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EXHIBIT 4.6
EXECUTION COPY
KITTY HAWK, INC.
PLACEMENT AGREEMENT
November 13, 1997
Xxxxxx Xxxxxxx & Co. Incorporated,
for itself and the other several
Placement Agents named in Schedule I hereto
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
Kitty Hawk, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to you (the "Manager") and the other several
purchasers named in Schedule I hereto (collectively with the Manager, the
"Placement Agents") $340.0 million principal amount of its 9.95% Senior Secured
Notes due 2004 (the "Securities") to be issued pursuant to the provisions of an
Indenture to be dated as of November 19, 1997 (the "Indenture") among the
Company, the Guarantors (as defined below) and Bank One, NA, as trustee (the
"Trustee"). Pursuant to the Indenture, the obligations of the Company under
the Indenture and the Securities will be guaranteed, jointly and severally, by
each subsidiary of the Company other than American International Cargo, a
partnership formed under the laws of Michigan ("AIC") as of the Closing Date
(as defined below), (collectively, the "Guarantors"). The Placement Agents and
their direct and indirect transferees will have a first priority security in
the Collateral (as defined in the Indenture) pursuant to the Indenture and the
Escrow and Security Agreement. Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Indenture.
The Securities will be offered without being registered under
the Securities Act of 1933, as amended (the "Securities Act"), in reliance on
exemptions therefrom. The Placement Agents and their direct and indirect
transferees will be entitled to the benefits of a Registration Rights
Agreement, to be dated the Closing Date and to be substantially in the form
attached hereto as Annex A.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum (the "Preliminary Memorandum") and
will prepare a final offering memorandum (the "Final Memorandum" and, with the
Preliminary Memorandum, each a "Memorandum") setting forth or including a
description of the terms of the Securities, the terms of the offering and a
description of the Company and its business. As used herein, the
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term "Final Memorandum" shall mean the Final Memorandum in the form first used
to confirm sales of Securities hereunder.
1. Representations and Warranties. Reference is made to
the Agreement and Plan of Merger (the "Merger Agreement"), dated September 22,
1997, as amended on October 23, 1997 and October 29, 1997, among American
International Airways, Inc., a Michigan corporation, Kalitta Flying Service,
Inc., a Michigan corporation, Flight One Logistics, Inc., a Michigan
corporation, O.K. Turbines, Inc., a Michigan corporation, and American
International Travel, Inc., a Michigan corporation (together with AIC,
collectively, the "Kalitta Companies"), Xxxxxx Xxxxxxx, the Company, certain
subsidiaries of the company formed for the sole purpose of effecting the Merger
(as defined below) and M. Xxx Xxxxxxxxxxx. Pursuant to the Merger Agreement,
each of the Kalitta Companies will be merged (collectively, the "Merger") with
and into certain subsidiaries of the Company. As a result of the Merger, each
of the Kalitta Companies other than AIC will become a wholly owned subsidiary
of the Company and AIC will become a subsidiary of the Company.
(a) The Company represents and warrants to, and agrees
with, you that as of the date hereof:
(i) The Preliminary Memorandum as of the date thereof and
the Final Memorandum as of the date thereof and on the Closing Date do
not and will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except that the representations and warranties set
forth in this Section 1(a)(i) do not apply to statements or omissions
in either Memorandum based upon information furnished in writing by
you expressly for use therein.
(ii) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in each Memorandum and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole, after
giving pro forma effect to the Merger.
(iii) Each subsidiary of the Company as of the date hereof
is listed on Schedule II hereto. The subsidiaries on such schedule
denoted thereon with an asterisk will be Guarantors and each such
denoted Guarantor has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in each Memorandum
and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
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ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole, after giving pro forma effect to
the Merger. As of the Closing Date, the Company will own all of the
outstanding shares of capital stock of each of the Guarantors free and
clear of any and all claims, liens, pledges or other encumbrances,
other than liens granted to Xxxxx Fargo Bank (Texas), National
Association as referenced in the Final Memorandum.
(iv) This Agreement has been duly authorized, executed and
delivered by the Company.
(v) The Securities have been duly authorized and, when
each is executed, authenticated and delivered to and paid for by the
Placement Agents in accordance with the terms of this Agreement and
the Indenture, will be valid and binding obligations of the Company
and the Guarantors enforceable against the Company and each such
Guarantor, as the case may be, in accordance with their terms, subject
to the effect of any applicable bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers) or
reorganization, moratorium or similar laws affecting creditors' rights
generally and to the effect of general principles of equity, including
without limitation, concepts of materiality, good faith and fair
dealing (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(vi) The Indenture (including the first priority security
interest in certain of the Collateral granted thereunder to the
Trustee for the benefit of any Holders of the Securities and the
guarantee of the obligations of the Company by the Guarantors included
therein), the Escrow and Security Agreement, the Merger Agreement and
the Registration Rights Agreement have each been duly authorized,
executed and delivered by, and, assuming due authorization, execution
and delivery by the other parties thereto, are valid and binding
agreements of, the Company, enforceable against the Company in
accordance with their terms, subject to the effect of any applicable
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting creditors' rights generally and to the effect
of general principles of equity, including without limitation,
concepts of materiality, good faith and fair dealing (regardless of
whether enforcement is considered in a proceeding in equity or at
law).
(vii) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture, the Merger Agreement, the Registration Rights
Agreement, the Escrow and Security Agreement and the Securities will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries or any
judgment, order or decree of any
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governmental body, agency or court having jurisdiction over the
Company or any of its subsidiaries, and, with respect to the Merger
Agreement, other than as contemplated therein, no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its
obligations under this Agreement, the Indenture, the Merger Agreement,
the Registration Rights Agreement, the Escrow and Security Agreement
or the Securities (except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and
sale of the Securities and the shares of common stock to be issued to
Mr. Kalitta pursuant to the Merger Agreement and except for any such
failure to receive such consent, approval, authorization, order or
qualification that, singly or in the aggregate, would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole, after giving pro forma effect to the Merger).
(viii) There has not occurred any material adverse change,
or any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole,
after giving pro forma effect to the Merger, from that set forth in
the Final Memorandum.
