0001021408-01-508266.txt : 20011019
0001021408-01-508266.hdr.sgml : 20011019
ACCESSION NUMBER: 0001021408-01-508266
CONFORMED SUBMISSION TYPE: S-3/A
PUBLIC DOCUMENT COUNT: 3
FILED AS OF DATE: 20011017
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: EDO CORP
CENTRAL INDEX KEY: 0000031617
STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812]
IRS NUMBER: 110707740
STATE OF INCORPORATION: NY
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: S-3/A
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69764
FILM NUMBER: 1760485
BUSINESS ADDRESS:
STREET 1: 60 EAST 42ND STREET
STREET 2: SUITE 5010
CITY: NEW YORK
STATE: NY
ZIP: 10165
BUSINESS PHONE: 2127162000
MAIL ADDRESS:
STREET 1: 14 04 111TH ST
CITY: COLLEGE POINT
STATE: NY
ZIP: 11356-1434
S-3/A
1
ds3a.txt
AMENDMENT NO. 2 TO FORM S-3
As filed with the Securities and Exchange Commission on October 17, 2001.
Registration No. 333-69764
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--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Amendment No. 2
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EDO CORPORATION
(Exact name of registrant as specified in its charter)
New York 3812 11-0707740
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or (Primary Standard Industrial
organization) Classification Code Number)
60 East 42nd Street Suite 5010 New York, NY 10165 (212) 716-2000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
James M. Smith President and Chief Executive Officer 60 East 42nd Street Suite
5010 New York, NY 10165 (212) 716-2000
(Name, address including zip code, and telephone number, including area code,
of agent for service)
With copies to:
Christopher G. Karras, Esq. Eric S. Haueter, Esq.
Sarah B. Gelb, Esq. Sidley Austin Brown & Wood llp
Dechert 555 California Street
4000 Bell Atlantic Tower San Francisco, CA 94104
1717 Arch Street (415) 772-1231
Philadelphia, PA 19103
(215) 994-4000
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended or until this registration statement
shall become effective on such date as the Commission, acting pursuant to such
Section 8(a), may determine.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses to be paid by EDO Corporation in connection with the
distribution of the securities being registered, other than underwriting
discounts and commissions, are as follows:
Amount (1)
----------
Securities and Exchange Commission Registration Fee............... $ 27,779
New York Stock Exchange Listing Fee............................... 25,650
Accounting Fees and Expenses...................................... 75,000
Blue Sky Fees and Expenses........................................ 1,000
Legal Fees and Expenses........................................... 300,000
Printing and Engraving Expenses................................... 250,000
Miscellaneous Fees and Expenses................................... 20,571
--------
Total............................................................. $700,000
========
--------
(1) All amounts are estimates except the SEC filing fee and the New York Stock
Exchange listing fee.
Item 15. Indemnification of Directors and Officers
With certain limitations, Sections 721 through 726 of the Business
Corporation Law of the State of New York permit a corporation to indemnify any
of its directors or officers made, or threatened to be made, a party to an
action or proceeding by reason of the fact that such person was a director or
officer of such corporation unless a judgment or other final adjudication
adverse to the director or officer establishes that his or her acts were
committed in bad faith or were the result of active and deliberative dishonesty
and were material to the cause of action so adjudicated, or that he or she
personally gained in fact financial profit or other advantage to which he or
she was not legally entitled.
Section 402(b) of the Business Corporation Law of the State of New York
permits New York corporations to eliminate or limit the personal liability of
directors to the corporation or its shareholders for damages for any breach of
duty in such capacity except liability (i) of a director (a) whose acts or
omissions were in bad faith, involved intentional misconduct or a knowing
violation of law, (b) who personally gained a financial profit or other
advantage to which he or she was not legally entitled or (c) whose acts
violated certain other provisions of New York law or (ii) for acts or omissions
prior to May 4, 1988.
Our bylaws provide that we shall indemnify any person made, or threatened to
be made, a party to an action or proceeding (other than one by us or in our
right to procure judgement in our favor), whether civil or criminal, including
an action by or in the right of any other corporation which any one of our
directors or officers served in any capacity at our request, by reason of the
fact that he, his testator or interstate, was one of our directors or officers,
or served such other corporation in any capacity, against judgements, fines,
amounts paid in settlement and reasonable expenses, including attorneys' fees
actually and necessarily incurred as a result of such action or proceeding, if
such director or officer acted, in good faith, for a purpose which he
reasonably believed to be in, or, in the case of service of any other
corporation, not opposed to, our best interests and, in criminal actions or
proceedings, in addition, had no reasonable cause to believe that his conduct
was unlawful.
We shall indemnify any person made, or threatened to be made, a party to an
action by us or in our right to procure a judgement in our favor by reason of
the fact that he, his testator or interstate, is or was one of our directors or
officers, or is or was serving at our request as a director or officer of any
other company, against amounts paid in settlement and reasonable expenses,
including attorneys' fees actually and necessarily incurred by him in
connection with the defense or settlement of such action, if such director or
officer acted, in good
II-1
faith, for a purpose which he reasonably believed to be in, or, in the case of
service of any other corporation, not opposed to, our best interests, except
that no indemnification shall be made in respect of a threatened action, or a
pending action which is settled or otherwise disposed of, or any claim, issue
or matter as to which such person shall have been adjudged to be liable to us,
unless and only to the extent that the court in which the action was brought,
or, if no action was brought, any court of competent jurisdiction, determines
upon application that, any court of competent jurisdiction, determines upon
application that, the person is fairly and reasonably entitled to indemnity for
such portion of the settlement amount and expenses as the court deems proper.
We have indemnification agreements with each of our directors [and executive
officers] which sets forth the terms stated in the paragraph above for each
individual. A form of these indemnification agreements is incorporated by
reference to Exhibit 10(d) to our Annual Report on Form 10-K for the year ended
December 31, 1996.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
Incorporated by reference to the Exhibit Index following page II-3.
(b) Financial Statement Schedules
None.
Schedules have been omitted since they are not required or are not
applicable or the required information is shown in the financial statements or
related notes.
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range
II-2
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes:
(1) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant
to section 15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York, New York on
October 17, 2001.
EDO CORPORATION
James M. Smith
By: _______________________________________
James M. Smith
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Name Capacity Date
---- -------- ----
James M. Smith President and Chief Executive October 17, 2001
____________________________________ Officer and Director
James M. Smith (principal executive officer)
Darrell L. Reed Vice President, Finance, October 17, 2001
____________________________________ Treasurer, Chief Financial
Darrell L. Reed Officer and Assistant
Secretary (principal financial
and accounting officer)
* Director October 17, 2001
____________________________________
Robert E. Allen
* Director October 17, 2001
____________________________________
Robert Alvine
* Chairman and Director October 17, 2001
____________________________________
Neil A. Armstrong
* Director October 17, 2001
____________________________________
Mellon C. Baird
* Director October 17, 2001
____________________________________
George M. Ball
* Director October 17, 2001
____________________________________
Robert M. Hanisee
* Director October 17, 2001
____________________________________
Michael J. Hegarty
* Director October 17, 2001
____________________________________
Ronald L. Leach
* Director October 17, 2001
____________________________________
George A. Strutz, Jr.
*Attorney-in-Fact
Darrell L. Reed
_______________________________
Darrell L. Reed
II-4
EXHIBIT INDEX
Exhibit
Number Document
------- --------
1 Underwriting Agreement by and among EDO Corporation, HSBC Bank USA, as
the trustee of the EDO Employee Stock Ownership Plan, First Union
Securities, Inc. and SG Cowen Securities Corporation.
2(a)+ Agreement and Plan of Merger by and among EDO Corporation, EDO
Acquisition III Corporation and AIL Technologies, Inc. as amended and
restated dated January 2, 2000, incorporated by reference to Exhibit
2(a) to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999.
