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EXHIBIT 1.1
A&K Draft
01/29/97
3,900,000 Shares
First Aviation Services Inc.
Common Stock
($0.01 par value)
UNDERWRITING AGREEMENT
o, 1997
XXXXX XXXXXX INC.
XXXXXX, READ & CO. INC.
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
First Aviation Services Inc., a Delaware corporation (the "Company"),
proposes to issue and sell 3,900,000 shares of its Common Stock to the several
Underwriters named in Schedule II hereto (the "Underwriters"). The Company's
common stock, $0.01 par value, is herein referred to as the "Common Stock" and
the 3,900,000 shares of Common Stock to be issued and sold to the Underwriters
by the Company are hereinafter referred to as the "Firm Shares". The minority
stockholder of the Company listed in Schedule I hereto (the "Selling
Stockholder ") also proposes to sell to the Underwriters, upon the terms and
conditions set forth in Section 2 hereof, up to an additional 585,000 shares
(the "Additional Shares") of Common Stock. The Company and the Selling
Stockholder are hereinafter sometimes referred to as the "Sellers ". The Firm
Shares and the Additional Shares are hereinafter collectively referred to as
the "Shares".
The Company and the Selling Stockholder wish to confirm as follows
their respective agreements with you (the "Representatives") and the other
several Underwriters on whose behalf you are acting, in connection with the
several purchases of the Shares by the Underwriters.
1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement (No. 333-18647) on Form S-1
under the Act (the "registration statement"), including a prospectus subject to
completion
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relating to the Shares. The term "Registration Statement" as used in this
Agreement means the registration statement (including all financial schedules
and exhibits), as amended at the time it becomes effective, or, if the
registration statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this Agreement.
If it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed and must
be declared effective before the offering of the Shares may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. The term "Prospectus"
as used in this Agreement means the prospectus in the form included in the
Registration Statement, or, if the prospectus included in the Registration
Statement omits information in reliance on Rule 430A under the Act and such
information is included in a prospectus filed with the Commission pursuant to
Rule 424(b) under the Act, the term "Prospectus" as used in this Agreement
means the prospectus in the form included in the Registration Statement as
supplemented by the addition of the Rule 430A information contained in the
prospectus filed with the Commission pursuant to Rule 424(b). The term
"Prepricing Prospectus" as used in this Agreement means the prospectus subject
to completion in the form included in the registration statement at the time of
the initial filing of the registration statement with the Commission, and as
such prospectus shall have been amended from time to time prior to the date of
the Prospectus.
2. Agreements to Sell and Purchase. Subject to such adjustments
as you may determine in order to avoid fractional shares, the Company hereby
agrees, subject to all the terms and conditions set forth herein, to issue and
sell to each Underwriter and, upon the basis of the representations, warranties
and agreements of the Company and the Selling Stockholder herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of $o per Share (the "purchase price per share"), the number of Firm
Shares which bears the same proportion to the aggregate number of Firm Shares
to be issued and sold by the Company as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule II hereto (or such number of
Firm Shares increased as set forth in Section 12 hereof) bears to the aggregate
number of Firm Shares to be sold by the Company.
The Selling Stockholder agrees, subject to all the terms and
conditions set forth herein, to sell to the Underwriters, and, upon the basis
of the representations, warranties and agreements of the Selling Stockholder
herein contained and subject to all the terms and conditions set forth herein,
the Underwriters shall have the right to purchase from the Selling Stockholder,
at the purchase price per share, pursuant to an option (the "over-allotment
option") which may be exercised at any time and from time to time prior to 9:00
p.m., New York City time, on the 30th day after the date of the Prospectus (or,
if such 30th day shall be a Saturday or Sunday or a holiday, on the next
business day thereafter when the New York Stock Exchange is open for trading),
up to an aggregate of 585,000 Additional Shares from the Selling Stockholder.
Additional Shares may be purchased only for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. The
number of Additional Shares which the Underwriters elect to purchase upon any
exercise of the over-allotment option shall be provided by the Selling
Stockholder up to the maximum number of Additional Shares which the Selling
Stockholder has agreed to sell. Upon any exercise of the over-allotment
option, each
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Underwriter, severally and not jointly, agrees to purchase from the Selling
Stockholder the number of Additional Shares (subject to such adjustments as you
may determine in order to avoid fractional shares) which bears the same
proportion to the number of Additional Shares to be sold by the Selling
Stockholder as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule II hereto (or such number of Firm Shares increased as
set forth in Section 12 hereof) bears to the aggregate number of Firm Shares to
be sold by the Selling Stockholder.
Certificates in transferable form for the Additional Shares which the
Selling Stockholder agrees to sell pursuant to this Agreement have been placed
in custody with o (the "Custodian") for delivery under this Agreement pursuant
to a Custody Agreement and Power of Attorney (the "Custody Agreement") executed
by the Selling Stockholder appointing o as agent and attorney-in-fact (the
"Attorney-in-Fact"). The Selling Stockholder agrees that (i) the Additional
Shares represented by the certificates held in custody pursuant to the Custody
Agreement are subject to the interests of the Underwriters and the Company,
(ii) the arrangements made by the Selling Stockholder for such custody are,
except as specifically provided in the Custody Agreement, irrevocable, and
(iii) the obligations of the Selling Stockholder hereunder and under the
Custody Agreement shall not be terminated by any act of the Selling Stockholder
or by operation of law, whether by the death or incapacity of the Selling
Stockholder or the occurrence of any other event. If the Selling Stockholder
shall be incapacitated pursuant to bankruptcy or otherwise or if any other
event shall occur before the delivery of the Additional Shares hereunder,
certificates for the Additional Shares shall be delivered to the Underwriters
by the Attorney-in-Fact in accordance with the terms and conditions of this
Agreement and the Custody Agreement as if such incapacity or other event had
not occurred, regardless of whether or not the Attorney-in-Fact or any
Underwriter shall have received notice of such incapacity or other event. The
Attorney-in-Fact is authorized, on behalf of the Selling Stockholder, to
execute this Agreement and any other documents necessary or desirable in
connection with the sale of the Additional Shares to be sold hereunder by the
Selling Stockholder, to make delivery of the certificates for such Additional
Shares, to receive the proceeds of the sale of such Additional Shares, to give
receipts for such proceeds, to pay therefrom any expenses to be borne by the
Selling Stockholder in connection with the sale and public offering of such
Additional Shares, to distribute the balance thereof to the Selling
Stockholder, and to take such other action as may be necessary or desirable in
connection with the transactions contemplated by this Agreement. The
Attorney-in-Fact agrees to perform his duties under the Custody Agreement.
