ITEM 1.01. - Entry Into a Material Definitive Agreement.
On May 28, 2014, L-3 Communications Corporation (the "Company"), a wholly owned
subsidiary of L-3 Communications Holdings, Inc. ("L-3 Holdings"), completed its
underwritten public offering of $350,000,000 aggregate principal amount of 1.50%
Senior Notes due 2017 (the "2017 Notes") and $650,000,000 aggregate principal
amount of 3.95% Senior Notes due 2024 (the "2024 Notes" and, together with the
2017 Notes, the "Notes") pursuant to an underwriting agreement (the
"Underwriting Agreement") among the Company, the subsidiary guarantors named
therein (the "Subsidiary Guarantors") and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Barclays Capital Inc., SunTrust Robinson Humphrey, Inc. and the
other several underwriters named in Schedule A of the Underwriting Agreement.
The Underwriting Agreement has previously been filed as Exhibit 1.1 to the
Company's and L-3 Holdings' Current Report on Form 8-K filed May 16, 2014. In
connection with the issuance of the Notes, on May 28, 2014, the Company and the
Subsidiary Guarantors entered into a Fifth Supplemental Indenture (the "Fifth
Supplemental Indenture") with The Bank of New York Mellon Trust Company, N.A.,
as trustee (the "Trustee"), to an indenture (the "Base Indenture") entered into
on May 21, 2010 (the "Base Indenture", and together with the Fifth Supplemental
Indenture, the "Indenture") with the Trustee.
The 2017 Notes: (i) were issued at a price to the public of 99.851% of their
principal amount, (ii) will bear interest at a fixed rate of 1.50% per year,
payable semi-annually on May 28 and November 28 of each year to holders of
record on the immediately preceding May 14 and November 14, respectively,
beginning on November 28, 2014 and (iii) will mature on May 28, 2017. The 2024
Notes: (i) were issued at a price to the public of 99.445% of their principal
amount, (ii) will bear interest at a fixed rate of 3.95% per year, payable
semi-annually on May 28 and November 28 of each year to holders of record on the
immediately preceding May 14 and November 14, respectively, beginning on
November 28, 2014 and (iii) will mature on May 28, 2024. Interest on the Notes
will accrue from and including May 28, 2014.
The Notes are unsecured senior obligations of the Company and rank equal in
right of payment with all of the Company's other existing and future senior
indebtedness. In addition, the Notes are guaranteed on an unsecured senior basis
by each of the Company's material domestic subsidiaries that guarantees any of
the Company's other indebtedness.
The Company may redeem some or all of the Notes at any time or from time to
time, as a whole or in part, at its option at the prices and on the terms set
forth in the Indenture. In addition, upon the occurrence of a "Change of Control
Triggering Event," as defined in the Indenture, the Company will be required to
make an offer to repurchase the Notes at a price equal to 101% of their
principal amount, plus accrued and unpaid interest to, but not including, the
date of repurchase.
The Indenture also contains covenants that, among other things, limit the
Company's ability and the ability of certain of its subsidiaries to create or
assume certain liens or enter into sale and leaseback transactions, and the
Company's ability to engage in mergers or consolidations or transfer or lease
all or substantially all of its assets. Finally, the Indenture contains
customary events of default.
The sale of the Notes was made pursuant to the Company's and the subsidiary
guarantors' Registration Statement on Form S-3 (File No. 333-188457) (the
"Registration Statement") and the prospectus supplement, dated May 13, 2014, to
the prospectus contained therein dated May 8, 2013.
The Company intends to use a portion of the net proceeds from the offering of
the Notes to fund in its entirety the redemption (and any associated
conversions) of all of L-3 Holdings' outstanding 3.00% Convertible Contingent
Debt Securities due 2035 (the "CODES"), of which the Company is a guarantor. The
remaining net proceeds will be used for general corporate purposes. As of
March 28, 2014, there was approximately $689 million in aggregate principal
amount of CODES outstanding. On May 13, 2014, L-3 Holdings issued a notice of
redemption to holders of the CODES specifying a redemption date of June 2, 2014.
The foregoing description is qualified by reference to the Base Indenture and
Fifth Supplemental Indenture. The Base Indenture is filed as Exhibit 4.1 to the
Registration Statement and the Fifth Supplemental Indenture is filed herewith as
Exhibit 4.2 and such documents are incorporated by reference herein.
ITEM 2.03. - Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth above under Item 1.01 with respect to the Notes is
hereby incorporated by reference into this Item 2.03.
ITEM 8.01. - Other Events.
In connection with the offering of the Notes, as described in response to
Item 1.01 of this Current Report on Form 8-K, the following exhibits are filed
with this Current Report on Form 8-K and are incorporated by reference herein
and into the Registration Statement: (i) the Fifth Supplemental Indenture
(including the forms of 2017 Notes and 2024 Notes), (ii) the legal opinion of
Simpson Thacher & Bartlett LLP, and related consent, (iii) the legal opinion of
Steven M. Post, Senior Vice President, General Counsel and Corporate Secretary
of the Company, and related consent and (iv) information relating to Part II,
Item 14 "Other Expenses of Issuance and Distribution" of the Registration
ITEM 9.01. - Financial Statements and Exhibits.
4.2 Fifth Supplemental Indenture, dated as of May 28, 2014, among L-3
Communications Corporation, the Subsidiary Guarantors and The Bank of
New York Mellon Trust Company, N.A., as Trustee.
4.3 Form of 2017 Notes (included in Exhibit 4.2).
4.4 Form of 2024 Notes (included in Exhibit 4.2).
5.2 Opinion of Simpson Thacher & Bartlett LLP dated May 28, 2014.
5.3 Opinion of Steven M. Post dated May 28, 2014.
23.3 Consent of Simpson Thacher & Bartlett LLP (included in Exhibit 5.2).
23.4 Consent of Steven M. Post (included in Exhibit 5.3).
99.1 Information relating to Part II, Item 14 "Other Expenses of Issuance
and Distribution" of the Registration Statement (File No. 333-188457).