(ix) There are no legal or governmental proceedings
pending or, to the knowledge of the Company, threatened to which the
Company or any of its subsidiaries as of the date hereof is a party or
to which any of the properties of the Company or any of its
subsidiaries as of the date hereof is subject other than proceedings
accurately described in all material respects in the Final Memorandum
and proceedings that would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole, after giving pro forma
effect to the Merger, or on the power or ability of the Company to
perform its obligations under this Agreement, the Indenture, the
Merger Agreement, the Registration Rights Agreement, the Escrow and
Security Agreement or the Securities or to consummate the transactions
contemplated by the Final Memorandum, or on the power or ability of
the Guarantors that are currently subsidiaries of the Company to
perform their obligations under the Indenture, the Registration Rights
Agreement or the Securities, or on the power or ability of Kitty
Hawk-AIA, Inc., Kitty Hawk-KFS, Inc., Kitty Hawk-FOL, Inc., Kitty
Hawk-O.K., Inc. or Kitty Hawk-AIT, Inc. (each, an "Acquisition Sub"
and collectively, the "Acquisition Subs") to perform their obligations
under the Merger Agreement.
(x) Neither the Company nor any affiliate (as defined in
Rule 501(b) of Regulation D under the Securities Act, an "Affiliate")
of the Company has directly, or through any agent, (A) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect
of, any security (as defined in the Securities Act) which is or will
be integrated with the sale of the Securities in a manner that would
require the registration under the Securities Act of the Securities or
(B) engaged in any form of general
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solicitation or general advertising in connection with the offering of
the Securities (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act.
(xi) The Company is not and, immediately after the
Transactions and the Refinancings (each as defined in the Final
Memorandum), will not be, an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended.
(xii) Assuming the accuracy of the representations and
warranties of the Placement Agents as set forth herein and without
giving effect to the terms of the Registration Rights Agreement, it is
not necessary in connection with the offer, sale and delivery of the
Securities to the Placement Agents in the manner contemplated by this
Agreement to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as
amended.
(xiii) The Company and its subsidiaries as of the date
hereof are in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole, after giving pro forma
effect to the Merger.
(xiv) The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92- 198, Laws of Florida).
(xv) Subject to the limitations on enforceability of the
Note Guarantees as set forth in the Indenture, each of the Guarantors
is, and immediately after the Closing (as defined below) will be,
Solvent. As used herein, the term "Solvent" means, with respect to
each Guarantor, on a particular date, that on such date (A) the fair
market value of the assets of such Guarantor is greater than the total
amount of liabilities (including contingent liabilities) of such
Guarantor, (B) the present fair salable value of the assets of such
Guarantor is greater than the amount that will be required to pay the
probable liabilities of such Guarantor on its debts as they become
absolute and matured, (C) such Guarantor is able to realize upon its
assets and pay its debts and other liabilities,
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including contingent obligations, as they mature and (D) such
Guarantor does not have an unreasonably small capital.
(xvi) Upon filing of the Indenture at the Federal Aviation
Administration ("FAA") registry and the filing of certain UCC-1s in
the States of Michigan and Texas with the respective Secretaries of
State, the grant of a security interest in the Collateral to the
Trustee (other than that granted pursuant to the Escrow and Security
Agreement) for the benefit of any Holders of the Securities will
constitute a first priority security interest in the Collateral (other
than that granted pursuant to the Escrow and Security Agreement),
enforceable as against all creditors of the Company or all creditors
of any subsidiary thereof following the Merger, subject to certain
limitations on enforceability as set forth in the Indenture. Such
filings will occur substantially contemporaneously with or prior to
the Closing Date.
(xvii) Upon the transfer to the Trustee of the Pledged
Securities, the acquisition by the Trustee of a security entitlement
with respect thereto, the maintenance of the Pledged Securities in a
securities account in accordance with the terms of the Escrow and
Security Agreement, and the filing of financing statements with the
offices of the Texas Secretary of State, the New York Secretary of
State and the New York County Recorder, the pledge of and grant of a
security interest in the Pledged Securities and the Escrow Account to
the Trustee for the benefit of any Holders of the Securities will
constitute a first priority perfected security interest in such
Pledged Securities and the Escrow Account.
(xviii) Other than the permanent approval of the Department
of Transportation (the "DOT") required to transfer the Kalitta
Companies foreign operating authority to the Company, each of the
Company and its subsidiaries as of the date thereof has all necessary
consents, authorizations, approvals, orders, certificates and permits
of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities (including
the FAA and all non-U.S. regulatory authorities), all self-regulatory
organizations and all courts and other tribunals, to own, lease,
license and use its properties and assets and to conduct its business
in the manner described in each Memorandum, except to the extent that
the failure to obtain or file would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole, after giving
pro forma effect to the Merger.
(xix) Each of the Company and each Acquisition Sub has
properly taken all corporate actions and obtained all consents of
stockholders necessary to approve the Merger. The Merger will occur
substantially contemporaneously with the closing hereunder.
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(xx) The Company's Registration Statement on Form S-1 (the
"Registration Statement"), filed with the Securities and Exchange
Commission (the "Commission") on September 22, 1997, with respect to
3,000,000 shares of common stock, par value $ .01 per share (the
"Common Stock") of the Company, as amended has become effective; no
stop order suspending the effectiveness of the Registration Statement
is in effect, and no proceedings for such purpose are pending before
or threatened by the Commission.
(xxi) No event of default has occurred or will occur prior
to the Closing Date under any material agreement to which the Company
or any of its subsidiaries is a party on a pro forma basis after
giving effect to the Transactions and the Refinancings.
(xxii) The pro forma financial statements and other pro forma
financial information included in each Memorandum present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements, have been properly compiled on the pro forma bases
described therein, and, in the opinion of the Company, the assumptions
used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(xxiii) The statements set forth in the Final Memorandum
under the caption "Description of the Notes" insofar as they purport
to constitute a summary of the terms of the Securities or the
Indenture are accurate and complete in all material respects.
(xxiv) The Merger Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of,
each of the Acquisition Subs, enforceable in accordance with its
terms, subject to the effect of any applicable bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
creditors' rights generally and to the effect of general principles of
equity, including without limitation, concepts of materiality, good
faith and fair dealing (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xxv) The execution and delivery by each of the Acquisition
Subs of, and the performance by each of the Acquisition Subs of its
obligations under, the Merger Agreement will not contravene any
provision of applicable law or the certificate or articles of
incorporation or by-laws of such Acquisition Sub or any agreement or
other instrument binding upon such Acquisition Sub or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over such Acquisition Sub, and no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by any of the
Acquisition Subs of its obligations under Merger Agreement, except for
any such failure to receive such consent, approval, authorization,
order or qualification that, singly or in the aggregate, would not
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have a material adverse effect on the Company and its subsidiaries,
taken as a whole, after giving pro forma effect to the Merger.
(b) Each of the Kalitta Companies (other than AIC)
represents and warrants to, and agrees with, you that as of the date hereof:
(i) The Preliminary Memorandum as of the date thereof and
the Final Memorandum as of the date thereof and on the Closing Date,
did not and will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein not misleading, in the light of the circumstances under which
they were made, not misleading, in each case to the extent related to
the Kalitta Companies, except that the representations and warranties
set forth in this Section 1(b)(i) do not apply to statements or
omissions in either Memorandum based upon information relating to any
Placement Agent furnished in writing to the Company by you expressly
for use therein.