3. Terms of Public Offering. The Sellers have been 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 and initially
to offer the Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 a.m., New
York City time, on o, 1997 (the "Closing Date"). The place of closing for the
Firm Shares and the Closing Date may be varied by agreement among you, the
Company and the Attorney-in-Fact.
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Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the aforementioned office
of Xxxxx Xxxxxx Inc. at such time on such date (the "Option Closing Date"),
which may be the same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than two nor later than ten business days after
the giving of the notice hereinafter referred to, as shall be specified in a
written notice from you on behalf of the Underwriters to the Company and the
Attorney-in-Fact of the Underwriters' determination to purchase a number,
specified in such notice, of Additional Shares. The place of closing for any
Additional Shares and the Option Closing Date for such Shares may be varied by
agreement among you, the Company and the Attorney-in-Fact.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 a.m., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 a.m., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment of the purchase
price therefor in immediately available funds.
5. Agreements of the Company. The Company agrees with the
several Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the Company will endeavor to cause the Registration Statement or such
post-effective amendment to become effective as soon as possible and will
advise you promptly and will confirm such advice in writing, when the
Registration Statement or such post-effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the suspension of qualification of the Shares
for offering or sale in any jurisdiction or the initiation of any proceeding
for such purpose; and (iii) within the period of time referred to in paragraph
(f) below, of any change in the Company's condition (financial or other),
business, prospects, properties, net worth or results of operations, or of the
happening of any event, which makes any statement of a material fact made in
the Registration Statement or the Prospectus (as then amended or supplemented)
untrue or which requires the making of any additions to or changes in the
Registration Statement or the Prospectus (as then amended or supplemented) in
order to state a material fact required by the Act or the regulations
thereunder to be stated therein or necessary in order to make the statements
therein not misleading, or of the necessity to amend or supplement the
Prospectus (as then amended or supplemented) to comply with the Act or any
other law. If at any time the
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Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge, three signed
copies of the registration statement as originally filed with the Commission
and of each amendment thereto, including financial statements and all exhibits
thereto, and will also furnish to you, without charge, such number of conformed
copies of the registration statement as originally filed and of each amendment
thereto, but without exhibits, as you may request.
(d) The Company will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus of
which you shall not previously have been advised or to which you shall object
after being so advised or (ii) so long as, in the opinion of counsel for the
Underwriters, a prospectus is required to be delivered in connection with sales
by any Underwriter or dealer, file any information, documents or reports
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act") without delivering a copy of such information, documents or reports to
you, as Representatives of the Underwriters, prior to or concurrently with such
filing.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered to you, without charge, in such quantities as you have
requested, copies of each form of the Prepricing Prospectus. The Company
consents to the use, in accordance with the provisions of the Act and with the
securities or Blue Sky laws of the jurisdictions in which the Shares are
offered by the several Underwriters and by dealers, prior to the date of the
Prospectus, of each Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer, the Company
will expeditiously deliver to each Underwriter and each dealer, without charge,
as many copies of the Prospectus (and of any amendment or supplement thereto)
as you may request. The Company consents to the use of the Prospectus (and of
any amendment or supplement thereto) in accordance with the provisions of the
Act and with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by all dealers to whom
Shares may be sold, both in connection with the offering and sale of the Shares
and for such period of time thereafter as the Prospectus is required by the Act
to be delivered in connection with sales by any Underwriter or dealer. If
during such period of time any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Underwriters is required to be set
forth in the Prospectus (as then amended or supplemented) or should be set
forth therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Prospectus to comply with the Act or any other law,
the Company will forthwith prepare and, subject to the provisions of paragraph
(d) above, file with the Commission an appropriate supplement or amendment
thereto, and will expeditiously furnish to the Underwriters and dealers a
reasonable number of copies thereof. In the event that the Company and you, as
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Representatives of the several Underwriters, agree that the Prospectus should
be amended or supplemented, the Company, if requested by you, will promptly
issue a press release announcing or disclosing the matters to be covered by the
proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may designate and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided
that in no event shall the Company be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action which
would subject it to service of process in suits, other than those arising out
of the offering or sale of the Shares, in any jurisdiction where it is not now
so subject.
(h) The Company will make generally available to its security
holders a consolidated earnings statement, which need not be audited, covering
a twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which consolidated earnings statement
shall satisfy the provisions of Section 11(a) of the Act.
(i) During the period of five years hereafter, the Company will
furnish to you (i) as soon as available, a copy of each report of the Company
mailed to stockholders or filed with the Commission, and (ii) from time to time
such other information concerning the Company as you may reasonably request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 12 hereof or by notice given by you terminating
this Agreement pursuant to Section 12 or Section 13 hereof) or if this
Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Company or the Selling Stockholder to comply with
the terms or fulfill any of the conditions of this Agreement, the Company
agrees to reimburse the Representatives for all out-of-pocket expenses
(including fees and expenses of counsel for the Underwriters) incurred by you
in connection herewith.
(k) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder in accordance with the description set forth
under the caption "Use of Proceeds" in the Prospectus.
(l) If Rule 430A of the Act is employed, the Company will timely
file the Prospectus pursuant to Rule 424(b) under the Act and will advise you
of the time and manner of such filing.
(m) Except as provided in this Agreement with respect to the
over-allotment option, the Company and except for grants of options and sales
of shares under the Company's stock benefit plans, as set forth in the
Prospectus, the Company will not sell, offer to sell, contract to sell, grant
any option to purchase or otherwise dispose of shares of Common Stock or any
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securities convertible into or exercisable or exchangeable for shares of Common
Stock or any rights to acquire Common Stock for a period of 180 days after the
effective date of the Prospectus without the prior written consent of Xxxxx
Xxxxxx Inc.
