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4,100,000 Shares
KITTY HAWK, INC.
COMMON STOCK, PAR VALUE $0.01 PER SHARE
FORM OF UNDERWRITING AGREEMENT
November __, 1997
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November __, 1997
Xxxxxx Xxxxxxx & Co.
Incorporated
BT Alex. Xxxxx Incorporated
Xxxxx & Xxxxxxxxxxxx, Inc.
Fieldstone FPCG Services, L.P.
c/o Morgan Xxxxxxx & Co.
Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Kitty Hawk, Inc. a Delaware corporation (the "Company") proposes to
issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters") 3,000,000 shares of its common stock, par value $0.01 per
share, and the stockholders of the Company named in Schedule II hereto (each a
"Selling Stockholder") propose to sell to the several Underwriters 1,100,000
shares of common stock, par value $0.01 per share of the Company (collectively,
the "Firm Shares").
It is understood that, subject to the conditions hereinafter stated,
the Firm Shares will be sold to the several Underwriters in connection with the
offering and sale of such Firm Shares. Xxxxxx Xxxxxxx & Co. Incorporated, BT
Alex. Xxxxx Incorporated, Xxxxx & Xxxxxxxxxxxx, Inc. and Fieldstone FPCG
Services, L.P. shall act as representatives (the "Representatives") of the
several Underwriters.
The Company also proposes to issue and sell to the several
Underwriters not more than an additional 615,000 shares of its common stock,
par value $0.01 per share (the "Additional Shares"), if and to the extent that
the Representatives shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to the
Underwriters in Article II hereof. The Firm Shares and the Additional Shares
are hereinafter collectively referred to as the "Shares." The shares of common
stock, par value $0.01 per share, of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"Common Stock."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement relating to the Shares. The
registration statement contains a prospectus to be used in connection with the
offering and sale of the Shares in the United States and Canada to United
States and Canadian Persons. The registration statement as amended at the time
it becomes effective, including the information (if any) deemed to be
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part of the registration statement at the time of effectiveness pursuant to
Rule 430A under the Securities Act of 1933, as amended (the "Securities Act"),
is hereinafter referred to as the "Registration Statement"; the prospectus in
the form first used to confirm sales of Shares is hereinafter referred to as
the "Prospectus."
I.
Reference is made to the Agreement and Plan of Merger, as
amended (the "Merger Agreement"), dated September 22, 1997, among American
International Airways, Inc., a Michigan corporation, Kalitta Flying Service,
Inc., a Michigan corporation, Flight One Logistics, Inc., a Michigan
corporation, O.K. Turbines, Inc., a Michigan corporation and American
International Travel, Inc., a Michigan corporation (collectively, the "Kalitta
Companies"), Xxxxxx Xxxxxxx, the Company, certain subsidiaries of the Company
formed for the sole purpose of effecting the Merger (as defined below) and M.
Xxx Xxxxxxxxxxx. Pursuant to the Merger Agreement, each of the Kalitta
Companies will be merged (collectively, the "Merger") with and into certain
subsidiaries of the Company. As a result of the Merger, each of the Kalitta
Companies will become a wholly owned subsidiary of the Company.
(a) The Company (as used in this Article I, Section (a),
the "Company" means the Company after giving pro forma effect to the
Merger) represents and warrants to each of the Underwriters that:
(i) The Registration Statement has become
effective; no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for
such purpose are pending before or threatened by the
Commission.
(ii) (A) Each part of the Registration Statement,
when such part became effective, did not contain and each such
part, as amended or supplemented, if applicable, will not
contain any 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, (B)
the Registration Statement and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (C) the
Prospectus does not contain and, as amended or supplemented,
if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph
I(a)(ii) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon
information relating to any
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Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(iii) The Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(iv) Each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole.
(v) The authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus.
(vi) The shares of Common Stock outstanding prior
to the issuance of the Shares have been duly authorized and
are validly issued, fully paid and non-assessable.
(vii) The Shares have been duly authorized and,
when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of the Shares will not be
subject to any preemptive or similar rights.
(viii) This Agreement has been duly authorized,
executed and delivered by the Company.
(ix) The Merger Agreement has been duly
authorized, executed and delivered by the Company and,
assuming due authorization, execution and delivery by the
other parties thereto, constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency
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(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar
laws affecting creditors' rights generally and to the effect
of general principles of equity, including without limitation,
concepts of materiality, good faith and fair dealing
(regardless of whether enforcement is considered in a
proceeding in equity or at law).
(x) The execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement and the Merger Agreement will not contravene
any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or
other instrument binding upon the Company or any of its
subsidiaries, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
the Company or any subsidiary (except for any such
contravention that, singly or in the aggregate, would not have
a material adverse effect to the Company and its subsidiaries,
taken as a whole), and, with respect to the Merger Agreement,
other than as contemplated by the Merger Agreement, no
consent, approval, authorization or order of or qualification
with any governmental body or agency is required for the
performance by the Company of its obligations under this
Agreement or the Merger Agreement (except such as may be
required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares and
except for any such failure to receive consent, approval,
authorization, order or qualification that, singly or in the
aggregate, would not have a material adverse effect to the
Company and its subsidiaries, taken as a whole).