2(b)+ Management Stock Purchase Agreement dated as of January 2, 2000
between EDO Corporation as Buyer and eleven individuals as Sellers,
relating to the purchase and sale of shares of common shares of AIL
Technologies, Inc. incorporated by reference to Exhibit 2(b) to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999.
2(c)+ Stock Purchase Agreement dated as of January 2, 2000 between EDO
Corporation, as Buyer, and Defense Systems Holding Co., as Seller,
relating to the purchase and sale of shares of common shares of AIL
Technologies, Inc. incorporated by reference to Exhibit 2(c) to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999.
4(a)+ Credit Agreement, dated as of August 24, 2000, by and among EDO
Corporation and AIL Systems, Inc., with European American Bank and
Mellon Bank, N.A., et al., incorporated by reference to exhibit 4(a)
to the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2000.
4(b)+ Indenture, dated as of December 1, 1986 between Chase Manhattan Bank
as successor in interest to Manufacturers Hanover Trust Company, as
Trustee, and EDO Corporation for the 7% Convertible Subordinated Note
due 2011, incorporated by reference to Exhibit 4(b) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31,
1992.
5(a) Opinion of Dechert
23(a)+ Consent of Ernst & Young LLP, Independent Auditors.
23(b)+ Consent of KPMG LLP, Independent Auditors.
23(c) Consent of Dechert (included in the opinion filed as Exhibit 5(a)).
24(a)+ Power of Attorney (included on signature pages hereto).
--------
* To be filed by amendment
+ Previously filed
EX-1
3
dex1.txt
UNDERWRITING AGREEMENT
Exhibit 1
Draft
________________________________________________________________________________
________________________________________________________________________________
EDO CORPORATION
(a New York corporation)
4,000,000 Common Shares
UNDERWRITING AGREEMENT
----------------------
Dated: October __, 2001
________________________________________________________________________________
________________________________________________________________________________
TABLE OF CONTENTS
Page
----
SCHEDULES
Schedule A - List of Underwriters................................ Sch A-1
Schedule B - List of Number of Securities to be Sold............. Sch B-1
Schedule C - Pricing Information................................. Sch C-1
Schedule D - List of Subsidiaries................................ Sch D-1
Schedule E - List of Persons Subject to Lock-up.................. Sch E-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel................ A-1
Exhibit B - Form of Opinion of Company's Corporate Counsel...... B-1
Exhibit C - Form of Opinion of the Selling Shareholder's
Counsel............................................. C-1
Exhibit D - Form of Lock up Letter.............................. D-1
i
EDO CORPORATION
(a New York corporation)
4,000,000 Common Shares
par value $1 per share
UNDERWRITING AGREEMENT
----------------------
October __, 2001
First Union Securities, Inc.
SG Cowen Securities Corporation
as Representatives of the several Underwriters
c/o First Union Securities, Inc.
One First Union Center, 10/th/ Floor
Charlotte, NC 28289
Ladies and Gentlemen:
EDO Corporation, a New York corporation (the "Company"), and the EDO
-------
Corporation Employee Stock Ownership Trust (together with the Plan (as defined
in Section 1(b)(ii) hereof), the "ESOP"), as selling shareholder (the "Selling
---- -------
Shareholder"), confirm their respective agreements with First Union Securities,
-----------
Inc. ("First Union") and SG Cowen Securities Corporation ("SG Cowen") and each
----------- --------
of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
-------------
hereinafter provided in Section 10 hereof), for whom First Union and SG Cowen
are acting as representatives (in such capacity, the "Representatives"), with
---------------
respect to the issue and sale by the Company and the sale by the Selling
Shareholder, acting severally and not jointly, and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of
Common Shares, par value $1 per share, of the Company (the "Common Shares") set
-------------
forth in Schedule A and B hereto, and with respect to the grant by the Company
to the Underwriters, acting severally and not jointly, of the option described
in Section 2(b) hereof to purchase all or any part of 600,000 additional Common
Shares to cover over-allotments, if any. The aforesaid 4,000,000 Common Shares
(the "Initial Securities") to be purchased by the Underwriters and all or any
------------------
part of the 600,000 Common Shares subject to the option described in Section
2(b) hereof (the "Option Securities") are hereinafter called, collectively, the
-----------------
"Securities".
----------
The Company and the Selling Shareholder understand that the Underwriters
propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-69764) and, if
----------
applicable, one or more amendments thereto covering the registration of the
Securities under the Securities Act of
1933, as amended (the "1933 Act"), including a related preliminary prospectus or
--------
prospectuses. Promptly after execution and delivery of this Agreement, the
Company will prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under the
---------
1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
-------------------- ----
424(b)") of the 1933 Act Regulations. The information included in such
------
prospectus that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information". Each prospectus used before such registration
---------------------
statement became effective, and any prospectus that omitted the Rule 430A
Information that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called, together with the documents
incorporated or deemed to be incorporated by reference therein pursuant to Item
12 of Form S-3 under the 1933 Act, a "preliminary prospectus". Such registration
statement, including the exhibits thereto, the schedules thereto, if any, and
the documents incorporated or deemed to be incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, as amended (if applicable)
at the time it became effective and including the Rule 430A Information, is
herein called the "Registration Statement". Any related registration statement
----------------------
filed by the Company pursuant to Rule 462(b) of the 1933 Act Regulations is
herein referred to as the "Rule 462(b) Registration Statement", and after such
----------------------------------
filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final prospectus, including the documents
incorporated or deemed to be incorporated by reference therein pursuant to Item
12 of Form S-3 under the 1933 Act, in the form first furnished to the
Underwriters for use in connection with the offering of the Securities, is
herein called the "Prospectus". For purposes of this Agreement, all references
----------
to the Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval system ("EDGAR").
-----
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (and all
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in the Registration Statement, any
preliminary prospectus or the Prospectus, as the case may be; and all references
in this Agreement to amendments or supplements to the Registration Statement,
any preliminary prospectus or the Prospectus shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), which is incorporated or deemed to be incorporated by
--------
reference in the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in
2
Section 2(c) hereof, and as of each Date of Delivery (if any) referred to in
Section 2(b) hereof, and agrees with each Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company meets
-----------------------------------------
the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became or
become effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not 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. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement was
issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectus
made in reliance upon and in conformity with information furnished to the
Company in writing by the Selling Shareholder or any Underwriter through
First Union expressly for use in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with this offering was identical to the electronically
transmitted copy thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed
----------------------
to be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
--------------------
with the other information in the Prospectus, at the time the Registration
Statement became
3
effective, at the time the Prospectus was issued and at the Closing Time
(and if any Option Securities are purchased, at the Date of Delivery), did
not and will not 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.
(iii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules included or incorporated by
reference in the Registration Statement and the Prospectus are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iv) Financial Statements. The financial statements of the Company
--------------------
included or incorporated by reference in the Registration Statement and
the Prospectus, together with the related schedules (if any) and notes,
present fairly the financial position of the Company and its consolidated
subsidiaries on the basis stated therein at the dates indicated and the
results of operations, changes in shareholders' equity and cash flows of
the Company and its consolidated subsidiaries for the periods specified;
and such financial statements have been prepared in conformity with
generally accepted accounting principles in the United States ("GAAP")
----
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement
present fairly in accordance with GAAP the information required to be
stated therein. The data appearing in the Registration Statement and the
Prospectus under the captions "Selected Financial Data" and "Prospectus
Summary--Summary Financial and Other Data" present fairly the information
shown therein and have been compiled on an accounting basis consistent with
that of the audited financial statements of the Company included in the
Registration Statement and the Prospectus.