(ii) Each of the Kalitta Companies (other than AIC) has
been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct
its business as described in each Memorandum and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole, after giving pro forma effect to the Merger.
(iii) AIC has been duly formed and exists as a
co-partnership under the laws of the State of Michigan, has the
requisite partnership power and authority to own its property and to
conduct its business as described in each Memorandum and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole, after giving pro forma effect to the Merger.
(iv) The Kalitta Companies have no subsidiaries.
(v) This Agreement has been duly authorized, executed and
delivered by each of the Kalitta Companies (other than AIC).
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(vi) The Merger Agreement has been duly authorized,
executed and delivered by each of the Kalitta Companies (other than
AIC), and assuming due authorization, execution and delivery by, and
binding effect upon the other parties thereto, is a valid and binding
agreement of, each of the Kalitta Companies (other than AIC),
enforceable against each of the Kalitta Companies (other than AIC) in
accordance with its terms subject to the effect of any applicable
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting creditors' rights generally and to the effect
of general principles of equity, including without limitation,
concepts of materiality, good faith and fair dealing (regardless of
whether enforcement is considered in a proceeding in equity or at
law).
(vii) The execution and delivery by each of the Kalitta
Companies (other than AIC) of, and the performance by each of the
Kalitta Companies (other than AIC) of its obligations under, this
Agreement, the Merger Agreement and the Indenture and the performance
by the Kalitta Companies (other than AIC) of their obligations under
the Securities will not contravene any provision of applicable law or
the articles of incorporation or by-laws of any of the Kalitta
Companies (other than AIC) or any agreement or other instrument
binding upon any of the Kalitta Companies (other than AIC) or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over any of the Kalitta Companies (other than
AIC), and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for
the performance by each of the Kalitta Companies (other than AIC) of
its obligations under this Agreement, the Merger Agreement, the
Indenture or the Securities (except such as may be required by the
securities or Blue Sky laws of the various states in connection with
the offer and sale of the Securities and the shares of common stock to
be issued to Mr. Kalitta pursuant to the Merger Agreement and except
for any such failure to receive such consent, approval, authorization,
order or qualification that, singly or in the aggregate, would not
have a material adverse effect to the Company and its subsidiaries,
taken as a whole, after giving pro forma effect to the Merger).
(viii) There has not occurred any material adverse change,
or any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Kalitta Companies, taken as a whole, from that set
forth in the Final Memorandum.
(ix) There are no legal or governmental proceedings
pending or, to the knowledge of the Kalitta Companies, threatened to
which any of the Kalitta Companies is a party or to which any of the
properties of any of the Kalitta Companies is subject other than
proceedings accurately described in all material respects in the Final
Memorandum and proceedings that would not have a material adverse
effect on the Kalitta Companies or on the power or ability of any of
the Kalitta Companies (other than AIC) to perform its
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obligations under this Agreement, the Indenture, the Securities, the
Escrow and Security Agreement or the Merger Agreement or to consummate
the transactions contemplated by the Final Memorandum.
(x) Each of the Kalitta Companies is 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) has received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct its respective business and (iii) is in
compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as
a whole, after giving pro forma effect to the Merger.
(xi) Each of the Kalitta Companies has all necessary
consents, authorizations, approvals, orders, certificates and permits
of and from, and have made all declarations and filings with, all
federal, state, local and other governmental authorities (including
the FAA and all non-U.S. regulatory authorities), all self- regulatory
organizations and all courts and other tribunals, to own, lease,
license and use its properties and assets and to conduct its business
in the manner described in each Memorandum, except to the extent that
the failure to obtain or file would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole, after giving
pro forma effect to the Merger and the Refinancings.
(xii) Each of the Kalitta Companies (other than AIC) has
properly taken all actions, corporate and otherwise, and obtained all
consents of stockholders or partners, as the case may be, necessary to
approve the Merger. The Merger will occur substantially
contemporaneously with the closing hereunder.
(xiii) No event of default has occurred or will occur prior
to the Closing Date under any material agreement to which any of the
Kalitta Companies is a party, on a pro forma basis after giving effect
to the Transactions and Refinancings.
(xiv) Neither the Kalitta Companies nor any affiliate of
the Kalitta Companies has directly, or through any agent, (A) sold,
offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act) which is
or will be integrated with the sale of the Securities in a manner that
would require the registration under the Securities Act of the
Securities or (B) engaged in any form of general solicitation or
general advertising in connection with the offering of the Securities
(as those terms are used in Regulation D under the Securities Act) or
in any
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manner involving a public offering within the meaning of Section 4(2)
of the Securities Act.
(c) The Guarantors each represent and warrant to, and
agree with, you that as of the date hereof:
(i) This Agreement has been duly authorized, executed and
delivered by each Guarantor.
(ii) The Indenture (including the first priority security
interest in certain of the Collateral granted thereunder to the
Trustee and any Holders of the Securities and the guarantee of the
obligations of the Company by the Guarantors included therein), the
Merger Agreement and the Registration Rights Agreement have each been
duly authorized, executed and delivered by, and are valid and binding
agreements of, each such Guarantor, enforceable in accordance with
their terms, subject to the effect of any applicable bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting creditors' rights generally and to the effect of general
principles of equity, including without limitation, concepts of
materiality, good faith and fair dealing (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(iii) The execution and delivery by each Guarantor of, and
the performance by each of the Guarantors of its obligations under,
this Agreement, the Indenture, the Merger Agreement, the Registration
Rights Agreement and the Escrow and Security Agreement and the
performance by each of the Guarantors of its obligations under the
Securities will not contravene any provision of applicable law or the
certificate or articles of incorporation or by-laws of any Guarantor
or any agreement or other instrument binding upon any Guarantor or any
of its subsidiaries or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over any
Guarantor, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for
the performance by each Guarantor of its obligations under this
Agreement, the Indenture, the Merger Agreement, the Registration
Rights Agreement or the Securities (except such as may be required by
the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Securities and the shares of common
stock to be issued to Mr. Kalitta pursuant to the Merger Agreement and
except for any such failure to receive consent, approval,
authorization, order or qualification that, singly or in the
aggregate, would not have a material adverse effect to the Company and
its subsidiaries, taken as a whole, after giving pro forma effect to
the Merger).
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(iv) It is not necessary in connection with the offer,
sale and delivery of the Securities to the Placement Agents in the
manner contemplated by this Agreement to qualify the Indenture under
the Trust Indenture Act of 1939, as amended.