(xi) There has not occurred any material adverse
change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or
in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the
Prospectus.
(xii) There are no legal or governmental
proceedings pending or threatened to which the Company or any
of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required.
(xiii) Each of the Company and its subsidiaries has
all necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and
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other governmental authorities (including the Federal Aviation
Administration ("FAA") and all non-U.S. regulatory
authorities), all self-regulatory organizations and all courts
and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the
manner described in the Prospectus, except to the extent that
the failure to obtain or file would not have a material
adverse effect on the Company and its subsidiaries, taken as a
whole.
(xiv) Each preliminary 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
Securities Act, complied when so filed in all material
respects with the Securities Act and the rules and regulations
of the Commission thereunder.
(xv) The Company is not and, immediately after the
Transactions and the Refinancings (as such terms are defined
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.
(xvi) The Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state
and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any
such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses
or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries,
taken as a whole.
(xvii) In the ordinary course of its business, the
Company conducts a periodic review of the effect of
Environmental Laws on the business, operations and properties
of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and
any potential liabilities to third parties). On the basis of
such review, the Company has reasonably concluded that such
associated costs and liabilities would not, singly or in the
aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
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(xviii) The Company has properly taken all actions,
corporate and otherwise, and obtained all consents of
stockholders, necessary to approve the Merger. The Merger
will occur simultaneously with the closing hereunder.
(xix) Each representation and warranty of the
Company contained in the Merger Agreement is hereby made by
the Company to the Underwriters; provided that indemnification
of the Underwriters by the Company pursuant to Article VII
hereof in connection with a breach of any representation and
warranty contained in the Merger Agreement and made by the
Company to the Underwriters pursuant to this paragraph shall
be limited to the deductible applicable to the Company
described under Section 10.3.1 of the Merger Agreement and the
cap applicable to the Company described under Section 10.3.2
of the Merger Agreement.
(xx) Schedule III sets forth a true and complete
list of all Indebtedness (as defined in the Indenture related
to the ___% Senior Secured Notes due 2004 (the "Notes")) of
the Company and each of its subsidiaries that will be
outstanding on a pro forma basis after giving effect to the
Transactions and the Refinancings.
(xxi) Neither the Company nor any of its
subsidiaries will be in default under any material agreement
to which the Company or any of its subsidiaries is a party on
a pro forma basis after giving effect to the Transactions and
the Refinancing.
(xxii) The pro forma financial statements and other
pro forma financial information included in the Registration
Statement and the Prospectus present fairly the information
shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma
financial statements, have been properly compiled on the pro
forma bases described therein, and, in the opinion of the
Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to
give effect to the transactions or circumstances referred to
therein.
(xxiii) The Transactions will not constitute a change
of control, reorganization, consolidation, reclassification,
liquidation or a conveyance, transfer or disposal of all or
substantially all of the assets of the Company under any
material agreement to which the Company or any of its
subsidiaries is a party.
(b) Each of the Kalitta Companies represents and warrants
to each of the Underwriters that:
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(i) (A) Each part of the Registration Statement,
when such part became effective, did not contain and each such
part, as amended or supplemented, if applicable, will not
contain any 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, and
(B) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
except that the representations and warranties set forth in
this paragraph I(b)(i) do not apply to statements or omissions
in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly
for use therein.
(ii) Each of the Kalitta Companies has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Kalitta Companies and their
subsidiaries, taken as a whole.
(iii) Each subsidiary of each of the Kalitta
Companies has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Kalitta
Companies and their subsidiaries, taken as a whole.
(iv) This Agreement has been duly authorized,
executed and delivered by each of the Kalitta Companies.
(v) The Merger Agreement has been duly
authorized, executed and delivered by each of the Kalitta
Companies and, assuming due authorization, execution and
delivery by the other parties thereto, constitutes a legal,
valid and binding obligation of each of the Kalitta Companies,
enforceable against each of the Kalitta Companies in
accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting
creditors' rights generally and to the effect of general
principles of
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equity, including without limitation, concepts of materiality,
good faith and fair dealing (regardless of whether enforcement
is considered in a proceeding in equity or at law).
(vi) The execution and delivery by the Kalitta
Companies of, and the performance by each of the Kalitta
Companies of their obligations under, this Agreement and the
Merger Agreement will not contravene any provision of
applicable law or the articles of incorporation or by-laws of
any of the Kalitta Companies or any agreement or other
instrument binding upon any of the Kalitta Companies or any of
their subsidiaries, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
any of the Kalitta Companies or any subsidiary thereof (except
for any such contravention that, singly or in the aggregate,
would not have a material adverse effect to the Company and
its subsidiaries, taken as a whole), and no consent, approval,
authorization or order of or qualification with any
governmental body or agency is required for the performance by
the Kalitta Companies of their obligations under this
Agreement (except such as may be required by the securities or
Blue Sky laws of the various states in connection with the
offer and sale of the Shares and except for any such failure
to receive consent, approval, authorization, order or
qualification that, singly or in the aggregate, would not have
a material adverse effect to the Company and its subsidiaries,
taken as a whole).
