or threatened, against the
Company or any of its subsidiaries or to which the Company or
any of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any
of its subsidiaries, are reasonably likely to cause a Material
Adverse Effect;
(iv) To such counsel's knowledge and except as
otherwise disclosed in the Prospectus there are no contracts,
agreements or understandings between the Company and any
person granting such person the right to require the Company
to include such person's securities in the securities
registered pursuant to the
Registration Statement, and all such rights have been waived
in a manner consistent with the terms under which they were
granted; and
(v) None of the issue and sale of the shares of Stock
being delivered on such Delivery Date by the Company and the
compliance by the Company and the Significant Subsidiary with
all of the provisions of this Agreement and the consummation
of the transactions contemplated hereby requires any consent,
approval, authorization or other order of , or registration or
filing with, any federal court, federal regulatory body,
federal administrative agency or other federal governmental
official having authority over government procurement matters
(provided, that the opinion in this paragraph (v) may be
delivered by other counsel reasonably satisfactory to the
Representatives).
(f) Steven Berkenfeld, Esq. or Kevi Genirs, Esq., as counsel
for the Lehman Selling Stockholders and, to the extent that Mr. Lanza
sells shares pursuant to the Underwriters' options to purchase the
Option Stock, Christopher C. Cambria, Esq., as counsel for Mr. Lanza,
shall have furnished to the Representatives their written opinion(s),
as counsel to such Selling Stockholders, addressed to the Underwriters
and dated the First Delivery Date and such Delivery Date, respectively,
in form and substance reasonably satisfactory to the Representatives,
to the effect that:
(i) Such Selling Stockholders have full right, power
and authority to enter into this Agreement, the Power of
Attorney and the Custody Agreement; the execution, delivery
and performance of this Agreement, the Power of Attorney and
the Custody Agreement by such Selling Stockholders and the
consummation by such Selling Stockholders of the transactions
contemplated hereby and thereby will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which such
Selling Stockholders are a party or by which such Selling
Stockholders are bound or to which any of the property or
assets of such Selling Stockholders are subject, nor will such
actions result in any violation of the provisions of the
charter or bylaws or the articles of partnership, as
applicable, of such Selling Stockholders or any statute or any
order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over such
Selling Stockholders or the property or assets of such Selling
Stockholders; and, except for the registration of the Stock
under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state [or
foreign] securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement, the Power of Attorney or the Custody Agreement by
such Selling Stockholders and the consummation by such Selling
Stockholders of the transactions contemplated hereby and
thereby;
20
(ii) This Agreement has been duly authorized,
executed and delivered by or on behalf of such Selling
Stockholders;
(iii) A Power-of-Attorney and a Custody Agreement
have been duly authorized, executed and delivered by each such
Selling Stockholder and constitute valid and binding
agreements of such Selling Stockholders, enforceable in
accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting creditors' rights
generally, and by general principles of equity, regardless of
whether considered in a proceeding in equity or at law; and
(iv) Upon physical delivery of the shares of Stock to
be sold by each such Selling Stockholder to the Underwriters
in the State of New York with stock powers duly endorsed in
blank by an effective endorsement and payment therefor in
accordance with the terms of this Agreement, the Underwriters
will become the "protected purchaser" (as defined in Section
8-303(a) of the New York Uniform Commercial Code) of such
shares of Stock, free of any "adverse claim" (as defined in
Section 8-102(a)(1) of the New York Uniform Commercial Code).
In rendering such opinion, such counsel may state
that its opinion is limited to matters governed by the federal
laws of the United States of America, the laws of the State of
New York or the State of Maryland, as the case may be, and the
Delaware General Corporation Law and (ii) in rendering the
opinion in Section 9(f)(iv) above, rely upon a certificate of
such Selling Stockholders in respect of matters of fact as to
ownership of and any adverse liens, encumbrances, equities or
claims on the shares of Stock sold by such Selling
Stockholders, provided that such counsel shall furnish copies
thereof to the Representatives and state that they believe
that the Underwriters and they are justified in relying upon
such certificate.
(g) The Representatives shall have received from Latham &
Watkins, counsel for the Underwriters, such opinion or opinions, dated
such Delivery Date, with respect to the issuance and sale of the Stock,
the Registration Statement, the Prospectus and other related matters as
the Representatives 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.