(v) Subject to the limitations on enforceability of the
Note Guarantees as set forth in the Indenture, each of the Guarantors
is, and immediately after the Closing will be, Solvent.
(d) The Company and each of its subsidiaries that owns
any Collateral and each of the Kalitta Companies that owns any Collateral
represents and warrants to, and agrees with, you that as of the date hereof:
(i) The Company and each such subsidiary that owns any
Collateral and each of the Kalitta Companies that owns any Collateral
has good and marketable title to such Collateral which is owned by it;
each of the Aircraft owned by the Company or any of its subsidiaries
or any of the Kalitta Companies that is included in the Collateral is
duly registered in the name of the Company or one of its subsidiaries
or one of the Kalitta Companies pursuant to and in accordance with the
Federal Aviation Act of 1958, as amended (the "Aviation Act"), and
title to such Aircraft is vested in the Company or such subsidiary or
one of the Kalitta Companies; in each case title to such Aircraft is
held by the Company or one of its subsidiaries or the Kalitta
Companies, as the case may be, free and clear of all liens,
encumbrances and defects, except (x) those that arise by operation by
law and will be discharged in accordance with customary practices, (y)
those that are described in the Final Memorandum and (z) those that do
not materially affect the value of such Aircraft and do not interfere
with the use made and proposed to be made of such Aircraft by the
Company and its subsidiaries or the Kalitta Companies, as the case may
be.
(ii) Upon filing of the Indenture at the FAA registry and
the filing of certain UCC-1s in the States of Michigan and Texas with
the respective Secretaries of State, the grant of a security interest
in the Collateral to the Trustee (other than that granted pursuant to
the Escrow and Security Agreement) for the benefit of any Holders of
the Securities will constitute a first priority security interest in
the Collateral (other than that granted pursuant to the Escrow and
Security Agreement), enforceable as against all creditors of the
Company or all creditors of any subsidiary thereof following the
Merger, subject to certain limitations on enforceability as set forth
in the Indenture. Such filings will occur substantially
contemporaneously with or prior to the Closing Date.
2. Offering. You have advised the Company that the
Placement Agents will make an offering of the Securities purchased by the
Placement Agents hereunder on the terms set forth in the Final Memorandum as
soon as practicable after this Agreement is entered into as in your judgment is
advisable.
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3. Purchase and Delivery. The Company hereby agrees to
sell to the several Placement Agents, and the Placement Agents, upon the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agree, severally and not jointly, to purchase
from the Company the respective principal amount of Securities set forth in
Schedule I hereto opposite their names at a purchase price of 97% of the
principal amount thereof.
Payment for the Securities shall be made against delivery of
the Securities at a closing (the "Closing") to be held at the office of Xxxxxx
and Xxxxx, LLP, 3100 Nations Bank Plaza, 000 Xxxx Xxxxxx, Xxxxxx, Xxxxx, at
10:00 A.M., local time, on November 19, 1997 or at such other time on the same
or such other date, not later than December 19, 1997 as shall be designated in
writing by you. The time and date of such payment are herein referred to as
the Closing Date. Payment for the Securities shall be made by wire transfer of
immediately available funds to the respective bank accounts designated in
writing by the Company.
One or more certificates for the Securities shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not less than two full business days prior to the
Closing Date. The certificates evidencing the Securities shall be delivered to
you on the Closing Date for the respective accounts of the several Placement
Agents, with any transfer taxes payable in connection with the transfer of the
Securities to the Placement Agents duly paid.
4. Conditions to Closing. (a) The obligations of the
Company, each of the Guarantors and each of the Kalitta Companies, and the
several obligations of the Placement Agents hereunder are subject to the
condition that (i) the Registration Statement shall have become effective not
later than the date hereof, (ii) the Merger shall occur substantially
contemporaneously with the Closing hereunder and (iii) the closing of the
offering by the Company and certain selling stockholders named in the
Registration Statement on Form S-1 of approximately 3,000,000 shares of Common
Stock shall occur substantially contemporaneously with the Closing hereunder.
(b) The several obligations of the Placement Agents under
this Agreement to purchase the Securities will be subject to the following
conditions:
(i) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date,
(A) there shall not have occurred any
downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the
possible change, in the rating accorded the Securities by
any "nationally recognized
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statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act;
and
(B) there shall not have occurred any change, or
any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings,
business or operations, of the Company and its
subsidiaries, taken as a whole, after giving pro forma
effect to the Merger, from that set forth in the Final
Memorandum that, in your judgment, is material and adverse
and that makes it, in your judgment, impracticable to
market the Securities on the terms and in the manner
contemplated in the Final Memorandum. For the purposes
hereof, it is agreed that (i) the loss of the operating
certificate of any of the Company, its subsidiaries or the
Kalitta Companies, (ii) any regulatory order to materially
curtail or otherwise materially limit the use of any of the
aircraft of the Company or its subsidiaries or the Kalitta
Companies (other than pursuant to an existing Notice of
Proposed Rule Making issued by the FAA, the DOT, the
National Transportation Safety Board ("NTSB") or any other
regulatory authority) or (iii) any accident (as defined in
the regulations of the NTSB) of a material nature involving
any aircraft (other than turbo-prop or piston aircraft)
operated by the Company, its subsidiaries or the Kalitta
Companies would constitute a material and adverse change in
the condition of Company and its subsidiaries, taken as a
whole, after giving pro forma effect to the Merger.
(ii) You shall have received on the Closing Date
certificates, dated the Closing Date and signed by (i) an executive
officer of the Company (solely in his capacity as such) (ii) an
executive officer of each of the Guarantors (solely in his capacity as
such) and (iii) an executive officer of each of the Kalitta Companies
(other than AIC) (solely in his capacity as such) to the effect that
the representations and warranties of the Company, the Guarantors and
the Kalitta Companies (other than AIC), respectively, contained in
this Agreement are true and correct as of the Closing Date and that
the Company, the Guarantors and the Kalitta Companies (other than
AIC), respectively, have each complied with all of the agreements and
satisfied all of the conditions on their part to be performed or
satisfied hereunder by it on or before the Closing Date.
The officer signing and delivering such certificates of the
Company, the Kalitta Companies (other than AIC) and the Guarantors may
rely upon the best of his knowledge as to proceedings threatened and
such certificates will be expressly so qualified.
(iii) You shall have received on the Closing Date an
opinion of Xxxxxx and Xxxxx, LLP, independent counsel for the Company,
dated the Closing Date, to the effect set forth in Exhibit A.