(vii) There has not occurred any material adverse
change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or
in the earnings, business or operations of any of the Kalitta
Companies and their subsidiaries, taken as a whole, from that
set forth in the Prospectus.
(viii) There are no legal or governmental
proceedings pending or threatened to which any of the Kalitta
Companies or any of their subsidiaries is a party or to which
any of the properties of any of the Kalitta Companies or any
of their subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and
are not so described or any statutes, regulations, contracts
or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described
or filed as required.
(ix) Each of the Kalitta Companies and their
subsidiaries has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and
has made all declarations and filings with, all federal,
state, local and other governmental authorities (including the
FAA and all non-U.S. regulatory authorities), all
self-regulatory organizations and all courts and other
tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in
the Prospectus, except to the extent that the failure to
obtain or file would not have a material adverse effect on the
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Kalitta Companies and their subsidiaries, taken as a whole.
(x) Each of the Kalitta Companies and their
subsidiaries are (i) in compliance with any and all applicable
foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all
terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in
the aggregate, have a material adverse effect on the Kalitta
Companies and their subsidiaries, taken as a whole.
(xi) In the ordinary course of its business, each
of the Kalitta Companies conducts a periodic review of the
effect of Environmental Laws on the business, operations and
properties of each of the Kalitta Companies and their
subsidiaries in the course of which it identifies and
evaluates associated costs and liabilities, (including,
without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such
review, each of the Kalitta Companies has reasonably concluded
that such associated costs and liabilities would not, singly
or in the aggregate, have a material adverse effect on the
Kalitta Companies and their subsidiaries, taken as a whole.
(xii) Each of the Kalitta Companies has properly
taken all actions, corporate and otherwise, and obtained all
consents of stockholders, necessary to approve the Merger.
The Merger will occur simultaneously with the closing
hereunder.
(xiii) Each representation and warranty of each of
the Kalitta Companies contained in the Merger Agreement is
hereby made by each of the Kalitta Companies to the
Underwriters.
(xiv) Schedule IV sets forth a true and complete
list of all Indebtedness of the Kalitta Companies and their
subsidiaries that will be outstanding on a pro forma basis
after giving effect to the Transactions and the Refinancings.
(xv) Neither any of the Kalitta Companies nor any
of their subsidiaries will be in default under any material
agreement on a pro forma basis after giving effect to the
Transactions and the Refinancings.
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(xvi) The pro forma financial statements and other
pro forma financial information included in the Registration
Statement and the Prospectus present fairly the information
shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma
financial statements, have been properly compiled on the pro
forma bases described therein, and, in the opinion of the
Kalitta Companies, the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or
circumstances referred to therein.
(xvii) The Transactions will not constitute a change
of control, reorganization, consolidation, reclassification,
liquidation or a conveyance, transfer or disposal of all or
substantially all of the assets of the Kalitta Companies under
any material agreement of the Kalitta Companies or any of
their subsidiaries.
(c) Each Selling Stockholder represents and warrants
severally, and not jointly, to each of the Underwriters that:
(i) He now has, and on the Closing Date (as
defined below) will have, good and valid title to the Shares
to be sold by him Stockholder hereunder, free and clear of any
lien, claim, security interest or other encumbrance, including
without limitation, any restriction on transfer.
(ii) He now has, and on the Closing Date will
have, full legal right, power and capacity, and any approval
required by law, to sell, assign, transfer and deliver such
Shares in the manner provided in this Agreement, and upon
delivery of and payment for such Shares hereunder, the several
Underwriters will acquire good and valid title to such Shares
free and clear of any lien, claim, security or other
encumbrance.
(iii) This Agreement has been duly executed and
delivered by him.
(iv) Neither the execution and delivery of this
Agreement by him nor the consummation of the transactions
herein contemplated by him requires any consent, approval,
authorization or order of, or filing or registration with, any
court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be
required under the Act or such as may be required under state
securities or Blue Sky laws governing the purchase and
distribution of the Shares) or contravenes any agreement to
which he is a party or by which he is or may be bound or to
which any of his properties or assets are subject, or any
statute, law, rule, regulation, ruling, judgment, injunction,
order or decree applicable to him or to any of his properties
or assets.
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(v) The Registration Statement and the
Prospectus, insofar as they relate to him, do not and will not
contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading (in
the case of the Prospectus, in the light of the circumstances
under which they were made).
(vi) He does not have knowledge or any reason to
believe that the Registration Statement or the Prospectus (or
any amendment or supplement thereto) contains any untrue
statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading (in the case of the
Prospectus, in the light of the circumstances under which they
were made).