(n) The Company has furnished or will furnish to you "lock-up"
letters having substantially the same terms set forth in clause (m) above, in
form and substance satisfactory to you, signed by each of its current officers
and directors and each of its stockholders designated by you.
(o) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, the Company has not taken, nor will it take,
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.
(p) The Company will use its best efforts to have the Common Stock
approved for quotation, subject to notice of issuance, on the Nasdaq National
Market concurrently with the effectiveness of the registration statement.
6. Agreements of the Selling Stockholder. The Selling
Stockholder agrees with the several Underwriters as follows:
(a) The Selling Stockholder will cooperate to the extent necessary
to cause the registration statement or any post-effective amendment thereto to
become effective at the earliest possible time.
(b) The Selling Stockholder will pay all Federal and other taxes,
if any, on the transfer or sale of the Shares being sold by such Selling
Stockholder to the Underwriters.
(c) The Selling Stockholder will do or perform all things required
to be done or performed by the Selling Stockholder prior to the Closing Date or
any Option Closing Date, as the case may be, to satisfy all conditions
precedent to the delivery of the Shares pursuant to this Agreement.
(d) The Selling Stockholder has executed or will execute a
"lock-up" letter as provided in Section 5(n) above and will not sell, offer to
sell, contract to sell or otherwise sell dispose of, loan, pledge or grant any
rights with respect to any shares of Common Stock, any options or grants to
purchase shares of Common Stock or any securities convertible into or
exercisable or exchangeable for shares of Common Stock owned directly by the
Selling Stockholder or with respect to which it has power of disposition,
except for the sale of Additional Shares to the Underwriters pursuant to this
Agreement, prior to the expiration of 180 days after the date of the
Prospectus, without the prior written consent of Xxxxx Xxxxxx Inc.
(e) Except as stated in this Agreement and in the Prepricing
Prospectus and the Prospectus, the Selling Stockholder will not take, directly
or indirectly, any action designed to
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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.
(f) The Selling Stockholder will advise you promptly and, if
requested by you, will confirm such advice in writing, within the period of
time referred to in Section 5(f) hereof, of any change in the Company's
condition (financial or other), business, prospects, properties, net worth or
results of operations or of any change in information relating to the Selling
Stockholder or the Company or any new information relating to the Company or
relating to any matter stated in the Prospectus or any amendment or supplement
thereto which comes to the attention of the Selling Stockholder that suggests
that any statement made in the Registration Statement or the Prospectus (as
then amended or supplemented, if amended or supplemented) is or may be untrue
in any material respect or that the Registration Statement or Prospectus (as
then amended or supplemented, if amended or supplemented) omits or may omit to
state a material fact or a fact necessary to be stated therein in order to make
the statements therein not misleading in any material respect, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented, if amended or supplemented) in order to comply with the Act or
any other law.
7. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act. The
Commission has not issued any order preventing or suspending the use of any
Prepricing Prospectus.
(b) The registration statement in the form in which it became or
becomes effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and the Prospectus and any supplement
or amendment thereto when filed with the Commission under Rule 424(b) under the
Act, complied or will comply in all material respects with the provisions of
the Act and did not or will not at any such times 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, except that
this representation and warranty does not apply to statements in or omissions
from the registration statement or the Prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to the
Company in writing by or on behalf of any Underwriter through you expressly for
use therein.
(c) All the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights; the Shares to be issued and sold
by the Company have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms hereof, will
be validly issued, fully paid and nonassessable and free of any preemptive or
similar rights; and the capital stock of the Company conforms to the
description thereof in the registration statement and the Prospectus.
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(d) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus, and is duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not have
a material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and
the Subsidiaries (as hereinafter defined) taken as a whole.
(e) All of the Company's subsidiaries, which, for purposes of this
Agreement, unless otherwise specified, shall include National Airmotive
Corporation ("NAC") and Aircraft Parts International Xxxxx, Inc. ("API Xxxxx"
and, together with NAC, the "Subsidiaries") are listed in an exhibit to the
Registration Statement. The Company has no subsidiaries other than the
Subsidiaries. Each Subsidiary is a corporation duly organized, validly
existing and in good standing in the jurisdiction of its incorporation, with
full corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus, and is duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not have
a material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of such Subsidiary;
all the outstanding shares of capital stock of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and nonassessable, and,
except for those shares of capital stock of API Xxxxx which are owned, directly
or indirectly, by AMR Corporation, as set forth in the Prospectus, are owned by
the Company directly, or indirectly through one of the other Subsidiaries, free
and clear of any lien, adverse claim, security interest, equity or other
encumbrance.
(f) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or to which
any of their respective properties is subject, that are required to be
described in the Registration Statement or the Prospectus but are not described
as required, and there are no agreements, contracts, indentures, leases or
other instruments that are required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement that are not described or filed as required by the Act, and the
descriptions thereof are, in each case, correct in all material respects.
(g) Neither the Company nor any of the Subsidiaries is in
violation of its certificate or articles of incorporation or by-laws, or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body
having jurisdiction over the Company or any of the Subsidiaries, or in default
in any material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or
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other instrument to which the Company or any of the Subsidiaries is a party or
by which any of them or any of their respective properties may be bound.
(h) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement by the Company nor the consummation
by the Company of the transactions contemplated hereby or by the Asset Purchase
Agreement (A) requires any consent, approval, authorization or other order of
or registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official (except such as may be
required for the registration of the Shares under the Act and the Exchange Act
and compliance with the securities or Blue Sky laws of various jurisdictions,
all of which have been or will be effected in accordance with this Agreement)
or conflicts or will conflict with or constitutes or will constitute a breach
of, or a default under, the certificate or articles of incorporation or bylaws,
or other organizational documents, of the Company or any of the Subsidiaries or
(B) conflicts or will conflict with or constitutes or will constitute a breach
of, or a default under, any agreement, indenture, lease or other instrument to
which the Company or any of the Subsidiaries is a party or by which any of them
or any of their respective properties may be bound, or violates or will violate
any statute, law, regulation or filing or judgment, injunction, order or decree
applicable to the Company or any of the Subsidiaries or any of their respective
properties, or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to which any
of them is a party or by which any of them may be bound or to which any of the
property or assets of any of them is subject.