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(iv) You shall have received on the Closing Date opinions
of Xxxxx, Xxxxxx & Xxxxxxx, P.C., counsel for the Company, dated the
Closing Date, to the effect set forth in Exhibit B.
(v) You shall have received on the Closing Date an
opinion of Miller, Canfield, Paddock & Stone, P.L.C., independent
special counsel for the Kalitta Companies, dated the Closing Date, to
the effect set forth in Exhibit C.
(vi) You shall have received on the Closing Date an
opinion of Kelsey Law Offices, P.C., independent counsel for the
Kalitta Companies, dated the Closing Date, to the effect set forth in
Exhibit D.
(vii) You shall have received on the Closing Date an
opinion of Shearman & Sterling, counsel for the Placement Agents,
dated the Closing Date, in form and substance reasonably satisfactory
to you covering (i) due authorization, execution and delivery of this
Agreement, the Escrow and Security Agreement, the Merger Agreement and
the Registration Rights Agreement, (ii) the validity of the
Securities, (iii) the accuracy of certain legal summaries in the Final
Memorandum and (iv) the private placement of the Securities. You
shall have received from Shearman & Sterling a letter, in form and
substance reasonably satisfactory to you, commenting on the adequacy
of the disclosure contained in the Memorandum.
(viii) You shall have received on each of the date hereof
and the Closing Date a letter, dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to you,
from Ernst & Young LLP, the Company's independent public accountants,
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements, and certain other financial information
including pro forma financial statements contained in the Memorandum.
(ix) You shall have received on each of the date hereof
and the Closing Date a letter, dated the date hereof of the Closing
Date, as the case may be, in form and substance satisfactory to you,
from Deloitte & Touche, LLP, the Kalitta Companies' independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
in the respect to the financial statements and certain other financial
information, other than the pro forma financial statements contained
in the Memorandum.
5. Covenants of the Company. In further consideration
of the agreements of the Placement Agents contained in this Agreement, the
Company and the Guarantors covenant as follows:
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(a) To furnish to you, without charge, during the period
mentioned in paragraph (c) below, as many copies of the Final
Memorandum, any documents incorporated by reference therein and any
supplements and amendments thereto as you shall reasonably request.
(b) Before amending or supplementing either Memorandum,
to furnish to you a copy of each such proposed amendment or supplement
and not to use any such proposed amendment or supplement to which you
reasonably object in writing.
(c) If, during such period after the date hereof and
prior to the date on which all of the Securities shall have been sold
by the Placement Agents, any event shall occur or condition exist as a
result of which it is necessary in your judgment to amend or
supplement the Final Memorandum in order to make the statements
therein, in the light of the circumstances when such Memorandum is
delivered to a purchaser, not misleading, or if, with the reasonable
opinion of counsel to the Placement Agents it is necessary to amend or
supplement such Memorandum to comply with applicable law, forthwith to
prepare and furnish, at its own expense, to the Placement Agents,
either amendments or supplements to such Memorandum so that the
statements in such Memorandum as so amended or supplemented will not,
in the light of the circumstances when such Memorandum is delivered to
a purchaser, be misleading or so that such Memorandum, as so amended
or supplemented, will comply with applicable law.
(d) To endeavor to qualify the Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions as
you shall reasonably request.
(e) Whether or not any sale of such Securities is
consummated, to pay all expenses incident to the performance of its
obligations under this Agreement, including: (i) the preparation of
each Memorandum and all amendments and supplements thereto, (ii) the
preparation, issuance and delivery of the Securities, (iii) the fees
and disbursements of the Company's counsel and accountants and the
Trustee and its counsel, (iv) the qualification of such Securities
under securities or Blue Sky laws in accordance with the provisions of
Section 5(d), including filing fees and the fees and disbursements of
counsel for the Placement Agents in connection therewith and in
connection with the preparation of any Blue Sky or legal investment
memoranda, (v) the printing and delivery to the Placement Agents in
quantities as hereinabove stated of copies of the Memorandum and any
amendments or supplements thereto, (vi) any fees charged by rating
agencies for the rating of such Securities, (vii) all reasonable
document production charges and expenses of counsel to the Placement
Agents (but not including their fees for professional services) in
connection with the preparation of this Agreement, (viii) the fees and
expenses, if any, incurred in connection with the admission of such
Securities for trading in PORTAL and the Luxembourg Stock Exchange,
(ix) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in
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connection with the marketing of the Securities, including, without
limitation, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of
the Company, travel and lodging expense of the representatives and
officers of the Company and any such consultants, and the cost of any
aircraft chartered in connection with the road show, and (x) all other
costs and expenses incident to the performance of the obligations of
the Company hereunder for which provision is not otherwise made in
this Section.
(f) Neither the Company nor any Affiliate will sell,
offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the Securities Act) which could
be integrated with the sale of the Securities in a manner which would
require the registration under the Securities Act of the Securities.
(g) Not to solicit any offer to buy or offer or sell the
Securities by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act.
(h) While any of the Securities remain outstanding, to
make available, upon request, to any seller of such Securities the
information specified in Rule 144A(d)(4) under the Securities Act,
unless the Company and the Guarantors are then subject to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(i) None of the Company, the Guarantors, their Affiliates
or any person acting on behalf of any of them (other than the
Placement Agents) will engage in any directed selling efforts (as that
term is defined in Regulation S) with respect to the Securities, and
the Company and its Affiliates and each person acting on its or their
behalf (other than the Placement Agents) will comply with the offering
restrictions of Regulation S.
(j) To use their reasonable best efforts to permit the
Securities to be (i) designated PORTAL securities in accordance with
the rules and regulations adopted by the National Association of
Securities Dealers, Inc. relating to trading in the PORTAL Market and
(ii) listed on the Luxembourg Stock Exchange.
6. Representations and Warranties of the Placement
Agent; Offering of Securities; Restrictions on Transfer. (a) Each Placement
Agent, severally and not jointly, represents and warrants to the Company, each
of the Guarantors and each of the Kalitta Companies that such Placement Agent
is a qualified institutional buyer as defined in Rule 144A under the Securities
Act (a "QIB"). Each Placement Agent, severally and not jointly, agrees with
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the Company that (i) it will not solicit offers for, or offer or sell, such
Securities by any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act and (ii) it will solicit offers for such Securities only from,
and will offer such Securities only to, persons that it reasonably believes to
be (A) in the case of offers inside the United States, (x) QIBs or (y) other
institutional accredited investors (as defined in Rule 501(a) (1), (2), (3) or
(7) under the Securities Act) ("institutional accredited investors") that,
prior to their purchase of the Securities, deliver to such Placement Agent a
letter containing the representations and agreements set forth in Annex A to
the Memorandum and (B) in the case of offers outside the United States, to
persons other than U.S. persons ("foreign purchasers", which term shall
include dealers or other professional fiduciaries in the United States acting
on a discretionary basis for foreign beneficial owners (other than an estate or
trust)) that, in each case, in purchasing such Securities are deemed to have
represented and agreed as provided in the Final Memorandum under the caption
"Transfer Restrictions."