(vii) He has not taken, directly or indirectly, any
action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price
of the Common Stock to facilitate the sale or resale of the
Shares, except for the lock-up arrangements described in the
Prospectus.
(d) Each Underwriter represents and warrants to, and
agrees with, the Company that:
(i) It will not offer or sell, and hereby agrees
not to offer or sell, any Shares, directly or indirectly, in
any province or territory of Canada or to, or for the benefit
of, any resident of any province or territory of Canada in
contravention of the securities laws thereof or of Canada.
(ii) Any offer or sale of Shares in Canada will be
made only pursuant to an exemption from the requirement to
file a prospectus with the Canadian government or in the
province or territory of Canada in which such offer or sale is
made.
(iii) It will send, and hereby agrees to send, to
any dealer who purchases from it any Shares a notice stating,
in substance, that by purchasing such Shares, such dealer
represents and thereby agrees that it has not and will not
offer or sell, directly or indirectly, any such Shares in any
province or territory of Canada or to, or for the benefit of,
any resident of any province or territory of Canada in
contravention of the securities laws thereof or of Canada and
that any offer or sale of Shares in Canada will be made only
pursuant to an exemption from the requirement to file a
prospectus with the Canadian government or in the province or
territory of Canada in which such offer or sale is made, and
that such dealer will deliver to any other dealer to whom it
sells any Shares a notice substantially containing the
foregoing.
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II.
The Company hereby agrees to sell to the several Underwriters,
and the Underwriters, upon the basis of the representations, warranties and
covenants herein contained, but subject to the conditions hereinafter stated,
agree, severally and not jointly, to purchase from the Company the respective
numbers of Firm Shares set forth in Schedule I hereto opposite their names at
U.S.$_____ a share -- the purchase price.
On the basis of the representations, warranties and covenants
contained in this Agreement, and subject to its terms and conditions, the
Company agrees to sell to the Underwriters the Additional Shares, and the
Underwriters shall have a one-time right to purchase, severally and not
jointly, up to 615,000 Additional Shares at the purchase price. Additional
Shares may be purchased as provided in Article IV hereof solely for the purpose
of covering overallotments made in connection with the offering of the Firm
Shares. If any Additional Shares are to be purchased, each Underwriter agrees,
severally and not jointly, to purchase the number of Additional Shares (subject
to such adjustments to eliminate fractional shares as the Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth in Schedule I
hereto opposite the name of such Underwriter bears to the total number of Firm
Shares.
The Company hereby agrees that, without the prior written
consent of the Representatives, during the period ending 90 days after the
date of the Prospectus, it will not (i) register for sale, issue, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend or otherwise transfer or dispose of, directly or indirectly, any
shares of common stock of the Company or any securities convertible into or
exercisable or exchangeable for such common stock (other than shares of common
stock acquired in the open market after the date of the Prospectus) or (ii)
enter into any swap or other arrangement that transfer to another, in whole or
in part, any economic consequences of ownership of the common stock, whether
described in clause (i) or (ii) above is settled by delivery of common stock or
such other securities, in cash or otherwise, other than (x) the Shares to be
sold hereunder and (y) 10,000 shares of such common stock issuable pursuant to
the (as such term is defined in the Prospectus).
III.
The Company is advised by you that the Underwriters propose to
make a public offering of their respective portions of the Shares as soon after
the Registration Statement and this Agreement have become effective as in your
judgment is advisable. The Company is further advised by you that the Shares
are to be offered to the public initially at U.S.$____ a share (the public
offering price) and to certain dealers selected by you at a price that
represents a concession not in excess of U.S.$____ a share under the public
offering price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of
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U.S.$____ a share, to any Underwriter or to certain other dealers.
IV.
Payment for the Firm Shares shall be made in available, same
day funds at the office of Xxxxxx and Xxxxx, LLP, 3100 Nations Bank Plaza, 000
Xxxx Xxxxxx, Xxxxxx, Xxxxx, at 10:00 A.M., local time, on November __, 1997, or
at such other time on the same or such other date, not later than December __,
1997, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the Closing Date.
Payment for any Additional Shares shall be made in immediately
available, same day funds at the office of Xxxxxx and Xxxxx, LLP, 3100 Nations
Bank Plaza, 000 Xxxx Xxxxxx, Xxxxxx, Xxxxx, at 10:00 A.M., local time, on such
date (which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor later than ten business days after the giving
of the notice hereinafter referred to) as shall be designated in a written
notice from the Representatives to the Company of their determination, on
behalf of the Underwriters, to purchase a number, specified in said notice, of
Additional Shares, or on such other date, in any event not later than ______,
1997, as shall be designated in writing by the Representatives. The time and
date of such payment are hereinafter referred to as the "Option Closing Date".
The notice of the determination to exercise the option to purchase Additional
Shares and of the Option Closing Date may be given at any time within 30 days
after the date of this Agreement.