(i) The accountants, Ernst & Young LLP and Price Waterhouse LLP,
who have certified the financial statements included in the Registration
Statement and the Prospectus (or any amendment or supplement thereto) are or
were, as applicable, independent public accountants as required by the Act.
(j) The financial statements, together with related schedules and
notes, included in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), present fairly the consolidated financial
position, results of operations and changes in financial position of the
Company and the Subsidiaries on the basis stated in the Registration Statement
at the respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved, except as disclosed therein; the pro forma financial
information of the Company and its Subsidiaries and the related notes thereto
included in the Registration Statement 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 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 and circumstances referred to therein and the other financial
and statistical information and data included in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) are accurately
presented and prepared on a basis consistent with such financial statements and
the books and records of the Company and the Subsidiaries.
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(k) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement have been duly and validly
authorized by the Company, and this Agreement has been duly executed and
delivered by the Company.
(l) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), neither
the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and the
Subsidiaries taken as a whole, and there has not been any change in the capital
stock, or material increase in the short-term debt or long-term debt, of the
Company or any of the Subsidiaries, or any material adverse change, or any
development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or other),
business, prospects, properties, net worth or results of operations of the
Company and the Subsidiaries taken as a whole.
(m) Each of the Company and the Subsidiaries has good and
marketable title to all property (real and personal) described in the
Prospectus as being owned by it, free and clear of all liens, claims, security
interests or other encumbrances except such as are described in the
Registration Statement and the Prospectus or in a document filed as an exhibit
to the Registration Statement and all the property described in the Prospectus
as being held under lease by each of the Company and the Subsidiaries is held
by it under valid, subsisting and enforceable leases.
(n) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted by
the Act.
(o) The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own its respective properties and
to conduct its business in the manner described in the Prospectus, subject to
such qualifications as may be set forth in the Prospectus; the Company and each
of the Subsidiaries has fulfilled and performed all its material obligations
with respect to such permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any
such permit, subject in each case to such qualification as may be set forth in
the Prospectus; and, except as described in the Prospectus, none of such
permits contains any restriction that is materially burdensome to the Company
or any of the Subsidiaries.
(p) Each of the Company and its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access
to assets is permitted
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only in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(q) To the Company's knowledge, neither the Company nor any of its
Subsidiaries nor any employee or agent of the Company or any Subsidiary has
made any payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any law, rule or regulation, which payment,
receipt or retention of funds is of a character required to be disclosed in the
Prospectus.
(r) The Company and each of the Subsidiaries have filed all tax
returns required to be filed, which returns are complete and correct, and
neither the Company nor any Subsidiary is in default in the payment of any
taxes which were payable pursuant to said returns or any assessments with
respect thereto.
(s) No holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of the
Company because of the filing of the registration statement or consummation of
the transactions contemplated by this Agreement, and there are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments of sale or liens related to or entitling any person to purchase or
otherwise to acquire any shares of the capital stock of, or other ownership
interest in, the Company or any subsidiary thereof except as otherwise
disclosed in the Registration Statement.
(t) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registrations, service marks, service xxxx registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by them or any of them or necessary
for the conduct of their respective businesses, and the Company is not aware of
any claim to the contrary or any challenge by any other person to the rights of
the Company and the Subsidiaries with respect to the foregoing.
(u) The Company is not now, and after sale of the Shares to be
sold by it hereunder and application of the net proceeds from such sale as
described in the Prospectus under the caption "Use of Proceeds", including
without limitation, the acquisition of the assets of Aircraft Parts
International ("Old API"), a division of AMR Xxxxx, Inc., as described in the
Prospectus, will not be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(v) 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) and 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
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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. Except as set forth in the Prospectus, neither the Company nor any of
the subsidiaries has been named as a "potentially responsible party" under the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended ("CERCLA").
(w) In the ordinary course of its business, the Company conducts a
periodic review of, and in connection with the acquisition of the assets of Old
API, as described in the Prospectus, has conducted a review of, the effect of
Environmental Laws on the business, operations and properties of the Company
and its Subsidiaries, in the course of which the Company identifies and
evaluates, and in connection with Old API, has identified and executed,
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.
(x) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are customary in the businesses in which they are
engaged; all policies or insurance and fidelity or surety bonds insuring the
Company or any of its subsidiaries or their respective businesses, assets,
employees, officers and directors are in full force and effect; the Company and
its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the Company or
any of its subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause.
(y) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed therein by
Item 404 of Regulation S-K of the Commission.
(z) In the last five years there has not been and there is not any
action to organize a labor union at any of the Company's or its Subsidiaries'
facilities, or any strike, labor dispute, slowdown or stoppage pending against
the Company or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against it or any of its subsidiaries except for such
actions as have been described in the Registration Statement.
(aa) The Asset Purchase Agreement, dated November 25, 1996, between
API Xxxxx and AMR Xxxxx, Inc., has been duly authorized, executed and delivered
by or on behalf of each of the parties thereto and is the valid and binding
agreement of each of the parties thereto, enforceable against each of the
parties thereto in accordance with its terms. The Asset Purchase Agreement
provides for the acquisition of such assets of Old API as described in the
Prospectus or the terms described therein.
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(bb) The capitalization of the Company (including the API Xxxxx'
Series A Cumulative Convertible Preferred Stock to be issued in connection with
the acquisition of the assets of Old API) is as described in the Prospectus
under the caption "Capitalization" and "Description of Capital Stock."
(cc) The Company has complied with all provisions of Florida Statutes,
Section 517.075, relating to issuers doing business with Cuba.