(v) No Material Adverse Change in Business. Since the respective
--------------------------------------
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
-----------------------
been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as
one enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been duly
----------------------------
incorporated and is validly existing as a corporation in good standing
under the laws of the State of New York and has power and authority to own,
lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of
4
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each subsidiary of the Company
-----------------------------
has been duly organized and is validly existing as a corporation, limited
partnership or limited liability company, as the case may be, in good
standing under the laws of the jurisdiction of its organization, has power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation, limited partnership or limited liability company, as the case
may be, to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure
so to qualify or to be in good standing would not result in a Material
Adverse Effect; all of the issued and outstanding capital stock of each
such subsidiary that is a corporation, all of the issued and outstanding
partnership interests of each such subsidiary that is a limited partnership
and all of the issued and outstanding limited liability company interests,
membership interests or other similar interests of each such subsidiary
that is a limited liability company have been duly authorized and validly
issued, are fully paid and non-assessable and are owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity, except as provided
for pursuant to the Credit Agreement dated as of August 24, 2000, among the
Company and AIL Systems, Inc. with European American Bank and Mellon Bank,
NA, et. al.; and none of the outstanding shares of capital stock or other
similar interests of any such subsidiary was issued in violation of any
preemptive rights, rights of first refusal or other similar rights of any
securityholder of such subsidiary. The only material subsidiaries of the
Company are the subsidiaries listed on Schedule D hereto and Schedule D
accurately sets forth whether each such subsidiary is a corporation,
limited partnership or limited liability company and the jurisdiction of
organization of each such subsidiary and, in the case of any subsidiary
which is a partnership, its partners. Any subsidiaries of the Company which
are "significant subsidiaries" as defined by Rule 1-02 of Regulation S-X
are listed on Schedule D hereto under the caption "Material Subsidiaries".
---------------------
(viii) Capitalization. The authorized, issued and outstanding
--------------
capital stock of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances pursuant to this Agreement, pursuant to employee
benefit plans referred to in the Prospectus or pursuant to reservations,
agreements or employee benefits plans referred to in the Prospectus or
pursuant to the exercise of options or conversion of convertible securities
or options referred to in the Prospectus); the shares of issued and
outstanding capital stock of the Company (including the Securities to be
sold by the Selling Shareholder to the Underwriters under this Agreement)
have been duly authorized and validly issued and are fully paid and non-
assessable; and none of the outstanding shares of capital stock of the
Company was issued in violation of any preemptive rights, rights of first
refusal or other similar rights of any securityholder of the Company.
5
(ix) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The Securities to
-------------------------------------------
be issued and sold by the Company have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and, when issued
and delivered by the Company pursuant to this Agreement against payment of
the consideration set forth herein, will be validly issued, fully paid and
non-assessable; the Common Shares, the Company's preferred shares, par
value $1 per share (the "Preferred Shares"), and the Company's charter and
----------------
by-laws, conform in all material respects to all of the respective
statements relating thereto contained or incorporated by reference in the
Prospectus and such statements conform to the rights set forth in the
respective instruments and agreements defining the same; no holder of the
Securities will be subject to personal liability by reason of being such a
holder; the issuance of the Securities is not subject to any preemptive
rights, rights of first refusal or other similar rights of any
securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
---------------------------------
of its subsidiaries is in violation of its Organizational Documents (as
defined below) or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them may be bound, or to which
any of the property or assets of the Company or any of its subsidiaries is
subject (collectively, "Agreements and Instruments"), except for such
--------------------------
defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus
under the caption "Use of Proceeds") and compliance by the Company with its
obligations under this Agreement have been duly authorized by all necessary
action, corporate or other, and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any Agreements and Instruments (except for such
conflicts, breaches or defaults or Repayment Events or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor will
such action result in any violation of the provisions of the Organizational
Documents of the Company or any of its subsidiaries nor any violation of
any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its subsidiaries or
any of their respective assets, properties or operations, except for such
violations that would not result in a Material Adverse Effect. As used
herein, "Organizational Documents" means, in the case of a corporation, its
------------------------
charter and by-laws; in the case of a limited or general partnership, (a)
its partnership certificate, certificate of
6
formation or similar organizational document and (b) its partnership
agreement; in the case of a limited liability company, (c) its articles of
organization, certificate of formation or similar organizational document
and (d) its operating agreement, limited liability company agreement,
membership agreement or other similar agreement; in the case of a trust,
its trust agreement; and, in the case of any other entity, the
organizational documents of such entity; and a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any subsidiary of the
Company.
(xii) Absence of Labor Dispute. No labor dispute with the employees
------------------------
of the Company or any subsidiary of the Company exists or, to the knowledge
of the Company, is imminent which, in any such case, may reasonably be
expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. Except as disclosed in the
----------------------
Prospectus, there is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened,
against or affecting the Company or any of its subsidiaries which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations under this Agreement; the
aggregate of all pending legal or governmental proceedings to which the
Company or any of its subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Material
Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents
--------------------
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated or deemed to be incorporated by
reference therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xv) Possession of Intellectual Property. Except as described in the
Prospectus, the Company and its subsidiaries own or possess, or can acquire
on reasonable terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
---------------------
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances
7
which would render any Intellectual Property invalid or inadequate to
protect the interest of the Company or any of its subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. (A) No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign, (B) no authorization, approval, vote or other consent
of any shareholder of the Company, and (C) no authorization, approval, vote
or other consent of any other person or entity, is necessary or required
for the performance by the Company of its obligations under this Agreement,
for the offering, issuance, sale or delivery of the Securities hereunder,
or for the consummation of any of the other transactions contemplated by
this Agreement, in each case on the terms contemplated by the Prospectus,
except such as have been already obtained under the 1933 Act or the 1933
Act Regulations or such as may be required under state securities laws.
(xvii) Possession of Licenses and Permits. The Company and its
----------------------------------
subsidiaries possess adequate permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by the
---------------------
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them (subject to such
qualifications as may be set forth in the Prospectus or except where the
failure to so possess would not singly or in the aggregate have a Material
Adverse Effect); the Company and its subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate, have a
Material Adverse Effect; all of the Governmental Licenses are valid and in
full force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(xviii) Government Contracts; Absence of Violations. The company and
-------------------------------------------
its subsidiaries are not in (i) violation of, nor, since January 1, 1996,
have been in violation of any applicable law, ordinance, administrative or
governmental rule or regulation of any governmental entity, relating to any
provision regarding kickbacks, procurement integrity, contingent fees,
gratuities to U.S. or foreign government officials, customs, export
control, foreign corrupt practices and protection of classified
information, or (ii) violation of any applicable law, ordinance,
administrative or government rule or regulation of any government entity,
including, but not limited to equal opportunity, treatment of veterans,
payments to employees, cost accounting practices and standards, and
protection of classified information, except where such violation would not
result in a Material Adverse Effect. Since January 1, 1996, no contracts
have been terminated for
8
default or cause by the U.S. or any foreign government, and the Company has
not been suspended or debarred from the performance of government
contracts, nor has it been proposed for suspension or debarment. Since
January 1, 1996, the Company or any of its subsidiaries are not aware of
any investigations of the Company or its subsidiaries, conducted by a
government agency, the Inspector General of the United States, the Federal
Bureau of Investigation, or other governmental investigative entity, to
examine allegations of fraud or any impropriety in the performance of
government contracts.
(xix) Title to Property. The Company and its subsidiaries have good
-----------------
and marketable title in fee simple to all real property owned by any of
them and good title to all other properties owned by any of them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
its subsidiaries; all real property, buildings and other improvements, and
equipment and other property held under lease or sublease by the Company or
any of its subsidiaries is held by them under valid, subsisting and
enforceable leases or subleases, as the case may be, with such exceptions
as are not material and do not interfere with the use made or proposed to
be made of such real and personal property by the Company and its
subsidiaries, and all such leases and subleases are in full force and
effect; and neither the Company nor any of its subsidiaries has any written
notice of any claim of any sort that has been asserted by anyone adverse to
the rights of the Company or any of its subsidiaries under any of the
leases or subleases mentioned above or affecting or questioning the rights
of the Company or any of its subsidiaries to the continued possession of
the leased or subleased premises under any such lease or sublease except
for such claims which, if successfully asserted against the Company or any
of its subsidiaries, would not singly or in the aggregate have a Material
Adverse Effect.