Certificates for the Firm Shares and Additional Shares shall
be in definitive form and registered in such names and in such denominations as
you shall request in writing not later than two full business days prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Shares to the Underwriters duly
paid, against payment of the purchase price therefor by wire transfer of
immediately available funds to the respective bank accounts designated by the
Company and the Selling Stockholders, respectively.
V.
The obligations of the Company, the Kalitta Companies, each
Selling Stockholder and the several obligations of the Underwriters hereunder
are subject to the condition that (i) the Registration Statement shall have
become effective not later than the date hereof, (ii) the prior or concurrent
effectiveness of the Merger and (iii) the prior or concurrent closing of the
offering by the Company of approximately U.S.$340 million aggregate principal
amount of the Notes.
The several obligations of the Underwriters hereunder are
subject to the following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to
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the Closing Date, there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations, of
the Company and its subsidiaries, taken as a whole, or the Kalitta
Companies and their subsidiaries, taken as a whole, from that set
forth in the Registration Statement, that, in your judgment, is
material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus. For the purposes hereof, it is agreed
that (i) the loss of the operating certificate of any of the Company,
its subsidiaries or the Kalitta Companies or their subsidiaries, (ii)
any regulatory order to materially curtail or otherwise materially
limit the use of any of the aircraft of the Company or its
subsidiaries or Kalitta Companies or their subsidiaries or (iii) any
material accident involving any plane of the Company, the Kalitta
Companies or their respective subsidiaries or Kalitta Companies or
their subsidiaries would involve a change in the condition of Company
and its subsidiaries, taken as a whole.
(b) The Underwriters shall have received on the Closing
Date certificates, dated the Closing Date and signed by (i) an
executive officer of the Company (solely in his capacity as such),
(ii) an executive officer each of the Kalitta Companies (solely in his
capacity as such) and (iii) the Selling Stockholder, to the effect
that the representations and warranties of the Company, the Kalitta
Companies and the Selling Stockholder, respectively, contained in this
Agreement are true and correct as of the Closing Date and that the
Company, the Kalitta Companies and the Selling Stockholder,
respectively, has complied with all of the agreements and satisfied
all of the conditions on its part to be performed or satisfied
hereunder by it on or before the Closing Date.
The officer signing and delivering such certificates of the
Company and the Kalitta Companies may rely upon the best of his
knowledge as to proceedings threatened and such certificates will be
expressly so qualified.
(c) You shall have received on the Closing Date opinions
of Xxxxxx and Xxxxx, LLP, counsel for the Company, dated the Closing
Date, to the effect that:
(i) the Company has been duly incorporated, is
validly existing as a Corporation under the laws of the State
of Delaware, has the corporate power and authority to own its
property and to conduct its business as described in the
Prospectus;
(ii) each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus;
(iii) the authorized capital stock of the Company
conforms in all material respects as to legal matters to the
description thereof contained in the Prospectus under the
caption "Description of Capital Stock";
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(iv) the shares of Common Stock outstanding prior
to the issuance of the Shares have been duly authorized and
are validly issued, fully paid and non-assessable;
(v) the Shares have been duly authorized and,
when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of the Shares will not be
subject to any preemptive rights under the certificate of
incorporation of the Company or the Delaware General
Corporation Law or otherwise known to such counsel;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) the Merger Agreement has been duly
authorized, executed and delivered by the Company and,
assuming due authorization, execution and delivery by the
other parties thereto, constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting
creditors' rights generally and to the effect of general
principles of equity, including without limitation, concepts
of materiality, good faith and fair dealing (regardless of
whether enforcement is considered in a proceeding in equity or
at law);
(viii) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement and the Merger Agreement will not contravene
any provision of applicable law or the certificate of
incorporation or by-laws of the Company or, any agreement
listed under Item 10 of the exhibits to the Registration
Statement to which the Company or its subsidiaries is a party
(except for any such contravention that, singly or in the
aggregate, would not have a material adverse effect to the
Company and its subsidiaries, taken as a whole);
(ix) the statements (1) in the Prospectus under
the captions "Description of Capital Stock", "Underwriters"
and "Business-Legal Proceedings" and (2) in the Registration
Statement in Items 14 and 15, in each case insofar as such
statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(x) the Company is not, and immediately after the
Transactions and Refinancings will not be, an "investment
company" or an entity "controlled" by an "investment company,"
as such terms are defined in the Investment Company
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Act of 1940, as amended;
(xi) the Company has properly taken all corporate
actions and obtained all consents of stockholders, necessary
to approve the Merger;
(xii) the Merger will, upon the filing of the
certificate or certificates of merger, be consummated in
accordance with the terms and provisions of the Merger
Agreement;
(xiii) the Registration Statement has become
effective; and
(xiv) such counsel is of the opinion that the
Registration Statement and Prospectus (except for financial
statements and schedules included therein as to which such
counsel need not express any opinion) comply as to form in all
material respects with the Securities Act and the rules and
regulations of the Commission thereunder believes that (except
for financial statements and schedules as to which such
counsel need not express any belief) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective did not contain any
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 and believes that
(except for financial statements and schedules as to which
such counsel need not express any belief) the Prospectus does
not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
Xxxxxx and Xxxxx, LLP shall qualify the foregoing opinion
concerning the enforceability of the Merger Agreement to the effect of
the rules of law described in Section 14 of the American Bar
Association's Third Party Legal Opinion Report and Accord (1991).