8. Representations and Warranties of the Selling Stockholder.
The Selling Stockholder represents and warrants to each Underwriter that:
(a) The Selling Stockholder now has, and on the Closing Date and
any Option Closing Date will have, valid and marketable title to the Additional
Shares to be sold by the Selling Stockholder, free and clear of any lien,
claim, security interest or other encumbrance, including, without limitation,
any restriction on transfer.
(b) The Selling Stockholder now has, and on the Closing Date and
any Option Closing Date will have, full legal right, power and authorization,
and any approval required by law, to sell, assign transfer and deliver such
Additional Shares in the manner provided in this Agreement, and upon delivery
of and payment for such Additional Shares hereunder, the several Underwriters
will acquire valid and marketable title to such Additional Shares free and
clear of any lien, claim, security interest, or other encumbrance.
(c) This Agreement and the Custody Agreement have been duly
authorized, executed and delivered by or on behalf of the Selling Stockholder
and the Custody Agreement is the valid and binding agreement of the Selling
Stockholder enforceable against the Selling Stockholder in accordance with its
terms.
(d) Neither the execution and delivery of this Agreement or the
Custody Agreement by or on behalf of the Selling Stockholder nor the
consummation of the transactions herein or therein contemplated by or on behalf
of the Selling Stockholder 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 conflicts or will conflict with or constitutes or will constitute a
breach of, or default under, or violates or will violate, any agreement,
indenture or other instrument to which the Selling Stockholder is a party or by
which the Selling Stockholder is or may be bound or to which any of the Selling
Stockholder's property or assets is subject, or any statute, law, rule,
regulation, ruling, judgment, injunction, order or decree applicable to the
Selling Stockholder or to any property or assets of the Selling Stockholder.
(e) The Registration Statement and the Prospectus, insofar as they
relate to the Selling Stockholder, do not and will not contain an untrue
statement of a material fact or omit to state
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any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(f) The Selling Stockholder does not have any 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.
(g) The sale of the Additional Shares is not prompted by the
actual knowledge of the Selling Stockholder of any material non- public
information concerning the Company.
(h) The representations and warranties of the Selling Stockholder
in the Custody Agreement are, and on the Closing Date and any Option Closing
Date will be, true and correct.
(i) The Selling Stockholder 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.
9. Indemnification and Contribution. (a) The Company and the
Selling Stockholder, jointly and severally, agree to indemnify and hold
harmless each of you and each other Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20(a) the Exchange Act from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Prepricing Prospectus or in the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
information relating to such Underwriter furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to any Prepricing 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,
during the period of time a prospectus is required by the Act to be delivered
in connection with sales, 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 Company shall sustain the burden of proof that
the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Prepricing Prospectus was
corrected in the Prospectus, provided that the Company has delivered the
Prospectus to the several Underwriters in requisite quantity on a timely basis
to permit such delivery or sending. The foregoing
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indemnity agreement shall be in addition to any liability which the Company or
the Selling Stockholder may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company or the Selling Stockholder, such
Underwriter or such controlling person shall promptly notify the parties
against whom indemnification is being sought (the "indemnifying parties"), and
such indemnifying parties shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Such Underwriter
or any such controlling person shall have the right to employ separate counsel
in any such action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Underwriter or such controlling person unless (i) the indemnifying parties
have agreed in writing to pay such fees and expenses, (ii) the indemnifying
parties have failed to assume the defense and employ counsel, or (iii) the
named parties to any such action, suit or proceeding (including any impleaded
parties) include both such Underwriter or such controlling person and the
indemnifying parties and such Underwriter or such controlling person shall have
been advised by its counsel that representation of such indemnified party and
any indemnifying party by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying
party shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Underwriter or such controlling person). It is
understood, however, that the indemnifying parties shall, in connection with
any one such action, suit or proceeding or separate but substantially similar
or related actions, suits or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for all such Underwriters and controlling persons
not having actual or potential differing interests with you or among
themselves, which firm shall be designated in writing by Xxxxx Xxxxxx Inc., and
that all such fees and expenses shall be reimbursed as they are incurred. The
indemnifying parties shall not be liable for any settlement of any such action,
suit or proceeding effected without their written consent, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the indemnifying parties agree to indemnify
and hold harmless any Underwriter, to the extent provided in the preceding
paragraph, and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, the Selling Stockholder, and any person who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, to the same extent as the foregoing indemnity from
the Company and the Selling Stockholder to each Underwriter, but only with
respect to information relating to such Underwriter furnished in writing by or
on behalf of such Underwriter through you expressly for use in the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
the Company, any of its directors, any such officer, the
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Selling Stockholder, or any such controlling person based on the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto, and in respect of which indemnity may be sought against any
Underwriter pursuant to this paragraph (c), such Underwriter shall have the
rights and duties given to the Company by paragraph (b) above (except that if
the Company shall have assumed the defense thereof such Underwriter shall not
be required to do so, but may employ separate counsel therein and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
such Underwriter's expense), and the Company, its directors, any such officer,
the Selling Stockholder, and any such controlling person shall have the rights
and duties given to the Underwriters by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which any Underwriter
may otherwise have.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Selling Stockholder 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 and the
Selling Stockholder on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Selling Stockholder on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and the Selling
Stockholder bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page
of the Prospectus; provided that, in the event that the Underwriters shall have
purchased any Additional Shares hereunder, any determination of the relative
benefits received by the Company, the Selling Stockholder or the Underwriters
from the offering of the Shares shall include the net proceeds (before
deducting expenses) received by the Company and the Selling Stockholder, and
the underwriting discounts and commissions received by the Underwriters, from
the sale of such Additional Shares, in each case computed on the basis of the
respective amounts set forth in the notes to the table on the cover page of the
Prospectus. The relative fault of the Company and the Selling Stockholder 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 the Selling
Stockholder on the one hand or by the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Company, the Selling Stockholder and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by a pro rata
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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 paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (d) above 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 any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price of the Shares underwritten by it and distributed to the public exceeds
the amount of any damages which such Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 9 are several in proportion
to the respective numbers of Firm Shares set forth opposite their names in
Schedule II hereto (or such numbers of Firm Shares increased as set forth in
Section 12 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any 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 action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Stockholder set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or the Selling Stockholder or any person controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company, its directors or officers, or
any person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
9.
10. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for the registration statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the registration statement or such post-effective amendment shall
have become effective not later than 5:30 p.m., New York City time, on the
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date hereof, or at such later date and time as shall be consented to in writing
by you, and all filings, if any, required by Rules 424 and 430A under the Act
shall have been timely made; no stop order suspending the effectiveness of the
registration statement shall have been issued and no proceeding for that
purpose shall have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the Commission
for additional information (to be included in the registration statement or the
prospectus or otherwise) shall have been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, prospects, net worth, or results of operations of the
Company or the Subsidiaries not contemplated by the Prospectus, which in your
opinion, as Representatives of the several Underwriters, would materially,
adversely affect the market for the Shares, or (ii) any event or development
relating to or involving the Company or any officer or director of the Company
or any Selling Stockholder which makes any statement made in the Prospectus
untrue or which, in the opinion of the Company and its counsel or the
Underwriters and their counsel, requires the making of any addition to or
change in the Prospectus in order to state a material fact required by the Act
or any other law to be stated therein or necessary in order to make the
statements therein not misleading, if amending or supplementing the Prospectus
to reflect such event or development would, in your opinion, as Representatives
of the several Underwriters, materially adversely affect the market for the
Shares. As used in this Section 10(b), the term "Prospectus" shall refer to
the Prospectus in the form first delivered to the Underwriters for use in
confirming sales of the Shares.
(c) You shall have received on the Closing Date, an opinion of
O'Melveny & Xxxxx LLP, counsel for the Company, dated the Closing Date and
addressed to you as Representatives of the several Underwriters, to the effect
that:
(i) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of
Delaware; the Company has full corporate power and authority to enter
into this Agreement and to issue, sell and deliver the Shares to be
sold by it to the Underwriters as provided herein, and to own, lease
and operate its properties and to conduct its business as described in
the Registration Statement and the Prospectus (and any amendment or
supplement thereto), and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure
so to register or qualify does not have a material adverse effect on
the condition (financial or other), business, properties, net worth or
results of operations of the Company and the Subsidiaries taken as a
whole;
(ii) Each of the Subsidiaries is a corporation duly
organized and validly existing in good standing under the laws of the
jurisdiction of its organization, with full corporate power and
authority to own, lease, and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus
(and any amendment or supplement thereto); and all the outstanding
shares of capital stock of each
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of the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable, and are owned of record by the Company
directly, or indirectly through one of the other Subsidiaries, free
and clear of any perfected security interest, or, to the best
knowledge of such counsel after due inquiry, any other security
interest, lien, adverse claim, equity or other encumbrance;
(iii) The authorized and outstanding capital stock of the
Company (including the API Xxxxx Series A Cumulative Convertible
Preferred Stock to be issued in connection with the acquisition of the
assets of Old API) is as set forth under the caption "Capitalization"
in the Prospectus; and 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";
(iv) All the shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be issued and sold
by the Company hereunder, have been duly authorized and validly
issued, and are fully paid and nonassessable;
(v) The Shares to be issued and sold to the Underwriters
by the Company hereunder have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will be validly issued, fully paid
and nonassessable and free of any preemptive rights pursuant to the
Company's certificate of incorporation, bylaws or by operation of the
Delaware General Corporation Law, or to the best knowledge of such
counsel after due inquiry, similar rights that entitle or will entitle
any person to acquire any Shares upon the issuance thereof by the
Company;
(vi) The form of certificates for the Shares conforms to
the requirements of the Delaware General Corporation Law;
(vii) The Registration Statement and all post-effective
amendments, if any, have become effective under the Act and, to the
best knowledge of such counsel after due inquiry, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose are pending before or
contemplated by the Commission; and any required filing of the
Prospectus pursuant to Rule 424(b) has been made in accordance with
Rule 424(b);
(viii) This Agreement has been duly authorized, executed and
delivered by the Company;
(ix) Neither the Company nor any of the Subsidiaries is in
violation of its respective certificate or articles of incorporation
or bylaws, or other organizational documents, or to the best knowledge
of such counsel after due inquiry, is in default in the performance of
any material obligation, agreement or condition contained in any bond,
debenture, note or other evidence of indebtedness, except as may be
disclosed in the Prospectus;
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(x) Neither the offer, sale or delivery of the Shares,
the execution, delivery or performance of this Agreement, compliance
by the Company with the provisions hereof, nor consummation by the
Company of the transactions contemplated hereby or by the Asset
Purchase Agreement conflicts or will conflict with or constitutes or
will constitute a breach of, or a default under, the certificate or
articles of incorporation or bylaws, or other organizational
documents, of the Company or any of the Subsidiaries or any agreement,
indenture, lease or other instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or any of their
respective properties is bound that is an exhibit to the Registration
Statement, or is known to such counsel after due inquiry, or will
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries, nor will any such action result in any violation of any
existing law, regulation, ruling (assuming compliance with all
applicable state securities and Blue Sky laws), judgment, injunction,
order or decree known to such counsel after reasonable inquiry,
applicable to the Company, the Subsidiaries or any of their respective
properties;
(xi) No consent, approval, authorization or other order
of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official
is required on the part of the Company (except as have been obtained
under the Act and the Exchange Act or such as may be required under
state securities or Blue Sky laws governing the purchase and
distribution of the Shares) for the valid issuance and sale of the
Shares to the Underwriters as contemplated by this Agreement;
(xii) The Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the financial statements
and the notes thereto and the schedules and other financial and
statistical data included therein, as to which such counsel need not
express any opinion) comply as to form in all material respects with
the requirements of the Act;
(xiii) To the best knowledge of such counsel after due
inquiry, (A) other than as described or contemplated in the Prospectus
(or any supplement thereto), there are no legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or
any of their property, is subject, which are required to be described
in the Registration Statement or Prospectus (or any amendment or
supplement thereto) and (B) there are no agreements, contracts,
indentures, leases or other instruments, that are required to be
described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) or to be filed as an exhibit to the
Registration Statement that are not described or filed as required, as
the case may be;
(xiv) To the best knowledge of such counsel after due
inquiry, neither the Company nor any of the Subsidiaries is in
violation of any law, ordinance, administrative or governmental rule
or regulation applicable to the Company or any of
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the Subsidiaries or of any decree of any court or governmental agency
or body having jurisdiction over the Company or any of the
Subsidiaries;
(xv) The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of contracts, agreements
or other legal documents or proceedings, or refer to statements of law
or legal conclusions, are accurate and present fairly the information
required to be shown and described therein; and
(xvi) The Company and each of the Subsidiaries has full
corporate power and authority, and all necessary governmental
authorizations, approvals, orders, licenses, certificates, franchises
and permits of and from all governmental regulatory officials and
bodies (except where the failure so to have any such authorizations,
approvals, orders, licenses, certificates, franchises or permits,
individually or in the aggregate, would not have a material adverse
effect on the business, properties, operations or financial condition
of the Company and the Subsidiaries taken as a whole), to own their
respective properties and to conduct their respective businesses as
now being conducted, as described in the Prospectus.