(b) Each Placement Agent, severally and not jointly,
represents, warrants, and agrees with respect to offers and sales outside the
United States that:
(i) it understands that no action has been or will be
taken in any jurisdiction by the Company that would permit a public
offering of the Securities, or possession or distribution of either
Memorandum or any other offering or publicity material relating to the
Securities, in any country or jurisdiction where action for that
purpose is required;
(ii) such Placement Agent will comply with all applicable
laws and regulations in each jurisdiction in which it acquires,
offers, sells or delivers Securities or has in its possession or
distributes either Memorandum or any such other material, in all cases
at its own expense;
(iii) the Securities have not been and will not be
registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S under the Securities
Act or pursuant to an exemption from the registration requirements of
the Securities Act;
(iv) such Placement Agent has (A) not offered or sold and
will not offer or sell any Securities to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public
in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995 (the "Regulations"); (B) complied and will
comply with all applicable provisions of the Financial Services Xxx
0000 and the Regulations with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United
Kingdom; and (C)
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only issued or passed on and will only issue or pass on to any person
in the United Kingdom any document received by it in connection with
the issue of the Securities if that person is of a kind described in
Article 11(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1995 or is a person to whom such
document may otherwise lawfully be issued or passed on; and
(v) such Placement Agent understands that the Securities
have not been and will not be registered under the Securities and
Exchange Law of Japan, and represents that it has not offered or sold,
and agrees that it will not offer or sell, any Securities, directly or
indirectly in Japan or to any resident of Japan except (A) pursuant to
an exemption from the registration requirements of the Securities and
Exchange Law of Japan and (B) in compliance with any other applicable
requirements of Japanese law.
7. Indemnification and Contribution. (a) The Company
and the Guarantors agree, jointly and severally, to indemnify and hold harmless
each Placement Agent, and each person, if any, who controls such Placement
Agent within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, or is under common control with, or is controlled by,
such Placement Agent, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by any Placement Agent or any such controlling of
affiliated person in connection with defending or investigating any such action
or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in either Memorandum (as amended or supplemented if the
Company and the Guarantors shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
furnished to the Company in writing by such Placement Agent through you
expressly for use therein; provided, however, that the indemnification
contained in this paragraph with respect to any Preliminary Memorandum shall
not inure to the benefit of a Placement Agent (or to the benefit of any
director or officer of such Placement Agent or any person controlling or under
common control with such Placement Agent) on account of any such loss, claim,
damage, liability or expense arising from the sale of the Securities by such
Placement Agent to any person if a copy of the Final Memorandum shall not have
been delivered or sent to such person at or prior to the written confirmation
of such sale, and the untrue statement or alleged untrue statement or omission
or alleged omission of a material fact contained in such Preliminary Memorandum
was corrected in the Final Memorandum.
(b) Each Placement Agent agrees, severally and not
jointly, to indemnify and hold harmless the Company and the Guarantors, their
directors and officers, and each person, if any, who controls the Company and
the Guarantors within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing
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indemnity from the Company and the Guarantors to such Placement Agent, but only
with reference to information relating to such Placement Agent furnished to the
Company and the Guarantors in writing by such Placement Agent through you
expressly for use in either Memorandum or any amendments or supplements
thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and expenses
shall be reimbursed as they are incurred. Such firm shall be designated in
writing by Xxxxxx Xxxxxxx & Co. Incorporated in the case of parties indemnified
pursuant to paragraph (a) above and by the Company and the Guarantors in the
case of parties indemnified pursuant to paragraph (b) above. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by the
second and third sentences of this paragraph, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
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(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 7 is unavailable to an indemnified party
or insufficient in respect of any losses, claims, damages or liabilities, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors, on the one hand, and the
Placement Agents, on the other hand, from the offering of such Securities 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 Guarantors on the one hand and the Placement Agents on
the other hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Guarantors on the one hand and the Placement Agents on the other hand in
connection with the offering of such Securities shall be deemed to be in the
same respective proportions as the net proceeds from the offering of such
Securities (before deducting expenses) received by the Company and the
Guarantors and the total discounts and commissions received by the Placement
Agents in respect thereof bear to the aggregate offering price of such
Securities. The relative fault of the Company and the Guarantors on the one
hand and of the Placement Agents 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 Guarantors
on the one hand or by the Placement Agents on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Placement Agents' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective principal amount of Securities they have purchased hereunder,
and not joint.
(e) The Company, each of the Guarantors and each of the
Placement Agents agree that it would not be just or equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
Placement Agents 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 and liabilities
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 or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no
Placement Agent shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities resold by it in the
initial placement of such Securities were offered to investors exceeds the
amount of any damages that such Placement Agent 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 Securities Act) shall be entitled to contribution from
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any person who was not guilty of such fraudulent misrepresentation. The
indemnity and contribution provisions contained in this Section 7 and the
representations and warranties of the Company and the Guarantors contained in
this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of the Placement Agents or any person controlling the Placement Agents
or by or on behalf of the Company, its officers or directors or any person
controlling the Company or the Guarantors, their officers or directors or any
Person controlling the Guarantors and (iii) acceptance of and payment for any
of the Securities. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
You hereby confirm to the Company that the last full paragraph
of text on the front cover page of the Final Memorandum and the statements
under the caption "Private Placement" is the only information that has been
furnished to the Company by you expressly for use in the Final Memorandum.
8. Termination. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or the
Luxembourg Stock Exchange, (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in your reasonable judgment, is
material and adverse or (v) (A) the Company or any of its subsidiaries or any
of the Kalitta Companies (1) loses its FAA operating certificate, or (2)
receives any regulatory order which materially curtails or otherwise materially
limits the use of any of the aircraft of the Company or its subsidiaries or the
Kalitta Companies (other than pursuant to an existing Notice of Proposed Rule
Making issued by the FAA, the DOT, the NTSB or any other regulatory authority),
or (B) there shall occur any accident (as defined in the regulations of the
NTSB) of a material nature involving any aircraft (other than turbo-prop or
piston aircraft) operated by the Company, its subsidiaries or the Kalitta
Companies and (b) in the case of any of the events specified in clauses (a)(i)
through (v), such event singly or together with any other such event makes it,
in your reasonable judgment, impracticable to market the Securities on the
terms and in the manner contemplated in the Final Memorandum.