Xxxxxx and Xxxxx, LLP shall confirm in its opinion letter (i)
that it has received certificates of good standing dated not earlier
than two days prior to the Closing Date for the Company from the
States of Texas and Delaware, which certificates shall be attached as
an exhibit to such opinion; and (ii) that it has received certificates
of good standing dated not earlier than two days prior to the Closing
Date for each subsidiary of the Company from each state in which any
subsidiary of the Company is incorporated or qualified to do business,
which certificates shall be attached as an exhibit to such opinion.
Xxxxxx and Xxxxx, LLP shall also confirm that, to its knowledge (based
solely upon the investigation described in such opinion letter), the
description (1) in the Prospectus under the caption "Business - Legal
Proceedings - U.S. Postal Service Contract" constitutes a fair summary
in all material respects of such proceedings and (2) in the
Registration Statement in Item 14, insofar as such description contains
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summaries of the documents referenced therein, fairly
presents the information required to be disclosed with respect to such
documents and fairly summarizes the documents referred to therein.
Such counsel shall also state that, although they have not
undertaken, except with respect to "Description of Capital Stock",
"Description of Indebtedness", "Legal Matters", "Business-Legal
Proceedings" and "Shares Eligible for Future Sale", to determine
independently, and does not assume any responsibility for, the
accuracy or completeness of the statements in the Registration
Statement, such counsel has participated in the preparation of the
Registration Statement and the Prospectus, including review and
discussion of the contents thereof, and nothing has come to the
attention of such counsel that has caused it to believe that the
Registration Statement at the time the Registration Statement became
effective, or the Prospectus, as of its date and as of the Closing
Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein, (in the case of the Prospectus, in the light of the
circumstances under which they were made), not misleading or that any
amendment or supplement to the Prospectus, as of its respective date,
and as of the Closing Date or the Option Closing Date, as the case may
be, contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading (it being understood that such counsel need express no
opinion with respect to the financial statements and the notes thereto
and the schedules and other financial data included in the
Registration Statement or the Prospectus).
Xxxxxx and Xxxxx, LLP, may expressly limit the expression of
the foregoing opinions to the laws of the State of Texas, the General
Corporation Law of the State of Delaware and the federal laws of the
United States and may exclude all laws, rules and regulations related
to aviation (including FAA and DOT regulations) and the effect such
laws, rules and regulations may have on such opinions.
(d) You shall have received on the Closing Date opinions
of Xxxxx, Xxxxxx & Xxxxxxx, P.C. counsel for the Company, dated the
Closing Date, to the effect that:
(i) to the best of such counsel's knowledge, the
execution and delivery by the Company of, and performance by
the Company of its obligations under, this Agreement and the
Merger Agreement will not contravene any judgment, or decree
of any governmental body, agency or court having jurisdiction
over the Company or any subsidiary (except for any such
contravention that, singly or in the aggregate, would not have
a material adverse effect to the Company and its subsidiaries,
taken as a whole), and, with respect to the Merger Agreement,
other than as contemplated by the Merger Agreement, no
consent, approval, authorization or order of or qualification
with any governmental body or agency is required for the
performance by the
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Company of its obligations under this Agreement or the Merger
Agreement (except such as may be required by the securities or
Blue Sky laws of the various states in connection with the
offer and sale of the Shares by the Underwriters and except
for such failure to receive consent, approval, authorization,
order or qualification that, singly or in the aggregate, would
not have a material adverse effect to the Company and its
subsidiaries, taken as a whole); and
(ii) after due inquiry, such counsel does not know
of any legal or governmental proceeding pending or threatened
to which the Company or any of its subsidiaries is a party or
to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not so
described or of any statutes, regulations, contracts or other
documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described
or filed as required.