(d) You shall have received on the Closing Date, an opinion of
Sidley & Austin, counsel for the Selling Stockholder, dated the Closing Date
and addressed to you as Representative of the Several Underwriters, to the
effect that:
(i) The Selling Stockholder is a limited liability
company duly organized and validly existing in good standing under the
laws of its state of organization;
(ii) This Agreement and the Custody Agreement have each
been duly executed and delivered by or on behalf of each of the
Selling Stockholder and the Custody Agreement is a valid and binding
agreement of the Selling Stockholder enforceable against the Selling
Stockholder in accordance with its terms;
(iii) The Selling Stockholder has full legal right, power
and authorization, and to the best knowledge of such counsel after due
inquiry, and the Selling Stockholder has all approvals required by
law, to execute, deliver and perform its obligations under this
Agreement and the Custody Agreement and to sell, assign, transfer and
deliver good and marketable title to the Additional Shares which the
Selling Stockholder has agreed to sell pursuant to this Agreement;
(iv) The execution and delivery of this Agreement and the
Custody Agreement by the Selling Stockholder and the consummation of
the transactions contemplated hereby and thereby will not conflict
with, violate, result in a breach of or constitute a default under the
terms or provisions of any agreement, indenture, mortgage or other
instrument known to such counsel after due inquiry to which the
Selling Stockholder is a party or by which any of them or any of their
assets or property is bound, or any court order or decree or any law,
rule, or regulation applicable to the Selling Stockholder or to any of
the property or assets of the Selling Stockholder; and
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(v) Upon delivery of the Additional Shares pursuant to
this Agreement and payment therefor as contemplated herein the
Underwriters will acquire good and marketable title to the Additional
Shares free and clear of any lien, claim, security interest, or other
encumbrance, restriction on transfer or other defect in title.
In rendering their opinions as aforesaid, counsel may rely upon an
opinion or opinions, each dated the Closing Date, of other counsel retained by
them or the Company as to laws of any jurisdiction other than the United States
or the States of California, or the General Corporation Law of the State of
Delaware, provided that (1) each such local counsel is acceptable to the
Representatives, (2) such reliance is expressly authorized by each opinion so
relied upon and a copy of each such opinion is delivered to the Representatives
and is, in form and substance satisfactory to them and their counsel, and (3)
counsel shall state in their opinions that they believe that they and the
Underwriters are justified in relying thereon.
(e) You shall have received on the Closing Date an opinion of
Xxxxxxx & Xxxxx L.L.P., counsel for the Underwriters, dated the Closing Date
and addressed to you, as Representatives of the several Underwriters, with
respect to the matters referred to in the first clause of paragraphs (i) and
(v) and paragraphs (vii), (viii) and (xii) of the foregoing paragraph (c) and
such other related matters as you may request.
(f) In addition, each of O'Melveny & Xxxxxx LLP and Xxxxxxx &
Xxxxx L.L.P. shall state that, although counsel has not undertaken, except as
otherwise indicated in their opinion, 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 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 not misleading or that the
Prospectus, as of its date (or the date of any amendment or supplement to the
Prospectus,) 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 make any statement with respect to the
financial statements and the notes thereto and the schedules and other
financial and statistical data included in the Registration Statement or the
Prospectus).
(g) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from Ernst & Young LLP and Price Waterhouse LLP, independent
certified public accountants, substantially in the forms heretofore approved by
you.
(h)(i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of
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the Company, shall be contemplated by the Commission at or prior to the Closing
Date; (ii) there shall not have been any change in the capital stock of the
Company nor any material increase in the short-term or long-term debt of the
Company (other than in the ordinary course of business) from that set forth or
contemplated in the Registration Statement or the Prospectus; (iii) there shall
not have been, since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as may otherwise be
stated in the Registration Statement and Prospectus, any material adverse
change in the condition (financial or other), business, prospects, properties,
net worth or results of operations of the Company and the Subsidiaries taken as
a whole; (iv) the Company and the Subsidiaries shall not have any liabilities
or obligations, direct or contingent (whether or not in the ordinary course of
business), that are material to the Company and the Subsidiaries, taken as a
whole, other than those reflected in the Registration Statement or the
Prospectus; and (v) all the representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of such date, and
you shall have received a certificate, dated the Closing Date or the Option
Closing Date, as the case may be, and signed by the chief executive officer and
the chief financial officer of the Company (or such other officers as are
acceptable to you), to the effect set forth in this Section 10(h) and in
Section 10(i) hereof. As used in this Section 10(h), the term "Registration
Statement" means the registration statement as declared effective by the
Commission as amended by the prospectus filed therewith pursuant to Rules 430A
and 424(b) of the Act, and the term "Prospectus" means the Prospectus in the
form first delivered to the Underwriters for use in completing sales.
(i) The Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of its agreements herein contained
and required to be performed or complied with by it hereunder at or prior to
the Closing Date.