9. Miscellaneous. If, on the Closing Date, any one or
more of the Placement Agents shall fail or refuse to purchase Securities that
it or they have agreed to purchase hereunder on such date, and the aggregate
principal amount of Securities which such defaulting Placement Agent or
Placement Agents agreed but failed or refused to purchase is not more than
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one-tenth of the aggregate principal amount of Securities to be purchased on
such date, the other Placement Agents shall be obligated severally in the
proportions that the principal amount of Securities set forth opposite their
respective names in Schedule I bears to the aggregate principal amount of
Securities set forth opposite the names of all such non- defaulting Placement
Agents, or in such other proportions as you may specify, to purchase the
Securities which such defaulting Placement Agent or Placement Agents agreed but
failed or refused to purchase on such date; provided that in no event shall the
principal amount of Securities that any Placement Agent has agreed to purchase
pursuant to Section 3 be increased pursuant to this Section 9 by an amount in
excess of one-ninth of such principal amount of Securities without the written
consent of such Placement Agent. If, on the Closing Date, any Placement Agent
or Placement Agents shall fail or refuse to purchase Securities which it or
they have agreed to purchase hereunder on such date and the aggregate principal
amount of Securities with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of Securities to be purchased on
such date and arrangements satisfactory to you and the Company for the purchase
of such Securities are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Placement Agent or of the Company. In any such case 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 Final
Memorandum or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Placement
Agent from liability in respect of any default of such Placement Agent under
this Agreement.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
If this Agreement shall be terminated by the Placement Agents,
or any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Placement Agents or such
Placement Agents as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Placement Agents in
connection with this Agreement or the offering contemplated hereunder.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
24
Please confirm your agreement to the foregoing by signing in
the space provided below for that purpose and returning to us a copy hereof,
whereupon this Agreement shall constitute a binding agreement between us.
Very truly yours,
KITTY HAWK, INC.
By:
----------------------------------
KITTY HAWK CHARTER, INC.
By:
----------------------------------
AIRCRAFT LEASING, INC.
By:
----------------------------------
KITTY HAWK AIRCARGO, INC.
By:
----------------------------------
AMERICAN INTERNATIONAL
AIRWAYS, INC.
By:
----------------------------------
25
KALITTA FLYING SERVICE,
INC.
By:
----------------------------------
FLIGHT ONE LOGISTICS, INC.
By:
----------------------------------
O.K. TURBINES, INC.
By:
----------------------------------
AMERICAN INTERNATIONAL
TRAVEL, INC.
By:
----------------------------------
26
Agreed, November 19, 1997
Xxxxxx Xxxxxxx & Co.
Incorporated
Acting severally on behalf
of itself and the several
Placement Agents named herein.
By Xxxxxx Xxxxxxx & Co.
Incorporated
By:
-----------------------------
27
SCHEDULE I
Principal Amount of
Securities
Placement Agent to Be Purchased
--------------- ---------------------
Xxxxxx Xxxxxxx & Co. Incorporated $204,000,000
BT Alex. Xxxxx Incorporated $102,000,000
Fieldstone FPCG Services, L.P. $ 34,000,000
------------
Total . . . . . . . . . . . $340,000,000
============
28
SCHEDULE II
Ownership State of
Subsidiary Percentage Incorporation
---------- ---------- -------------
Kitty Hawk Charter, Inc.* 100% Texas
Aircraft Leasing, Inc.* 100% Texas
Kitty Hawk Aircargo, Inc.* 100% Texas
Kitty Hawk - AIA, Inc. 100% Michigan
Kitty Hawk - KFS, Inc. 100% Michigan
Kitty Hawk - FOL, Inc. 100% Michigan
Kitty Hawk - O.K., Inc. 100% Michigan
Kitty Hawk - AIT, Inc. 100% Michigan
29
EXHIBIT A
[To be provided by H&B]
Include H&B statement regarding good standing certificates of
Aircraft Leasing, Inc.
30
EXHIBIT B
[Xxx Xxxxx]
Opinion of Counsel
for the Company
The opinion of the counsel for the Company to be delivered pursuant to
Section 4(iv) of the Placement Agreement shall be to the effect that:
(A) to the best of such counsel's knowledge, the
execution and delivery by the Company of, and the performance by the
Company of its obligations under, the Placement Agreement, the
Indenture, the Merger Agreement, the Registration Rights Agreement,
the Escrow and Security Agreement and the Securities will not
contravene any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any subsidiary
(except for any such contravention that, singly or in the aggregate,
would not have a material adverse effect to the Company and its
subsidiaries, taken as a whole, after giving pro forma effect to the
Merger), and, with respect to the Merger Agreement, other than as
contemplated by the Merger Agreement, no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its
obligations under the Placement Agreement, the Indenture, the Merger
Agreement, the Registration Rights Agreement, the Escrow and Security
Agreement or the Securities (except such as may be required by the
securities or Blue Sky laws of the various states in connection with
the offer and sale of the Securities by the Placement Agents and the
shares of common stock to be issued to Mr. Kalitta pursuant to the
Merger Agreement and except for such failure to receive such consent,
approval, authorization, order or qualification that, singly or in the
aggregate, would not have a material adverse effect to the Company and
its subsidiaries, taken as a whole, after giving pro forma effect to
the Merger);
(B) to the best of such counsel's knowledge, the
execution and delivery by each of the Guarantors (other than the
Kalitta Companies) of, and the performance by each such Guarantor of
its obligations under, the Placement Agreement, the Escrow and
Security Agreement, the Indenture and the Registration Rights
Agreement and the performance by each such Guarantor of its
obligations under the Securities will not contravene any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over such Guarantor (except for any such contravention
that, singly or in the aggregate, would not have a material adverse
effect to the Company and its subsidiaries, taken as a whole, after
giving pro forma effect to the Merger), and no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by such Guarantor or
its subsidiaries of its obligations under the Placement Agreement, the
Indenture, the Registration Rights Agreement or the Securities,
(except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the
Securities by
B-1
31
the Placement Agents and the shares of common stock to be issued to
Mr. Kalitta pursuant to the Merger Agreement and except for such
failure to such receive consent, approval, authorization, order or
qualification that, singly or in the aggregate, would not have a
material adverse effect to the Company and its subsidiaries, taken as
a whole after giving pro forma effect to the Merger);
(C) such counsel does not know of any legal or
governmental proceeding pending or threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties
of the Company or any of its subsidiaries is subject other than
proceedings accurately described in all material respects in the Final
Memorandum and proceedings that such counsel believes are not likely
to have a material adverse effect on the Company and its subsidiaries,
taken as a whole after giving pro forma effect to the Merger, or on
the power or ability of the Company to perform its obligations under
the Placement Agreement, the Indenture, the Merger Agreement, the
Registration Rights Agreement, the Escrow and Security Agreement or
the Securities or to consummate the transactions contemplated by the
Final Memorandum, or on the power or ability of the Guarantors (other
than the Kalitta Companies) to perform their obligations under the
Placement Agreement, the Indenture, the Registration Rights Agreement
or the Securities;
(D) Upon filing of the Indenture at the Federal Aviation
Administration ("FAA") registry and the filing of certain UCC-1s in
the States of Michigan and Texas, the grant of a security interest in
the Collateral (other than the Pledged Securities and the Escrow
Account) for the benefit of any Holders of the Securities will
constitute a first priority security interest in the Collateral (other
than the Pledged Securities and the Escrow Account), enforceable as
against all creditors of the Company and all creditors of any
subsidiary thereof, subject to certain limitations on enforceability
as set forth in the Indenture; and
(E) (i) The Indenture is in due form for recording in
accordance with the Aviation Act, and (ii) assuming that the Indenture
is properly recorded in accordance with the Aviation Act, the Lien of
the Indenture creates for the benefit of the Trustee a valid first
priority security interest in the Aircraft in the United States.