(h) At the time of execution of this Agreement, the
Representatives shall have received from PricewaterhouseCoopers LLP a
letter, in form and substance satisfactory to the Representatives,
addressed to the Underwriters and dated the date hereof (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and under Rule 101 of AICPA's Code of Professional
Conduct and are in compliance with the applicable requirements relating
to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission and (ii) stating, as of the date hereof (or, with
respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in the Prospectus, as of a date
21
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) With respect to the letter referred to in the preceding
paragraph and delivered to the Representatives concurrently with the
execution of this Agreement (the "initial letter"), the Company shall
have furnished to the Representatives a letter (the "bring-down
letter") of such accountants, in form and substance satisfactory to the
Representatives, addressed to the Underwriters and dated such Delivery
Date (i) confirming that they are independent public accountants within
the meaning of the Securities Act and Code of Professional Conduct are
in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving 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
firm with respect to the financial information and other matters
covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(j) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date and delivered on behalf of the
Company, of its Chairman of the Board, its President or a Vice
President and its chief financial officer stating, in form and
substance satisfactory to the Representatives that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct as of the date
given and as of such Delivery Date; and the Company has
complied with all its agreements contained herein; and the
conditions set forth in Sections 9(a) and 9(o) have been
fulfilled; and
(ii) Such officers have carefully examined the
Registration Statement and the Prospectus and, in their
opinion (A) as of the Effective Date, and as of the Delivery
Date, the Registration Statement and Prospectus did not
include any untrue statement of any material fact and did not
omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, 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.
(k) Each of the Selling Stockholders (or the Custodian or one
or more attorneys-in-fact on behalf of each of the Selling
Stockholders) shall have furnished to the Representatives on the First
Delivery Date a certificate, dated the First Delivery Date, signed by,
or on behalf of, each of the Selling Stockholders (or the Custodian or
one or more attorneys-in-fact) stating that the representations and
warranties of each of the Selling Stockholders contained herein are
true and correct as of the First Delivery Date
22
and that each of the Selling Stockholders has complied with all
agreements contained herein to be performed by each of the Selling
Stockholders at or prior to the First Delivery Date.
(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 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 Representatives, so material and adverse as to
make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(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, the American Stock
Exchange or the over-the-counter market, or trading in any securities
of the Company on any exchange shall have been suspended or minimum
prices shall have been established on any such exchange or market by
the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction; (ii) a banking moratorium
shall have been declared by United States Federal or New York 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
Underwriters, impracticable or inadvisable to proceed with the public
offering or delivery of the Stock being delivered on such Delivery Date
on the terms and in the manner contemplated in the Prospectus.
(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.
23
(p) The Representatives shall have received a copy of the
executed Custody Agreement and Power of Attorney from each Selling
Stockholder.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance satisfactory to
counsel for the Underwriters.
10. Indemnification and Contribution.
(a) The Company and the Significant Subsidiary shall jointly
and severally indemnify and hold harmless each Underwriter, its
officers and employees and each person, if any, who controls any
Underwriter 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 Underwriter, 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 Underwriter 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 Underwriter through its
gross negligence or willful misconduct), and shall reimburse each
Underwriter and each such officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably
incurred by that Underwriter, 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 Underwriter furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein, which information consists solely
of the information specified in Section 10(f); provided further, that
the indemnification contained in this paragraph (a) with respect to the
Preliminary Prospectus
24
shall not inure to the benefit of any Underwriter (or to the benefit of
any officers or employees of any Underwriter or of any person
controlling such Underwriter) on account of any such loss, claim,
damage, liability or action arising from the sale of Stock by such
Underwriter 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
Underwriter 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 Underwriter on a
timely basis to permit such sending or giving. The foregoing indemnity
agreement is in addition to any liability which the Company or the
Significant Subsidiary may otherwise have to any Underwriter or to any
officer, employee or controlling person of that Underwriter.