(e) You shall have received on the Closing Date opinions
of Miller, Canfield, Paddock & Stone, P.L.C. counsel for the Kalitta
Companies, dated the Closing Date, to the effect that:
(i) each of the Kalitta Companies has been duly
incorporated, is validly existing as a Corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries
taken as a whole;
(ii) each subsidiary of each of the Kalitta
Companies has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Kalitta
Companies and their subsidiaries taken as a whole;
(iii) this Agreement has been duly authorized,
executed and delivered by each of the Kalitta Companies;
(iv) the Merger Agreement has been duly
authorized, executed and
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delivered by each of the Kalitta Companies and Xxxxxx Xxxxxxx
and, assuming due authorization, execution and delivery by the
other parties thereto, constitutes a legal, valid and binding
obligation of each of the Kalitta Companies and Xxxxxx
Xxxxxxx, enforceable against each of the Kalitta Companies and
Xxxxxx Xxxxxxx in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws
affecting creditors' rights generally and to the effect of
general principles of equity, including without limitation,
concepts of materiality, good faith and fair dealing
(regardless of whether enforcement is considered in a
proceeding in equity or at law);
(v) the execution and delivery by each of the
Kalitta Companies of, and the performance by each of the
Kalitta Companies of its obligations under this Agreement and
the Merger Agreement will not contravene any provision of
applicable law or the certificate of incorporation or by-laws
of any of the Kalitta Companies or, to the best of such
counsel's knowledge, any agreement or other instrument binding
upon any of the Kalitta Companies or any of their
subsidiaries, or, to the best of such counsel's knowledge, any
judgment, or decree of any governmental body, agency or court
having jurisdiction over any of the Kalitta Companies or any
subsidiary (except for any such contravention that, singly or
in the aggregate, would not have a material adverse effect to
the Kalitta Companies and their subsidiaries, taken as a
whole), and no consent, approval, authorization or order of or
qualification with any governmental body or agency is required
for the performance by any of the Kalitta Companies of their
obligations under this Agreement, (except such as may be
required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares by
the Underwriters and except for such failure to receive
consent, approval, authorization, order or qualification that,
singly or in the aggregate, would not have a material adverse
effect to the Kalitta Companies and their subsidiaries, taken
as a whole);
(vi) the statements in the Registration Statement
in Items 14 and 15, in each case insofar as such statements
constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(vii) after due inquiry, such counsel does not know
of any legal or governmental proceeding pending or threatened
to which any of the Kalitta Companies or any of their
subsidiaries is a party or to which any of the properties of
any of the Kalitta Companies or any of their subsidiaries are
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement
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or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as
required;
(viii) the Kalitta Companies have properly taken all
actions, corporate and otherwise, and obtained all consents of
stockholders, necessary to approve the Merger; and
(ix) such counsel (1) believes that (except for
financial statements and schedules as to which such counsel
need not express any belief), with respect to the Kalitta
Companies, the Registration Statement and the prospectus
included therein at the time the Registration Statement became
effective did not contain any 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 and (2) believes that (except for financial
statements and schedules as to which such counsel need not
express any belief), with respect to the Kalitta Companies,
the Prospectus does not contain any untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(f) You shall have received on the Closing Date an
opinion of Shearman & Sterling, special counsel for the Underwriters,
dated the Closing Date, covering such matters as you may reasonably
request.
With respect to subparagraph (ix) of paragraph (e) above,
Miller, Canfield, Paddock & Stone, P.L.C., may state that their
opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification
except as specified.
The opinions of Xxxxxx and Xxxxx LLP described in paragraph
(c) above and the opinion of Miller, Canfield, Paddock & Stone, P.L.C.
described in paragraph (d) above shall be rendered to you at the
request of the Company and the Kalitta Companies, respectively, and
each shall so state therein.
(g) You shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to you,
from Ernst & Young LLP, the Company's independent public accountants,
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements, and certain financial information including pro
forma financial statements, contained in the Registration Statement
and the Prospectus.
(h) You shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to you,
from Deloitte & Touche, LLP, the Kalitta Companies'
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independent public accountants, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information other than pro forma financial information
contained in the Registration Statement and the Prospectus.
(i) The "lock-up" agreements between you and certain
stockholders, officers and directors of the Company (including the
post-Merger officers and directors) relating to sales of shares of
common stock of the Company or any securities convertible into or
exercisable or exchangeable for such common stock, delivered to you on
or before the date hereof, shall be in full force and effect on the
Closing Date.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the Representatives
on the Option Closing Date of such documents as they may reasonably request
with respect to the good standing of the Company, the due authorization and
issuance of the Additional Shares and other matters related to the issuance of
the Additional Shares.
VI.
In further consideration of the agreements of the Underwriters
herein contained, the Company covenants as follows:
(a) To furnish to you, without charge, seven signed
copies of the Registration Statement (including exhibits thereto) and
for delivery to each other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto) and, during the
period mentioned in paragraph (c) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and to file no such proposed
amendment or supplement to which you reasonably object in writing.
(c) If, during such period after the first date of the
public offering of the Shares as in the opinion of your counsel the
Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist
as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of
the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the reasonable opinion of your counsel, it is
necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have
been sold by you on behalf of the Underwriters and to any other
dealers upon request, either amendments or supplements
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to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading or so
that the Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request and to pay all reasonable expenses (including
fees and disbursements of counsel) in connection with such
qualification and in connection with any review of the offering of the
Shares by the National Association of Securities Dealers, Inc.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement
covering the twelve-month period ending December 31, 1998 that
satisfies the provisions of Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder.