B-2
32
EXHIBIT C
[Xxxxxx, Xxxxxxxx]
Opinion of Special Counsel
for the Kalitta Companies
The opinion of the special counsel for the Kalitta Companies
to be delivered pursuant to Section 4(v) of the Placement Agreement shall be to
the effect that:
(A) each of the Kalitta Companies (other than AIC) is
duly incorporated, validly existing as a corporation under the laws of
the State of Michigan and has the requisite corporate power and
authority to own its property and to conduct its business as described
in the Final Memorandum (references herein to the Final Memorandum
being taken to mean the same, as amended or supplemented);
(B) the Placement Agreement has been duly authorized,
executed and delivered by each of the Kalitta Companies (other than
AIC);
(C) the Merger Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of,
each of the Kalitta Companies (other than AIC), enforceable in
accordance with its terms except as (x) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (y) rights of acceleration, if
applicable, and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(D) the execution and delivery by each of the Kalitta
Companies (other than AIC) of, and the performance by each of the
Kalitta Companies (other than AIC) of its obligations under, the
Placement Agreement, the Merger Agreement and the Indenture and the
performance by the Kalitta Companies (other than AIC) of their
obligations under the Securities will not contravene its articles of
incorporation or by-laws; and
(E) the Kalitta Companies have properly taken all
actions, corporate and otherwise, and obtained all consents of
stockholders, necessary to approve the Merger; the Merger will be
effective upon the filing of certificates of merger with the
Department of Consumer and Industry Services of the State of Michigan
in accordance with the terms and provisions of the Merger Agreement.
Miller, Canfield, Paddock & Stone, P.L.C. shall confirm in its
opinion letter that it has received certificates of good standing dated not
earlier than five days prior to the Closing Date for the Company from the State
of Michigan, which certificates shall be attached as an exhibit to such
opinion.
C-1
33
Subject to the qualification that such counsel has not
undertaken in its opinion to independently determine or otherwise verify,
and does not assume any responsibility for, the accuracy or completeness of the
statements in the Final Memorandum, and based solely upon the participation of
such counsel in various meetings at which representatives of each of Kitty Hawk,
the Kalitta Companies and the Placement Agents and their respective counsel and
independent accountants were at various times present, nothing has come to the
attention of such counsel that has caused it to believe that anything contained
in the Final Memorandum relating to the Kalitta Companies and their respective
businesses and assets, as of the date of the Final Memorandum and as of the
Closing Date, contained an untrue statement of material fact or omitted to state
a material fact required to be stated therein to make the statements therein
relating to the Kalitta Companies, in the light of the circumstances under which
they were made, not misleading (it being understood that such counsel need
express no opinion with respect to the financial statements and the notes
thereto and the schedules and the other financial or statistical data included
in the Final Memorandum).
In rendering such opinions, such counsel may make
qualifications and assumptions customary to the transactions contemplated by
this Agreement, including, without limitation, that such opinions shall be
limited exclusively and in all respects to the federal laws of the United
States of America and the laws of the State of Michigan (but not including the
laws of the any of the political subdivisions thereof), and shall not be deemed
to be opinions with respect to the laws of any other state or foreign
jurisdiction; because the Merger Agreement and the Placement Agreement are by
their terms governed respectively by the laws of the States of Texas and New
York, for purposes of its opinions, such counsel may assume that the internal
substantive laws of the State of Michigan govern the Merger Agreement and the
Placement Agreement rather than the laws of the States of Texas and New York,
and need not express any opinion as to what law will actually govern the Merger
Agreement or the Placement Agreement.
C-2
34
EXHIBIT D
[Kelsey]
Opinion of Counsel
for the Kalitta Companies
The opinion of the counsel for the Kalitta Companies to be
delivered pursuant to Section 4(vi) of the Placement Agreement shall be to the
effect that:
(A) the execution and delivery by each of the Kalitta
Companies (other than AIC) of, and the performance by each of the
Kalitta Companies (other than AIC) of its obligations under, the
Placement Agreement, the Merger Agreement, the Registration Rights
Agreement and the Indenture and the performance by the Kalitta
Companies of their obligations under the Securities will not
contravene (i) to such counsel's knowledge, any agreement or other
instrument binding upon any of the Kalitta Companies that is material
to the Kalitta Companies, taken as a whole, or (ii) to such counsel's
knowledge, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over any of the Kalitta Companies
(other than AIC), and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for
the performance by any of the Kalitta Companies (other than AIC) or
its subsidiaries of their obligations under the Placement Agreement,
the Merger Agreement, the Indenture, the Registration Rights Agreement
or the Securities; and
(B) such counsel does not know of any legal or
governmental proceedings pending or threatened to which any of the
Kalitta Companies is a party or to which any of the properties of any
of the Kalitta Companies is subject other than proceedings fairly
summarized in all material respects in the Final Memorandum and
proceedings which such counsel believes are not likely to have a
material adverse effect on the Kalitta Companies, taken as a whole, or
on the power or ability of any of the Kalitta Companies to perform
their obligations under the Placement Agreement, the Indenture, the
Registration Rights Agreement, the Securities or the Merger Agreement
or to consummate the transactions contemplated by the Final
Memorandum.
Kelsey Law Offices, P.C. shall also confirm that, to its
knowledge (based solely upon the investigation described in such
opinion letter), the description in the Final Memorandum under the
caption "Business--Legal Proceedings" constitutes a fair summary in
all material respects of such proceedings insofar as they relate to
the Kalitta Companies.