(b) Each Selling Stockholder, severally and not jointly, shall
indemnify and hold harmless each of the Company and each Underwriter,
its officers and employees and each person, if any, who controls the
Company or any Underwriter within the meaning of Section 15 of the
Securities Act, from and against any loss, claim, damage or liability
(including, without limitation, any legal or other expenses reasonably
incurred in connection with defending or investigating any such action
or claim), or any action in respect thereof (including, but not limited
to, any loss, claim, damage or liability or action relating to
purchases and sales of Stock), to which the Company or that
Underwriter, officer, employee or controlling person may become
subject, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement thereto,
any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or the
omission or alleged omission relates to information under the caption
"Selling Stockholders" relating to such Selling Stockholder; provided,
however, that the indemnification contained in this paragraph (b) with
respect to the Preliminary Prospectus shall not inure to the benefit of
the Company or any Underwriter (or to the benefit of any officers or
employees of the Company or any Underwriter or of any person
controlling the Company or such Underwriter) on account of any such
loss, claim, damage, liability or action arising from the sale of Stock
by such Underwriter 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 Underwriter 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 Underwriter on a
timely basis to permit such sending or giving. The foregoing indemnity
agreement is in addition to any liability which the Selling
Stockholders may otherwise have to the Company or any Underwriter or
any officer, employee or controlling person of the Company or that
Underwriter. Notwithstanding
25
any other provision of this Agreement, the liability of each Selling
Stockholder under this Section 10(b) to all such indemnified parties
and under Section 2(e) shall not exceed the net amount received by each
such Selling Stockholder (after deducting any underwriting discount)
from the sale of the Stock pursuant to this Agreement.
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, the Selling Stockholders, the
officers and employees of the Company, each of the directors of the
Company, and each person, if any, who controls the Company or any
Selling Stockholder within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company or any such director of
the Company, officer of the Company or controlling person of the
Company, or Selling Stockholder or controlling person of any Selling
Stockholder may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of,
or is based upon, (i) any untrue statement or alleged untrue statement
of a material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or
supplement thereto, or (B) in any Blue Sky Application or (ii) the
omission or alleged omission to state in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact
required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company
through the Representatives by or on behalf of that Underwriter
specifically for inclusion therein, and shall reimburse the Company and
any such director of the Company, officer of the Company or controlling
person of the Company, or Selling Stockholder or controlling person of
any Selling Stockholder for any legal or other expenses reasonably
incurred by the Company or any such director of the Company, officer of
the Company or controlling person of the Company, or Selling
Stockholder or controlling person of any Selling Stockholder in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition
to any liability which any Underwriter may otherwise have to the
Company or any such director of the Company, officer of the Company,
employee of the Company, or controlling person of the Company or
Selling Stockholder or controlling person of any Selling Stockholder.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action,
the indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under this Section 10, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 10 except to the extent it has been materially prejudiced
by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an
26
indemnified party otherwise than under this Section 10. If any such
claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel reasonably satisfactory to
the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim
or action, the indemnifying party shall not be liable to the
indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment thereof has been
specifically authorized by the indemnifying party in writing, (ii) such
indemnified party shall have been advised by such counsel that there
may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in
the reasonable judgment of such counsel, it is advisable for such
indemnified party to employ separate counsel or (iii) the indemnifying
party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which
case, if such indemnified party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not, in connection
with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys (in addition
to one local counsel) at any time for all such indemnified parties,
which firm shall be designated in writing by Lehman Brothers Inc., if
the indemnified parties under this Section 10 consist of any
Underwriters or any of their respective officers, employees or
controlling persons, or by the Company, if the indemnified parties
under this Section 10 consist of the Company or any of the Company's
directors, officers, employees or controlling persons, or by the
attorney-in-fact under the Power of Attorney, if the indemnified
parties under this Section 10 consist of the Selling Stockholders or
any of their respective officers, employees or controlling persons,
provided that if the Company is the indemnifying party and a Selling
Stockholder is an indemnified party, such firm shall be designated by
such Selling Stockholder rather than the attorney-in-fact. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit 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
27
to indemnify and hold harmless any indemnified party from and against
any loss or liability by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 10
shall for any reason be unavailable to or insufficient to hold harmless
an indemnified party under Section 10(a), 10(b) or 10(c) in respect of
any loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company, the Significant Subsidiary or the Selling
Stockholders on the one hand and the Underwriters on the other from the
offering of the Stock or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company, the
Significant Subsidiary or the Selling Stockholders, on the one hand and
the Underwriters on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or
action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company, the
Significant Subsidiary or the Selling Stockholders, on the one hand and
the Underwriters on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the Stock purchased under this Agreement (before deducting
expenses) received by the Company, the Significant Subsidiary or the
Selling Stockholders, on the one hand, and the total underwriting
discounts and commissions received by the Underwriters with respect to
the shares of the Stock purchased under this Agreement, on the other
hand, bear to the total gross proceeds from the offering of the shares
of the Stock under this Agreement, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company, the
Significant Subsidiary, the Selling Stockholders or the Underwriters,
the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or
omission. For purposes of the preceding two sentences, the net proceeds
deemed to be received by the Company shall be deemed to be also for the
benefit of the Significant Subsidiary and information supplied by the
Company shall also be deemed to have been supplied by the Significant
Subsidiary. The Company, the Significant Subsidiary, the Selling
Stockholders and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 10 were to be
determined by pro rata allocation (even if the Underwriters 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 10
shall be deemed to include, for purposes of this Section 10(e), any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 10(e), no Underwriter
shall be
28
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 Underwriter 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 Underwriters' obligations to contribute as
provided in this Section 10(e) are several in proportion to their
respective underwriting obligations and not joint.