(xx) Investment Company Act. The Company is not, and upon the
----------------------
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
--------
(xxi) Environmental Laws. Except as described in the Prospectus and
------------------
except as would not, singly or in the aggregate, result in a Material
Adverse Effect, (A) neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the
-------------------
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous
9
Materials (collectively, "Environmental Laws"), (B) the Company and its
------------------
subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.
(xxii) Absence of Registration Rights. Except as described in the
------------------------------
Prospectus, other than the Selling Shareholder, there are no persons with
registration rights or other similar rights to have any securities (debt or
equity) (A) registered pursuant to the Registration Statement or included
in the offering contemplated by this Agreement or (B) otherwise registered
by the Company under the 1933 Act.
(xxiii) Parties to Lock-Up Agreements. Schedule E hereto contains a
-----------------------------
true, complete and correct list of all directors and executive officers of
the Company, each of whom has executed and delivered to the Representatives
a lock-up agreement in the form of Exhibit D hereto.
(xxiv) Information Provided by the Company for NASD Purposes. All of
-----------------------------------------------------
the information provided by the Company to the Underwriters or to counsel
for the Underwriters in connection with letters, filings or other
supplemental information provided to NASD Regulation Inc. pursuant to NASD
Conduct Rule 2710 or 2720 is true, complete and correct; and there is a
"bona fide independent market", as defined in Section 2720(a)(3) of the
NASD Conduct Rules, for the Common Shares.
(xxv) New York Stock Exchange. The outstanding Common Shares
-----------------------
(including the Securities to be sold by the Selling Shareholder to the
Underwriters under this Agreement) are duly listed on the New York Stock
Exchange and the Securities being sold hereunder by the Company have been
approved for listing, subject to official notice of issuance, on the New
York Stock Exchange.
(xxvi) Stock Certificates. The Securities to be sold by the Selling
------------------
Shareholder to the Underwriters pursuant to this Agreement are not, and,
upon delivery to the Underwriters, will not be, subject to any stop
transfer instructions or similar restrictions on transfer and the
certificates evidencing such securities do not and, upon delivery to the
Underwriters, will not bear any restrictive legends.
(xxvii) No Right of First Refusal. Neither the Company nor any of
-------------------------
its subsidiaries has any preemptive right, right of first refusal or other
similar right to purchase any of
10
the Securities to be sold by the Selling Shareholder to the Underwriters
pursuant to this Agreement.
(b) Representations and Warranties of the Selling Shareholder. The
Selling Shareholder represents and warrants to, and agrees with each Underwriter
as of the date hereof, as of the Closing Time and as each Date of Delivery (if
any), and agrees with each Underwriter, as follows:
(i) ESOP and Trust. The ESOP is an employee stock ownership plan
--------------
within the meaning of Section 4975(e)(7) of the Internal Revenue Code of
1986, as amended (the "Code"); the trust forming a part of the ESOP has
----
been duly constituted in accordance with valid and binding trust agreements
and instruments ( the "Trust Instruments") and is validly existing.
-----------------
(ii) No Violation. The ESOP is not in material violation of the
------------
Trust Instruments or any other document governing the terms, organization
or administration of the the trust forming a part of the ESOP.
(iii) Due Authorization; Non-Contravention. The execution,
------------------------------------
delivery and performance of this Agreement (including the Pricing
Agreement) and Custody Agreement referred to below, and the consummation of
the transactions contemplated herein and therein (including, without
limitation, the sale of the Securities to be sold by the Selling
Shareholder hereunder), have been duly authorized by all necessary action
on the part of the Selling Shareholder, and such action will not result in
any material violation of, or give rise to any material liability under,
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 4975 of the Code, or result in any material violation
-----
of the provisions of the ESOP.
(iv) Accurate Disclosure. The Selling Shareholder has reviewed
-------------------
and will review, and is and will be familiar with, the Registration
Statement as originally filed with the Commission and all amendments
thereto, if any, and with each preliminary prospectus and the Prospectus
and any amendments or supplements thereto; and, at the respective times the
Registration Statement, any Rule 462(b) Registration Statement or any post-
effective amendment thereto became or becomes effective and at the Closing
Time (and, if any Option Securities are purchased, at the Date of
Delivery), the information relating to the Selling Shareholder (including
the information with respect to the Selling Shareholder's Securities and
any other Common Shares or other securities of the Company which are owned
or held by the Selling Shareholder) that is set forth in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) did not and will not
contain any untrue statement of a material fact and did not and will not
omit to state a material fact necessary in order to make such information
not misleading; all written information furnished or confirmed by or on
behalf of the Selling Shareholder for use in the Registration Statement (or
any amendment thereto) or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) is and will be true, complete and
11
correct; and the Selling Shareholder is not prompted to sell the Securities
to be sold by the Selling Shareholder under this Agreement by any
information concerning the Company or any subsidiary of the Company which
is not set forth in the Prospectus.
(v) Due Execution of Custody Agreement. The Selling Shareholder
----------------------------------
has duly authorized, executed and delivered a Letter of Transmittal and
Custody Agreement (the "Custody Agreement") with the American Stock
-----------------
Transfer and Trust Company, as custodian (the "Custodian"); the Custody
---------
Agreement constitutes a valid and binding obligation of the Selling
Shareholder, enforceable in accordance with its terms; HSBC Bank USA, as
trustee of the EDO Employee Stock Ownership Plan (the "Trustee"), is
-------
authorized to execute and deliver this Agreement and the certificate
referred to in Section 5(j) hereof on behalf of the Selling Shareholder, to
determine the purchase price to be paid by the Underwriters to the Selling
Shareholder for the Securities to be sold by the Selling Shareholder under
this Agreement, to authorize the delivery to the Underwriters of the
Securities to be sold by the Selling Shareholder under this Agreement and
to accept payment therefor, to duly endorse (in blank or otherwise) the
certificate or certificates representing the Securities or a stock power or
powers with respect thereto and otherwise to act on behalf of the Selling
Shareholder in connection with this Agreement and the transactions
contemplated hereby.
(vi) Power and Authority. The Selling Shareholder has full right,
-------------------
power and authority to execute, deliver and perform its obligations under
this Agreement and the Custody Agreement and to sell, transfer and deliver
the Securities to be sold by the Selling Shareholder under this Agreement.
(vii) Good and Valid Title. The Selling Shareholder has and, at
--------------------
the Closing Time, will have good and valid title to the Securities to be
sold by the Selling Shareholder under this Agreement, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, charge, claim or
equity of any kind, other than pursuant to this Agreement and the Trust
Instruments; the Selling Shareholder is and, at the Closing Time, will be
the legal and record owner and will be acting in a fiduciary capacity with
respect to the beneficial owners of such Securities; upon delivery of such
Securities to the Underwriters against payment of the consideration set
forth in this Agreement, assuming that none of the Underwriters has notice
of an "adverse claim" (within the meaning of Section 8-105 of the Uniform
Commercial Code of the State of New York (the "UCC")) with respect to such
---
Securities, each of the Underwriters will receive good and valid title to
the Securities purchased by it from the Selling Shareholder, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, charge,
claim or equity of any kind, will be a "protected purchaser" (within the
meaning of UCC Section 8-303) of such Securities and will have acquired a
"securities entitlement" (within the meaning of UCC Section 8-102(a)(17))
to such Securities, free and clear of any adverse claim.
(viii) Absence of Manipulation. The Selling Shareholder 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
12
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(ix) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, vote, order, registration, qualification
or decree of, any court or governmental authority or agency, domestic or
foreign, or any creditor of the Selling Shareholder or, if applicable, any
of its subsidiaries, or any stockholder, partner, member or securityholder
of or holder of an equity interest in the Selling Shareholder or, if
applicable, any of its subsidiaries, is necessary or required for the
execution or delivery by the Selling Shareholder of, or the performance by
the Selling Shareholder of its obligations under, this Agreement or the
Custody Agreement for the sale and delivery by the Selling Shareholder of
the Securities to be sold by it under this Agreement or for the
consummation by the Selling Shareholder of the other transactions
contemplated by this Agreement or the Custody Agreement, except such as may
be required under the 1933 Act or the 1933 Act Regulations or the 1934 Act
or the 1934 Act Regulations or state securities laws.