(f) To pay all reasonable document production charges and
expenses of Shearman & Sterling, special counsel for the Underwriters
(but not including their fees for professional services), in
connection with the preparation of this Agreement.
VII.
The Company and the Kalitta Companies, jointly and severally,
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by any Underwriter or any such controlling person in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any
omission or alleged omission to state therein a material fact required to be
state therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use therein; provided,
however, that the indemnification contained in this paragraph with respect to
any preliminary prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) on account of
any such loss, claim, damage, liability or expense arising from the sale of the
Shares by such Underwriter to any person if a copy of the Prospectus shall not
have been delivered or sent to such person within the time required by the Act
and the regulations thereunder, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
preliminary prospectus was corrected in the Prospectus.
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Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus,
the Prospectus or any amendments or supplements thereto.
In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the two preceding paragraphs,
such person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified 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
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the Underwriters
and such control persons of Underwriters, such firm shall be designated in
writing by Xxxxxx Xxxxxxx & Co. Incorporated. In the case of any such separate
firm for the Company, and such directors, officers and control persons of the
Company, such firm shall be designated in writing by the Company. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid, request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any
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indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
If the indemnification provided for in the first or second
paragraph of this Article VII is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate public offering price of the Shares. The relative fault of the
Company on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Article VII
are several in proportion to the respective number of Shares they have
purchased hereunder, and not joint.
The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Article VII were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Article VII, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities
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Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The remedies provided for in this Article
VII are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this
Article VII and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Company, its officers or directors or any person controlling the
Company and (iii) acceptance of and payment for any of the Shares.
VIII.
This Agreement shall be subject to termination by notice given
by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities, (iv) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis that,
in your reasonable judgment, is material and adverse or (v) the Company or any
of its subsidiaries or any of the Kalitta Companies or any of their
subsidiaries (1) loses its operating certificate, (2) receives any regulatory
order to materially curtail or otherwise materially limit the use of any of the
aircraft of the Company or its subsidiaries or the Kalitta Companies or their
subsidiaries or (3) is involved in any material accident and (b) in the case of
any of the events specified in clauses (a)(i) through (v), such event singly or
together with any other such event makes it, in your reasonable judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
IX.
This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement by the
Commission.
If, on the Closing Date or the Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares that it or they have agreed to purchase hereunder on such date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Shares to be purchased on such date,
the other Underwriters shall be obligated severally in the proportions that the
number of Firm Shares set
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forth opposite their respective names in Schedule I bears to the aggregate
number of Firm Shares set forth opposite the names of all such nondefaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to Article II be
increased pursuant to this Article IX by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date or the Option Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase Shares and the
aggregate number of Shares with respect to which such default occurs is more
than one-tenth of the aggregate number of Shares to be purchased on such date,
and arrangements satisfactory to you and the Company for the purchase of such
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or
the Company. In any such case either you or the Company shall have the right
to postpone the Closing Date or the Option Closing Date, as the case may be,
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.
This Agreement may be signed in two or more counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
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Very truly yours,
KITTY HAWK, INC.
By
--------------------------------------
AMERICAN INTERNATIONAL AIRWAYS, INC.
By
--------------------------------------
KALITTA FLYING SERVICE, INC.
By
--------------------------------------
FLIGHT ONE LOGISTICS, INC.
By
--------------------------------------
O.K. TURBINES, INC.
By
--------------------------------------
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AMERICAN INTERNATIONAL TRAVEL, INC.
By
--------------------------------------
----------------------------------------
M. Xxx Xxxxxxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxxxx
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Accepted, November __ 1997
XXXXXX XXXXXXX & CO.
INCORPORATED
BT ALEX. XXXXX INCORPORATED
XXXXX & XXXXXXXXXXXX, INC.
FIELDSTONE FPCG SERVICES, L.P.
Acting severally on behalf of themselves
and the several Underwriters
named in Schedule I hereto.
By Xxxxxx Xxxxxxx & Co.
Incorporated
By
--------------------------------------
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SCHEDULE II
Selling Stockholders
Stockholder Number of
----------- Shares
To Be Sold
----------
M. Xxx Xxxxxxxxxxx 1,000,000
Xxxxxx X. Xxxxxx 75,000
Xxxxxxx X. Xxxxxxxxx 25,000
-------------
1,100,000
Total Shares . . . . . . . . . . . . . . . . . . . . . . . =============
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SCHEDULE I
Underwriters
Underwriter Number of
----------- Firm Shares
To Be Purchased
---------------
Xxxxxx Xxxxxxx & Co. Incorporated
BT Alex. Xxxxx Incorporated
Xxxxx & Xxxxxxxxxxxx, Inc.
Fieldstone FPCG Services, L.P.
-------------
Total Firm Shares . . . . . . . . . . . . . . . . . . . . 4,100,000
=============
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SCHEDULE III
Company Indebtedness
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SCHEDULE IV
Kalitta Companies Indebtedness