(f) The Underwriters severally confirm and the Company and the
Significant Subsidiary acknowledge that the statements with respect to
the public offering of the Stock by the Underwriters in the [fourth,
fifth, eighth, ninth, eleventh, fourteenth, sixteenth, seventeenth and
the eighteenth] paragraphs under the caption "Underwriting" in the
Prospectus are correct and constitute the only information concerning
such Underwriters furnished in writing to the Company by or on behalf
of the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
11. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 3. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Stock to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the Representatives
do not elect to purchase the shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date, this Agreement
(or, with respect to the Second Delivery Date, the obligation of the
Underwriters to purchase, and of the Company to sell, the Option Stock) shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company or the Selling Stockholders, except that the Company and the Significant
Subsidiary will continue to be liable for the payment of expenses to the extent
set forth in Sections 8 and 13. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in
29
Schedule 1 hereto who, pursuant to this Section 11, purchases Firm Stock which
a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Selling Stockholders for damages
caused by its default. If other underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing Underwriter, either the Representatives
or the Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
12. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
and the Selling Stockholders prior to delivery of and payment for the Firm Stock
if, prior to that time, any of the events described in Sections 9(l), 9(m) or
9(n), shall have occurred or if the Underwriters shall decline to purchase the
Stock for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If (a) the Company or the
Selling Stockholders shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or any Selling Stockholder to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or the Selling Stockholders is
not fulfilled, the Company and the Significant Subsidiary will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Stock, and upon demand the Company
and the Significant Subsidiary shall pay the full amount thereof to the
Representative(s). If this Agreement is terminated pursuant to Section 11 by
reason of the default of one or more Underwriters, the Company and the
Significant Subsidiary shall not be obligated to reimburse any defaulting
Underwriter on account of those expenses.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Lehman 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 10(d), to the Director of Litigation, Office of the
General Counsel, Lehman Brothers Inc., Three World Financial Center,
10th Floor, New York, NY 10285;
(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: Christopher C. Cambria (Fax: 212-805-5494); and
30
(c) if to any Selling Stockholder, shall be delivered or sent
by mail, telex or facsimile transmission to such Selling Stockholder at
the address set forth in the Custody Agreement executed by such Selling
Stockholder;
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Selling Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
Lehman Brothers Inc. on behalf of the Representatives and the Company and the
Underwriters shall be entitled to act and rely on any request, consent, notice
or agreement given or made on behalf of the Selling Stockholders by the
Custodian.
15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Significant Subsidiary, the Selling Stockholders and their respective
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company and the Selling Stockholders contained
in this Agreement shall also be deemed to be for the benefit of the officers and
employees of the Underwriters and the person or persons, if any, who control any
Underwriter within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Underwriters contained in Section 10(c) of this
Agreement shall be deemed to be for the benefit of directors of the Company,
officers of the Company who have signed the Registration Statement and any
person controlling the Company within the meaning of Section 15 of the
Securities Act. Nothing contained in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
15, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
16. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Significant Subsidiary, the Selling
Stockholders and the Underwriters contained in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the Stock and shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any of them or any person controlling any
of them.
17. Definition of the Terms "Business Day" and "Subsidiary." For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the
Securities Act Rules and Regulations.
18. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York for contracts made and to
be fully performed in such state, without regard to its conflict of laws rules.
31
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Signature pages follow]
32
If the foregoing correctly sets forth the agreement among the Company,
the Significant Subsidiary, the Selling Stockholders and the Underwriters,
please indicate your acceptance in the space provided for that purpose below.