(x) Restriction on Sale of Securities. The Selling Shareholder will
---------------------------------
not, without the prior written consent of First Union, offer, sell,
contract to sell, pledge or otherwise dispose of (or enter into any
transaction that is designed to, or might reasonably be expected to, result
in the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Selling Shareholder
or person or entity controlled by or acting on behalf of the Selling
Shareholder or any person in privity with the Selling Shareholder or any
person or entity controlled by or acting on behalf of the Selling
Shareholder), directly or indirectly, including the filing (or
participation in the filing of) a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the 1934 Act, as amended, and the rules and
regulations of the Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into
or exercisable or exchangeable for such capital stock, or publicly announce
an intention to effect any such transaction, for a period beginning on and
including the date of this Agreement through and including the date which
is 90 days after the date of this Agreement; provided, however, that
nothing contained herein shall prohibit (i) the sale by the Selling
Shareholder of its Securities to the Underwriters pursuant to this
Agreement, (ii) the transfer of Common Shares allocated to the Company's
executive officers in their ESOP accounts, (iii) Common shares to be
transferred in the process of being distributed to ESOP participants, (iv)
Common Shares to be transferred by the Selling Shareholder in the ordinary
course of business to satisfy future requests for distributions by
diversifications by retiring or retired participants, and (v) otherwise as
required by ERISA or the Code.
(xi) Certificates Suitable for Transfer. Certificates for all of
----------------------------------
the Securities to be sold by the Selling Shareholder pursuant to this
Agreement, in form suitable for transfer by delivery and accompanied by
duly executed stock powers endorsed in blank by the
13
Selling Shareholder with signatures guaranteed, have been placed in custody
with the Custodian for the purpose of effecting delivery hereunder and
thereunder.
(xii) Absence of Rights of First Refusal. The Selling Shareholder
----------------------------------
has not granted with respect to the Securities to be sold by the Selling
Shareholder under this Agreement, and, to the best of its knowledge, the
Securities to be sold by the Selling Shareholder under this Agreement are
not subject to, any option, warrant, put, call, right of first refusal or
other right to acquire or purchase any such Securities other than pursuant
to this Agreement, except as may be required under Section 409(h) of the
Code.
(xiii) Absence of Preemptive Rights. The Selling Shareholder has
----------------------------
not granted and, to the best of its knowledge, has no preemptive right,
right of first refusal or other similar right to purchase any of the
Securities that are to be sold by the Company pursuant to this Agreement;
and, except for employee stock options, if any, or Common Shares owned by
the Selling Shareholder and accurately described in the Prospectus, the
Selling Shareholder does not own or hold any Common Shares or any
securities convertible into or exchangeable or exercisable for or repayable
with Common Shares, and does not have any right or arrangement to acquire
any capital stock, rights, warrants, options or other securities of the
Company.
(c) Certificates. Any certificate signed by any officer of the Company
or any of its subsidiaries and delivered to the Representatives or counsel for
the Underwriters shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby; and any certificate signed
by or on behalf of the Selling Shareholder and delivered to the Representatives
or counsel for the Underwriters shall be deemed a representation and warranty by
the Selling Shareholder to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, each of the Company and the Selling Shareholder, severally and not
jointly, agrees to sell to each Underwriter, and each Underwriter, severally and
not jointly, agrees to purchase from the Company and the Selling Shareholder, at
the price per share set forth in Schedule C, that proportion of the number of
Initial Securities set forth in Schedule B opposite the name of the Company or
the Selling Shareholder, as the case may be, which the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter, plus
any additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof, bears to
the total number of Initial Securities, subject in each case to such adjustments
among the Underwriters as the Representatives in their sole discretion shall
make to eliminate any sales or purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional
14
600,000 Common Shares at the price per share set forth in Schedule C. The option
hereby granted will expire 30 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering over-
allotments which may be made in connection with the offering and distribution of
the Initial Securities upon notice by the Representatives to the Company setting
forth the number of Option Securities as to which the several Underwriters are
then exercising the option and the time and date of payment and delivery for
such Option Securities. Any such time and date of delivery (a "Date of
-------
Delivery") shall be determined by the Representatives, but shall not be later
--------
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which the number of
Initial Securities set forth in Schedule A opposite the name of such Underwriter
bears to the total number of Initial Securities, subject in each case to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Sidley
Austin Brown & Wood llp, 875 Third Avenue, New York, New York 10022, or at such
other place as shall be agreed upon by the Representatives and the Company, at
10:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30
P.M. (Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time").
------------
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Selling Shareholder by wire transfer of
immediately available funds to a single bank account at the Custodian, which
account shall be designated by the Custodian, and payment shall be made to the
Company by wire transfer of immediately available funds to a bank account
designated by the Company, in each case against delivery to the Representatives
for the respective accounts of the Underwriters of certificates for the
Securities to be purchased by them. It is understood that each Underwriter has
authorized the Representatives, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Initial Securities and the
Option Securities, if any, which it has agreed to purchase. First Union,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Initial Securities
or the Option Securities, if any, to be purchased by any Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such Underwriter from its
obligations hereunder.
15
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A and will notify the Representatives promptly (i) when the
Registration Statement, any Rule 462(b) Registration Statement or any post-
effective amendment to the Registration Statement shall become effective,
or any supplement to the Prospectus or any amended Prospectus shall have
been filed, (ii) of the receipt of any comments from the Commission, (iii)
of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus,
or of the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it
deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)) or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the Representatives with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to
be incorporated by reference therein) and signed copies of all
16
consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period
when the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement and in the Prospectus.
If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that
the Prospectus will not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, after prompt
notifice has been given to the Underwriters, the Company will promptly
prepare and file with the Commission, such amendment or supplement as may
be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and
the Company will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Representatives may
designate and to maintain such qualifications in effect for a period of not
less than one year from the later of the effective date of the Registration
Statement and any Rule 462(b) Registration Statement; provided, however,
that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign
17
corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities offered by the Company in the manner
specified in the Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect and
maintain the listing of the Securities on the New York Stock Exchange and
will file with the New York Stock Exchange all documents and notices
required by the New York Stock Exchange of companies that have securities
that are traded on the New York Stock Exchange.
(j) Restriction on Sale of Securities. The Company will not,
without the prior written consent of First Union, offer, sell, contract to
sell, pledge, or otherwise dispose of, (or enter into any transaction which
is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company) directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act,
any shares of the Common Shares or other capital stock or any securities
convertible into, or exercisable or exchangeable for, the Common Shares or
other capital stock, or publicly announce an intention to effect any such
transaction, for a period beginning on and including the date of this
Agreement through and including the date which is 90 days after the date of
this Agreement; provided, however, that (A) the Company may issue and sell
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Securities pursuant to this Agreement, (B) the Company may issue and sell
Common Shares and options to purchase Common Shares pursuant to any
employee stock purchase plan or stock option plan as in effect on the date
of this Agreement, (C) the Company may issue Common Shares upon the
exercise of stock options outstanding on the date of this Agreement or
issued after the date of this Agreement pursuant to any such stock option
plan as in effect on the date of this Agreement and any amendments thereto
and (D) the Company may file with the Commission a registration statement
on Form S-8, and any amendments thereto, in respect of the shares referred
to in clauses (C) and (D) of this sentence, and (E) the Company may issue
securities pursuant to the conversion or
18
exchange of convertible or exchangeable securities or the exercise of
warrants or options, in each case, outstanding on the date hereof.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the
1934 Act Regulations.
(l) Preparation of Prospectus. Immediately following the execution
of this Agreement, the Company will prepare the Prospectus containing the
Rule 430A Information and other selling terms of the Securities, the plan
of distribution thereof and such other information as may be required by
the 1933 Act or the 1933 Act Regulations or as the Representatives and the
Company may deem appropriate, and will file or transmit for filing with the
Commission, in accordance with Rule 424(b) of the 1933 Act Regulations,
copies of the Prospectus.