(j) All the representations and warranties of the Selling
Stockholder contained in this Agreement shall be true and correct on and as of
the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date or the Option Closing Date, as the case may be, and you shall have
received a certificate, dated the Closing Date and signed by or on behalf of
the Selling Stockholder to the effect set forth in this Section 10(j) and in
Section 10(k) hereof.
(k) The Selling Stockholder shall not have failed at or prior to
the Closing Date to have performed or complied with any of their agreements
herein contained and required to be performed or complied with by them
hereunder at or prior to the Closing Date.
(l) The Shares shall have been listed or approved for quotation,
on notice of issuance, on the Nasdaq National Market.
(m) The Sellers shall have furnished or caused to be furnished to
you such further certificates and documents as you shall have requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and your counsel.
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Any certificate or document signed by any officer of the Company or
any Attorney-in-Fact or the Selling Stockholder and delivered to you, as
Representatives of the Underwriters, or to counsel for the Underwriters, shall
be deemed a representation and warranty by the Company or the Selling
Stockholder, as the case may be, to each Underwriter as to the statements made
therein.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of any Option
Closing Date of the conditions set forth in this Section 10, except that, if
any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (j) of this Section
10 shall be dated the Option Closing Date in question, the opinions called for
by paragraphs (c), (d), (e) and (f) of this Section 10 and the certificates and
letters referred to in paragraphs (h) through (k) of this Section 10 shall be
revised to reflect the sale of Additional Shares.
11. Expenses. The Sellers (in proportion to the number of Shares
being offered by each of them, including any Additional Shares which the
Underwriters shall have elected to purchase) agree to pay the following costs
and expenses and all other costs and expenses incident to the performance by
them of their obligations hereunder: (i) the preparation, printing or
reproduction, and filing with the Commission of the registration statement
(including financial statements and exhibits thereto), each Prepricing
Prospectus, the Prospectus, and each amendment or supplement to any of them;
(ii) the printing (or reproduction) and delivery (including postage, air
freight charges and charges for counting and packaging) of such copies of the
registration statement, each Prepricing Prospectus, the Prospectus, and all
amendments or supplements to any of them as may be reasonably requested for use
in connection with the offering and sale of the Shares; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the original issuance and sale of
the Shares; (iv) the printing (or reproduction) and delivery of this Agreement,
the preliminary and supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Shares; (v) the registration of the Shares under the Exchange Act and
the listing of the Shares on the Nasdaq National Market; (vi) the registration
or qualification of the Shares for offer and sale under the securities or Blue
Sky laws of the several states as provided in Section 5(g) hereof (including
the reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the fees and expenses of counsel for
the Underwriters in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; (viii) the transportation and
other expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the Shares; and (ix)
the fees and expenses of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company and the Selling
Stockholder. Nothing contained herein shall affect any agreement among the
Sellers with respect to such expenses.
12. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is
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executed and delivered, it is necessary for the registration statement or a
post-effective amendment thereto to be declared effective before the offering
of the Shares may commence, when notification of the effectiveness of the
registration statement or such post-effective amendment has been released by
the Commission. Until such time as this Agreement shall have become effective,
it may be terminated by the Company, by notifying you, or by you, as
Representatives of the several Underwriters, by notifying the Company and the
Selling Stockholder.
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the Underwriters
are obligated to purchase on the Closing Date, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Firm
Shares set forth opposite its name in Schedule II hereto bears to the aggregate
number of Firm Shares set forth opposite the names of all non-defaulting
Underwriters or in such other proportion as you may specify in accordance with
Section 20 of the Master Agreement Among Underwriters of Xxxxx Xxxxxx Inc., to
purchase the Shares which such defaulting Underwriter or Underwriters are
obligated, but fail or refuse, to purchase. If any one or more of the
Underwriters shall fail or refuse to purchase Shares which it or they are
obligated to purchase on the Closing Date and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Shares by one or more non- defaulting Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or 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 such default of any
such Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule II hereto who, with your approval and the approval of the Company,
purchases Shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
13. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company or any Selling Stockholder, by notice to the
Company, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Additional Shares), as the case
may be, (i) trading in securities generally on the New York Stock Exchange,
American Stock Exchange or the Nasdaq National Market shall have been suspended
or materially limited,
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(ii) a general moratorium on commercial banking activities in the States of New
York or California shall have been declared by either federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Shares
at the offering price to the public set forth on the cover page of the
Prospectus or to enforce contracts for the resale of the Shares by the
Underwriters. Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
14. Information Furnished by the Underwriters. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside cover page, and the statements in the first and third paragraphs under
the caption "Underwriting" in any Prepricing Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 7(b) and 9 hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5, 12
and 13 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to the Company, at the office of
the Company at Xxx Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: Xxxxxxx
X. Xxxxxx; or (ii) if to the Selling Stockholder, at o , Attention: o, or (iii)
if to you, as Representatives of the several Underwriters, care of Xxxxx Xxxxxx
Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Manager,
Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 9 hereof and their respective
successors and assigns, to the extent provided herein, and no other person
shall acquire or have any right under or by virtue of this Agreement. Neither
the term "successor" nor the term "successors and assigns" as used in this
Agreement shall include a purchaser from any Underwriter of any of the Shares
in his status as such purchaser.
16. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholder and the several Underwriters.
Very truly yours,
FIRST AVIATION SERVICES INC.
By:
----------------------------
The Selling Stockholder named in
Schedule I hereto
CANPARTNERS INVESTMENTS IV, LLC
By:
----------------------------
Attorney-in-Fact
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.
XXXXX XXXXXX INC.
XXXXXX, READ & CO. INC.
As Representatives of the Several Underwriters
By: XXXXX XXXXXX INC.
By:
-------------------------
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SCHEDULE I
FIRST AVIATION SERVICES INC.
Number of
Selling Stockholder Additional Shares
------------------- -----------------
Canpartners Investments IV, LLC . . . . . . . . . . . . . 585,000
1
30
SCHEDULE II
FIRST AVIATION SERVICES INC.
Number of
Underwriter
Firm Shares
-----------
Xxxxx Xxxxxx Inc . . . . . . . . . . . . . . . . . . . . . . .
Xxxxxx, Read & Co. Inc . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . .
1