Very truly yours,
L-3 COMMUNICATIONS HOLDINGS, INC.,
the Company
By:
------------------------------------
Name:
Title:
L-3 COMMUNICATIONS CORPORATION,
the Significant Subsidiary
By:
------------------------------------
Name:
Title:
THE LEHMAN SELLING STOCKHOLDERS NAMED IN
SCHEDULE 2 TO THIS AGREEMENT
By: ATTORNEY-IN-FACT
By:
------------------------------------
Name:
Title:
FRANK C. LANZA,
AS A SELLING STOCKHOLDER
By: ATTORNEY-IN-FACT
By:
------------------------------------
Name:
Title:
Accepted:
LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
SG COWEN SECURITIES CORPORATION
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By: LEHMAN BROTHERS INC.
By:
-------------------------------------------------
Authorized Representative
SCHEDULE 1
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
Lehman Brothers Inc...............................................
Bear, Stearns & Co. Inc...........................................
Credit Suisse First Boston Corporation............................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..........................................
SG Cowen Securities Corporation...................................
Total 6,000,000
=========
SCHEDULE 2
NUMBER OF SHARES OF
---------------------------
SELLING STOCKHOLDERS FIRM STOCK OPTION STOCK
- -------------------- ---------- ------------
Lehman Brothers Capital Partners III, L.P.........
....................................
Frank C. Lanza.................................... 0 150,000
Total........................................ 1,500,000 825,000
========= =======
LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
SG COWEN SECURITIES CORPORATION
As Representatives of the
several Underwriters
c/o LEHMAN BROTHERS INC.
Three World Financial Center
New York, NY 10285
Dear Sirs:
The undersigned understands that you and certain other firms propose to
enter into an underwriting agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (collectively, the "Underwriters")
of shares (the "Shares") of Common Stock, par value $.01 per share (the "Common
Stock"), of L-3 Communications Holdings, Inc. (the "Company") and that the
Underwriters propose to reoffer the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Lehman
Brothers Inc., the undersigned will not, directly or indirectly, (1) offer for
sale, sell, or otherwise dispose of (or enter into any transaction or device
that is designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock (including,
without limitation, shares of Common Stock that may be deemed to be beneficially
owned by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and shares of Common Stock that may be issued
upon exercise of any option or warrant) or securities convertible into or
exchangeable or exercisable for Common Stock (other than the Shares) owned by
the undersigned on the date of execution of this Lock-Up Letter Agreement or on
the date of the completion of the Offering, or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
for a period of 90 days after the date of the final Prospectus relating to the
Offering except in each case for transactions by any person other than the
Company relating to shares of Common Stock or other securities convertible into
or exchangeable or exercisable for Common Stock acquired in open market
transactions after the completion of the Offering, and except for the sale by
Mr. LaPenta
of up to 300,000 shares of Common Stock, at any time and from time to time
beginning 30 days after the Closing Date (as defined in the Underwriting
Agreement).
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company or the Selling Stockholders
notifies you that it does not intend to proceed with the Offering, if the
Underwriting Agreement does not become effective, or if the Underwriting
Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Shares, we
will be released from our obligations under this Lock-Up Letter Agreement.
It is further understood that the Company and the Underwriters have
represented to the undersigned that each Selling Stockholder and certain
officers and directors of the Company shall be required to execute a Lock-Up
Letter Agreement the terms of which are identical to those contained herein. The
Underwriters and/or the Company will immediately notify the undersigned if any
such Lock-Up Letter Agreement is modified, amended, waived or terminated in a
manner so as to impose less stringent restrictions upon the person to which such
Lock-Up Letter Agreement applies as well as the nature of any such modification,
amendment, waiver or termination and this Lock-Up Letter Agreement shall be
deemed to have been modified, amended, waived or terminated in the same manner
as of the same effective date and time.
The undersigned understands that the Company, the Selling Stockholders
and the Underwriters will proceed with the Offering in reliance on this Lock-Up
Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
By:
------------------------------------
Name:
Title:
Dated:
----------------------------
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the inclusion in this Registration Statement of L-3
Communications Holdings, Inc. and subsidiaries (the "Company") on Form S-1 (File
No. 333-58632) of our report dated February 6, 2001 on our audit of the
consolidated financial statements of the Company as of December 31, 2000 and
1999 and for each of the three years ended December 31, 2000. We also consent to
the reference to us under the heading "Experts" in the Prospectus, which is a
part of this Registration Statement.
/s/ PricewaterhouseCoopers, LLP
1177 Avenue of the Americas
New York, New York
April 25, 2001