SECTION 4. Payment of Expenses.
--------------------
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations and the obligations of the Selling Shareholder
under this Agreement (except for expenses payable by the Selling Shareholder
pursuant to Section 4(b) hereof), including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the word
processing, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the counsel,
accountants and other advisors to the Company and the Selling Shareholder, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection with the
preparation of the Blue Sky Survey and any supplements thereto, (vi) the
printing and delivery to the Underwriters of copies of each preliminary
prospectus and of the Prospectus and any amendments or supplements thereto,
(vii) the preparation, printing and delivery to the Underwriters of copies of
the Blue Sky Survey and any supplements thereto, (viii) the fees and expenses of
the Custodian and the transfer agent or registrar for the Securities, (ix) the
filing fees incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
----
Securities, (x) the fees and expenses incurred in connection with listing of the
Securities for quotation on the New York Stock Exchange, and (xi) the copying of
closing documents.
(b) Expenses of the Selling Shareholder. The Selling Shareholder will
pay the underwriting discounts and commissions set forth on Schedule C hereto
with respect to the Securities sold by it to the Underwriters pursuant to this
Agreement.
19
(c) Allocation of Expenses. Anything herein to the contrary
notwithstanding, the provisions of this Section 4 shall not affect any agreement
that the Company and the Selling Shareholder have made or may make for the
allocation or sharing of such expenses and costs.
(d) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters, reasonably incurred by them in connection with the
offering of the Securities.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
---------------------------------------
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholder
contained in Section 1 hereof or in certificates of any officer of the Company
or any subsidiary of the Company or of or on behalf of the Selling Shareholder
delivered pursuant to the provisions hereof, to the performance by the Company
and the Selling Shareholder of their respective covenants and other obligations
hereunder, in each case, in all material respects, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time (or the applicable Date of Delivery, as the
case may be) no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or, to the knowledge of the Company, threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with, subject to the reasonable
comments of counsel to the Underwriters. The Prospectus containing the Rule
430A Information shall have been filed or transmitted for filing with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations within the
time period prescribed by such Rule, and prior to Closing Time the Company
shall have provided evidence satisfactory to the Representatives of such
timely filing or transmittal.
(b) Opinion of Counsel for the Company. At Closing Time, the
Representatives shall have received the favorable opinions, dated as of
Closing Time, of (i) Dechert, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters, to the effect set forth in Exhibit A hereto and to such
further effect as counsel to the Underwriters may reasonably request; and
(ii) Esanu Katsky Korins & Siger, LLP, corporate counsel for the Company,
in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters, to the effect set forth in Exhibit B hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for the Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Sidley Austin Brown & Wood llp, counsel for the
Underwriters, together with signed or
20
reproduced copies of such letter for each of the other Underwriters, in
form and substance reasonably satisfactory to First Union.
(d) Opinion of Counsel for the ESOP. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of McDermott, Will & Emery, counsel for the ESOP, together
with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit C hereto.
(e) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the Chief
Executive Officer of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties of the Company in Section 1(a) hereof are
true and correct with the same force and effect as though expressly made at
and as of Closing Time, (iii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or, to their knowledge,
contemplated by the Commission.
(f) Certificate of the Selling Shareholder. At Closing Time, the
Representatives shall have received a certificate of the Trustee on behalf
of the Selling Shareholder, dated as of Closing Time, to the effect that
(i) the representations and warranties of the Selling Shareholder contained
in Section 1(b) hereof are true and correct in all respects with the same
force and effect as though expressly made at and as of the Closing Time,
(ii) the Selling Shareholder has complied in all material respects with all
agreements and all conditions on its part to be performed under this
Agreement at or prior to Closing Time, and (iii) the Selling Shareholder
has reviewed and is familiar with the Prospectus and any amendments or
supplements thereto and the information relating to the Selling Shareholder
(including the information with respect to the Selling Shareholder's
Securities and any other Common Shares or other securities of the Company
which are owned or held by the Selling Shareholder) that is set forth in
the Prospectus (or any amendment or supplement thereto) does not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make such information not misleading.
(g) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Representatives shall have received from each of Ernst
& Young LLP and KPMG LLP a letter, dated the date of this Agreement and in
form and substance satisfactory to the Representatives, together with
signed or reproduced copies of such letter for each of the other
Underwriters, containing statements and information of the type ordinarily
21
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information of the Company
contained in the Registration Statement and the Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from each of Ernst & Young LLP and KPMG LLP a letter,
dated as of Closing Time and in form and substance satisfactory to the
Representatives, to the effect that they reaffirm the statements made in
the letter furnished pursuant to subsection (e) of this Section, except
that the specified date referred to shall be a date not more than three
business days prior to Closing Time.
(i) Approval of Listing. At Closing Time and each Date of Delivery,
if any, the Securities to be purchased by the Underwriters at such time
shall have been approved for listing on the New York Stock Exchange,
subject only to official notice of issuance.
(j) Lock-up Agreements. Prior to the date of this Agreement, the
Representatives shall have received an agreement substantially in the form
of Exhibit D hereto signed by each of the persons listed in Schedule E
hereto.
(k) No Objection. Prior to the date of this Agreement, the NASD
shall have confirmed that it has not raised any objection with respect to
the fairness and reasonableness of the underwriting terms and arrangements.
(l) Tax Forms. Prior to the Closing Time, the Representatives
shall have received a properly completed and executed United States
Treasury Department Form W-9 or W-8 (or other applicable form) from the
Selling Shareholder.
(m) Conditions to Purchase of Option Securities. In the event that
the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations
and warranties of the Company and the Selling Shareholder contained herein
and the statements in any certificates furnished by the Company or any
subsidiary of the Company or by or on behalf of the Selling Shareholder
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
---------------------
Delivery, of the Chief Executive Officer of the Company and of the chief
financial or chief accounting officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section 5(e) hereof
remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for the Company. The favorable opinion of
----------------------------------
Dechert, counsel for the Company, and Esanu Katsky Korins & Siger, LLP,
corporate counsel for the Company, each in form and substance satisfactory
to counsel for the Underwriters, dated such Date of Delivery (and, if
applicable, accompanied by other opinions of local counsel dated such Date
of Delivery), relating to the Option Securities to be purchased on
22
such Date of Delivery and otherwise to the same effect as the respective
opinions required by Section 5(b) hereof.
(iii) Opinion of Counsel for the Underwriters. The favorable
---------------------------------------
opinion of Sidley Austin Brown & Wood llp, counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from each of Ernst & Young
-------------------------
LLP and KPMG LLP, in form and substance satisfactory to the Representatives
and dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Representatives pursuant to
Section 5(h) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than five
days prior to such Date of Delivery.
(n) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
contained in this Agreement; and all proceedings taken by the Company and
the Selling Shareholder in connection with the issuance and sale of the
Securities as herein contemplated and in connection with the other
transactions contemplated by this Agreement shall be reasonably
satisfactory in form and substance to the Representatives and counsel for
the Underwriters.
(o) Termination of Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the purchase
of Option Securities on a Date of Delivery which is after the Closing Time,
the obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the
Company and the Selling Shareholder at any time at or prior to Closing Time
or by notice to the Company at or prior to such Date of Delivery, as the
case may be, and such termination shall be without liability of any party
to any other party except as provided in Section 4 and except that Sections
1, 6, 7 and 8 shall survive any such termination and remain in full force
and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification by Company. The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule
23
430A Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(e) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
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liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Selling Shareholder or by any Underwriter through First Union expressly for use
in the Registration Statement (or any amendment thereto), including the Rule
430A Information, if applicable, or in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and provided, further, that
-------- -------
this indemnity agreement with respect to any preliminary prospectus shall not
inure to the benefit of any Underwriter from whom the person asserting any such
losses, liabilities, claims, damages or expenses purchased Securities, or any
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any such amendments
or supplements thereto, but excluding documents incorporated or deemed to be
incorporated by reference therein) was not sent or given by or on behalf of such
Underwriter to such person, if such is required by law, at or prior to the
written confirmation of the sale of such Securities to such person and if the
Prospectus (as so amended or supplemented, if applicable) would have corrected
the defect giving rise to such loss, liability, claim, damage or expense, except
that this proviso shall not be applicable if such defect shall have been
corrected in a document which is incorporated or deemed to be incorporated by
reference in the Prospectus.
(b) Indemnification by the Selling Shareholder. The Selling Shareholder
agrees to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act,
24
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section 6, as incurred, but only
resulting from any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment thereto),
including the Rule 430A Information, if applicable, or any omission or alleged
omission therefrom of a material fact required to be stated therein necessary in
order to make the statements therein not misleading, or any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus or Prospectus (or any amendment or supplement thereto), or any
omission or alleged omission therefrom of a material fact required to be stated
therein necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; and only to the extent
that such indemnity would not constitute a non-exempt prohibited transaction
within the meaning of Sections 406 and 408 of ERISA; provided however, that this
----------------
indemnity agreement shall only apply to any loss, liability, claim, damage or
expense to the extent arising out of any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Company by the Selling Shareholder
expressly for use in the Registration Statement (or any amendment thereto),
including the Rule 430A Information, if applicable, or in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); and
provided, further, that this indemnity agreement with respect to any
-----------------
preliminary prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, liabilities, claims, damages or
expenses purchased Securities, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any such amendments or supplements thereto, but excluding
documents incorporated or deemed to be incorporated by reference therein) was
not sent or given by or on behalf of such Underwriter to such person, if such is
required by law, at or prior to the written confirmation of the sale of such
Securities to such person and if the Prospectus (as so amended or supplemented,
if applicable) would have corrected the defect giving rise to such loss,
liability, claim, damage or expense, except that this proviso shall not be
applicable if such defect shall have been corrected in a document which is
incorporated or deemed to be incorporated by reference in the Prospectus.
Notwithstanding the foregoing, the aggregate liability of the Selling
Shareholder pursuant to the provisions of this section and Section 7 shall be
limited to an amount equal to the aggregate purchase price received by the
Selling Shareholder from the sale of the Securities by the Selling Shareholder
hereunder.
(c) Indemnification by Underwriters. Each Underwriter will severally
indemnify and hold harmless the Company, its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, and the Selling Shareholder, its participants, the Trustee and each
person, if any, who controls the Selling Shareholder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section 6, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto) or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter
25
through First Union expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(d) Actions Against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder, except to the extent it is
prejudiced as a result thereof and in any event shall not relieve it from any
liability which it may have otherwise than on account of this indemnity
agreement. After receiving notice and upon request of the indemnified party,
the indemnifying party shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(e) Settlement Without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) hereof effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of such
settlement.
(f) Other Agreements with Respect to Indemnification. The provisions of
this Section 6 shall not affect any agreements among the Company and the Selling
Shareholder with respect to indemnification of each other.
SECTION 7. Contribution. If the indemnification provided for in Section
------------
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party
26
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Selling Shareholder on the one hand and the Underwriters on
the other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Selling Shareholder on the one hand and of the Underwriters on
the other hand in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Selling Shareholder
on the one hand and the Underwriters on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the Selling Shareholder and the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth on the
cover of the Prospectus, bear to the aggregate initial public offering price of
the Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholder on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such 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 or the Selling Shareholder or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The relative benefits received by the Company on the one hand and the
Selling Shareholder on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the Selling Shareholder, in each case as set forth on the cover
of the Prospectus, bear to the aggregate initial public offering price of the
Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Selling
Shareholder on the other hand shall be determined by reference to, among other
things, whether any such 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 or the Selling Shareholder and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company, the Selling Shareholder and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other
27
method of allocation which does not take account of the equitable considerations
referred to above in this Section 7. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 7 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 7, (i) no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission; and (ii) the Selling
Shareholder shall not be required to contribute any amount over an amount equal
to the aggregate purchase price received by the Selling Shareholder from the
sale of the Securities by the Selling Shareholder hereunder.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
The provisions of this Section 7 shall not affect any agreements among the
Company and the Selling Shareholder with respect to contribution between
themselves.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
--------
Agreement or in certificates of officers of the Company or any of its
subsidiaries or by or on behalf of the Selling Shareholder submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Company or by or on behalf of the Selling Shareholder,
and shall survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
--------------------------
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company and the Selling Shareholder, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which
28
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the reasonable judgment of the Representatives,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange or the Nasdaq
Stock Market's National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such market or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority, or (iv) if systems for clearing securities are
materially disrupted, or (v) if a banking moratorium has been declared by either
Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect. If this Agreement is terminated pursuant to Section 10 or if for any
reason the purchase of the Securities is not consummated, the Company and the
Selling Shareholder shall remain responsible for the expenses to be paid or
reimbursed by each of them pursuant to Section 4, and the respective obligations
of the Company, the Selling Shareholder and the Underwriters pursuant to Section
6 shall remain in effect and if any Securities have been purchased hereunder,
the representations and warranties in Section 1 and all obligations under
Section 3 shall also remain in effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
------------------------------------------
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the obligation, by
the Closing Time or Date of Delivery, as the case may be, for defaults under
subsection (a) below, and shall have the right, within 36 hours thereafter for
defaults under subsection (b) below, to make arrangements reasonably
satisfactory to the Company for one or more of the non-defaulting Underwriters,
or any other underwriters, to purchase all, but not less than all, of the
Defaulted Securities in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Representatives shall not have completed such
arrangements within such applicable period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-
defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
29
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to
any Date of Delivery which occurs after the Closing Time, the obligation of
the Underwriters to purchase and of the Company to sell the Option
Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting Underwriter,
except as provided in Section 9(b) (provided that if such default occurs
with regard to the Option Securities after the Closing Time, this Agreement
will not terminte as to the Initial Securities or any Option Securities
purchased prior to such termination).
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the
right to postpone Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
-----------
substituted for an Underwriter under this Section 10.
SECTION 11. Default by the Selling Shareholder. If the Selling
----------------------------------
Shareholder shall fail at Closing Time to sell and deliver the number of
Securities which the Selling Shareholder is obligated to sell hereunder, then
the Underwriters may, at option of the Representatives, by notice from the
Representatives to the Company, either (a) terminate this Agreement without any
liability on the fault of any non-defaulting party except that the provisions of
Sections 1, 4, 6, 7 and 8 shall remain in full force and effect or (b) elect to
purchase the Securities which the Company has agreed to sell hereunder. No
action taken pursuant to this Section 11 shall relieve the Selling Shareholder
so defaulting from liability, if any, in respect of such default.
In the event of a default by the Selling Shareholder as referred to in this
Section 11, each of the Representatives, the Company and the Trustee shall have
the right to postpone Closing Time for a period not exceeding seven days in
order to effect any required change in the Registration Statement or Prospectus
or in any other documents or arrangements.
SECTION 12. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at c/o First Union
Securities, Inc., 7 St. Paul Street, First Floor, Baltimore, MD 21202, attention
of Brit Stephens; and notices to the Company shall be directed to it at 60 East
42/nd/ Street, Suite 5010, New York, New York 10165, attention of William J.
Frost; notice to the Selling Shareholder shall be directed to it in care of
Steven J. Hartman, Jr., HSBC Bank USA, 425 Fifth Avenue, 17/th/ Floor, New York,
New York 10018-2706.
30
SECTION 13. Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon the Underwriters the Company and the Selling Shareholder and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives and the Selling Shareholder and its
respective successors and legal representatives any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters and the Company and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives and the Selling Shareholder
and its respective successors and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
[Signature Page Follows]
31
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, the Company and the Selling Shareholder in accordance with its
terms.
Very truly yours,
EDO CORPORATION
By _______________________________
Name:
Title:
EDO CORPORATION EMPLOYEE STOCK OWNERSHIP TRUST
by: HSBC Bank USA, as Trustee
By _______________________________
Name:
CONFIRMED AND ACCEPTED,
as of the date first above written:
FIRST UNION SECURITIES, INC.
SG COWEN SECURITIES CORPORATION
By: FIRST UNION SECURITIES, INC.
By __________________________________
Authorized Signatory
For themselves and as Representatives of the Underwriters named in Schedule A
hereto.
32
SCHEDULE A
Number of Initial
Name of Underwriting Securities
-------------------- ------------------------------
First Union Securities, Inc. .............................. _____________________________
SG Cowen Securities Corporation............................ _____________________________
Total............................................... _____________________________
Sch A-1
SCHEDULE B
Number of Initial
Securities to be Sold
-----------------------------
Company.................................................... _____________________________
Selling Shareholder........................................ _____________________________
Sch B-1
SCHEDULE C
EDO Corporation
4,000,000 Common Shares
(par value $1 per share)
1. The initial public offering price per share for the Securities shall
be $!.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $!, being an amount equal to the initial public
offering price set forth above less $! per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities.
Sch C-1
SCHEDULE D
Material Subsidiaries of the Company
Name Jurisdiction of Organization Type of Entity
---- ---------------------------- --------------
AIL Technologies, Inc. Delaware Corporation
AIL Systems, Inc. Delaware Corporation
Sch D-1
SCHEDULE E
List of Persons Subject to Lock-up
Robert E. Allen
Robert Alvine
Jon A. Anderson
Neil Armstrong
Mellon C. Baird
George M. Ball
Patricia Comiskey
George P. Fox
William J. Frost
Robert M. Hanisee
Michael J. Hegarty
Milo Hyde
Harvey Kreisberg
Ronald L. Leach
Frank Otto
Darrell L. Reed
James M. Smith
George A. Strutz
Sch E-1
Exhibit D
[Form of Lock-Up Agreement]
EDO Corporation
Public Offering of Common Shares
October __, 2001
First Union Securities, Inc.
As Representative of the several Underwriters
One First Union Center, 10/th/ Floor
Charlotte, NC 28288
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between EDO Corporation,
a New York corporation (the "Company"), and you, as representative or one of the
representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Common Shares, $1 par value (the "Common
Shares"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of First Union Securities, Inc. ("First Union"), offer, sell, contract
to sell, pledge or otherwise dispose of (or enter into any transaction that is
designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the undersigned), directly or indirectly, including
the filing (or participation in the filing) of a registration statement with the
Securities and Exchange Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder with respect to, any shares of capital stock of the
Company or any securities convertible into or exercisable or exchangeable for
such capital stock, or publicly announce an intention to effect any such
transaction, for a period beginning on and including the date of the
Underwriting Agreement through and including the date which is 90 days after the
date of the Underwriting Agreement; provided, however, that nothing contained
-------- -------
herein shall prohibit the sale of any Common Shares to the Underwriters pursuant
to the Underwriting Agreement or the exercise of
stock options by the undersigned under the Company's stock option plans for
employees or directors or other purchases by the undersigned of shares of
capital stock of the Company or any securities convertible into or exercisable
or exchangeable for such capital stock under the Company's stock purchase plan
for employees or directors, in each case as such plan is in effect on the date
of the Underwriting Agreement, or any transfer to the Company of shares of
capital stock of the Company or any securities convertible into or exercisable
or exchangeable for such capital stock in payment of all or any portion of the
exercise price of any such stock options exercised by the undersigned under such
stock option plans or the purchase price of any such shares of such capital
stock or other such securities purchased by the undersigned under such stock
purchase plan, in each case as such plan is in effect on the date of the
Underwriting Agreement, and provided, further, however, that the undersigned may
-------- ------- -------
donate or transfer any shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for such capital stock to the
undersigned's immediate family, to a trust the beneficiaries of which are
exclusively the undersigned or members of the undersigned's immediate family, or
to charitable or educational organizations without the prior written consent of
First Union Securities, Inc. if (i) such donation is a bona fide gift, (ii) the
undersigned provides written notice of such gift to First Union Securities,
Inc., and (iii) the donee or transferee agrees to be bound by the terms hereby
and executes and delivers to First Union, prior to or contemporaneously with
such gift, a letter agreement, in form and substance reasonably satisfactory to
First Union Securities, Inc., in substantially the form of this letter
agreement. For purposes of this paragraph, "immediate family" shall mean a
spouse, lineal descendent, father, mother, brother or sister of the transferor.]
If for any reason the Underwriting Agreement shall be terminated prior to
the Closing Date (as defined in the Underwriting Agreement), the agreement set
forth above shall likewise be terminated.
[signature page immediately follows]
In witness whereof, the undersigned has executed and delivered this letter
agreement as of the day and year set forth above.
Yours very truly,
___________________________________________
Print Name:
EX-5
4
dex5.txt
OPINION OF DECHERT
[DECHERT LETTERHEAD APPEARS HERE]
October 16, 2001
EDO Corporation
60 East 42nd Street
Suite 5010
New York, NY 10165
Re: Registration Statement on Form S-3
Registration No. 333-69764
Gentlemen and Ladies:
We have acted as counsel to EDO Corporation, a New York corporation (the
"Company"), in connection with the registration under the Securities Act of
1933, as amended, of 4,000,000 common shares (the "Shares"), par value $1 per
share, of the Company (the "Common Shares") and 600,000 Common Shares (the
"Optional Shares"). The Company has granted the underwriters an option to
purchase the Optional Shares solely to cover over-allotments, if any, in
connection with the offering that is the subject to the registration statement
referred to above (the "Registration Statement"). The Shares and the Optional
Shares will be sold pursuant to an underwriting agreement (the "Underwriting
Agreement"), among the Company, the EDO Employee Stock Ownership Trust (the
"Selling Stockholder"), and First Union Securities, Inc. and SG Cowen Securities
Corporation, as representatives of the several underwriters (the
"Underwriters"), the form of which is included as Exhibit 1 to the Registration
Statement.
We have participated in the preparation of the Registration Statement and have
made such legal and factual examination and inquiry as we have deemed advisable
for the rendering of this opinion. In making our examination we have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals and the conformity to all authentic original documents of all
documents submitted to us as copies.
Based upon and subject to the foregoing, we are of the opinion that with respect
to the Shares and Optional Shares to be sold by the Company, when (i) the
Registration Statement becomes effective, (ii) the Pricing Committee of the
Company's Board of Directors approves the price at which the shares are to be
sold to the Underwriters set forth in the Underwriting Agreement and approves
other matters relating to their issuance and sale, (iii) the Underwriting
Agreement has been duly executed and delivered by the parties thereto and (iv)
certificates representing the Shares and the Optional Shares in the form of the
specimen certificate examined by us have been manually signed by an authorized
officer of the transfer agent and registrar for the Common Shares and registered
by such transfer agent and registrar, and have been delivered to and paid for by
the Underwriters as contemplated
EDO Corporation
October 16, 2001
Page 2
by the Underwriting Agreement, at a price per share not less than the per share
par value of the Common Shares, the issuance and sale of the Shares to be sold
by the Company and Optional Shares will have been duly authorized, and the
Shares to be sold by the Company and the Optional Shares will be validly issued,
fully paid and nonassessable.
The opinion expressed herein is rendered for your benefit in connection with the
transactions contemplated herein. The opinion expressed herein may not be used
or relied on by any other person, nor may this letter or any copies thereof be
furnished to a third party, filed with a government agency, quoted, cited or
otherwise referred to without our prior written consent, except as noted below.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Prospectus contained
therein under the caption "Legal Matters." In giving such consent we do not
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act or under the rules and regulations promulgated
by the Securities and Exchange Commission.
Very truly yours,
Dechert