2,766,667 Shares
HAWKER PACIFIC AEROSPACE
Common Stock
____________, 1998
UNDERWRITING AGREEMENT
EVEREN Securities, Inc.
The Xxxxxxx Companies Incorporated
2,766,667 Shares
HAWKER PACIFIC AEROSPACE
Common Stock
(no par value)
UNDERWRITING AGREEMENT
________, 1998
EVEREN Securities, Inc.
The Xxxxxxx Companies Incorporated
As Representatives of
the Several Underwriters
c/o EVEREN Securities, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Ladies and Gentlemen:
Hawker Pacific Aerospace, a California corporation (the "COMPANY"), and
Xxxxxxx X. Xxxxxxx (the "SELLING SHAREHOLDER") confirm their agreements with
each other and the several underwriters listed in Schedule I hereto (the
"UNDERWRITERS"), for whom EVEREN Securities, Inc. and The Xxxxxxx Companies
Incorporated (collectively, the "REPRESENTATIVES") have been duly authorized to
act as representatives, as follows:
1. THE SHARES. Subject to the terms and conditions set forth in this
agreement (the "Agreement"), the Company proposes to issue and sell 2,600,000
shares of its authorized but unissued Common Stock, no par value (the "COMMON
STOCK"), to the several Underwriters and the Selling Shareholder proposes to
sell an aggregate of 166,667 shares of the Company's authorized and outstanding
Common Stock to the several Underwriters. The 2,600,000 shares of Common Stock
of the Company to be sold by the Company are hereinafter called the "COMPANY
SHARES" and the 166,667 shares of Common Stock to be sold by the Selling
Shareholder are hereinafter called the "SELLING SHAREHOLDER SHARES." The
Company Shares and the Selling Shareholder Shares are hereinafter collectively
referred to as the "FIRM SHARES."
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The Selling Shareholder also proposes to grant to the Underwriters an option to
purchase up to 415,000 additional shares of Common Stock (the "OPTION SHARES")
if requested by the Underwriters as provided in Section 3 hereof. In addition,
the Company proposes to sell to you, individually and not in your capacity as
Representatives, five-year warrants (the "REPRESENTATIVE'S WARRANTS") to
purchase up to 222,716 shares of Common Stock (the "REPRESENTATIVE'S WARRANT
STOCK"), which sale will be consummated in accordance with the terms and
conditions of the Representative's Warrant Agreement (the "REPRESENTATIVE'S
WARRANT AGREEMENT"), the form of which is filed as an exhibit to the
Registration Statement described below. The Firm Shares and the Option Shares
are herein collectively called the "SHARES."
The Company and the Selling Shareholder hereby confirm their respective
agreements with the Underwriters as follows:
2. 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 on Form S-1 (File No. 333-40295) including a
prospectus, relating to the Shares, that may have been amended; each such
amendment was so prepared and filed. The registration statement, as amended at
the time when it became or becomes effective, including all financial schedules
and exhibits thereto and all of the information (if any) deemed to be part of
the registration statement at the time of its effectiveness pursuant to
Rule 430A under the Act ("RULE 430A"), is hereinafter referred to as the
"REGISTRATION STATEMENT"; any registration statement filed pursuant to Rule
462(b) of under the Act is herein called the "462(b) REGISTRATION STATEMENT,"
and after such filing the term "REGISTRATION STATEMENT" shall include the Rule
462(b) Registration Statement; the prospectus in the form first provided to the
Underwriters by the Company in connection with the offering and sale of the
Shares (whether or not required to be filed pursuant to Rule 424(b) under the
Act ("RULE 424(b)")) is hereinafter referred to as the "PROSPECTUS," except that
if any revised prospectus shall be provided to the Underwriters by the Company
for use in connection with the offering of the Shares that differs from the
Prospectus (whether or not any such revised prospectus is required to be filed
by the Company pursuant to Rule 424(b) under the Act), the term "PROSPECTUS"
shall refer to the revised prospectus from and after the time it is first
provided to the Underwriters for such use; and each preliminary prospectus
included in the Registration Statement prior to the time it became or becomes
effective is herein referred to as a "PRELIMINARY PROSPECTUS."
3. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations
and warranties contained in this Agreement, and subject to the terms and
conditions hereof, (i) the Company and the Selling Shareholder agree, severally
and not jointly, to sell to the Underwriters, at a price of $_____ per Share
(the "PURCHASE PRICE"), the
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Company Shares and the Selling Shareholder Shares, respectively; and (ii) each
Underwriter agrees, severally and not jointly, to purchase from the Company and
the Selling Shareholder, at the Purchase Price, the aggregate number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to the terms and conditions hereof, (i) the Selling
Shareholder agrees to sell to the Underwriters, at the Purchase Price, up to
415,000 Option Shares; and (ii) the Underwriters shall have the right to
purchase, severally and not jointly, from time to time, up to an aggregate of
415,000 Option Shares at the Purchase Price. Option Shares may be purchased as
provided in Section 4 hereof solely for the purpose of covering over-allotments
made in connection with the offering of the Firm Shares. If any Option Shares
are to be purchased, each Underwriter, severally and not jointly, agrees to
purchase the number of Option Shares (subject to such adjustments to eliminate
fractional shares as the Representatives may determine) that bears the same
proportion to the total number of Option Shares to be purchased as the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I bears
to the total number of Firm Shares.
For a period of 180 days from the date this Agreement becomes effective,
the Company will not, without the prior written consent of EVEREN Securities,
Inc. on behalf of the Underwriters (1) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or (2) enter
into any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise; PROVIDED, HOWEVER,
that this clause shall not apply to the transactions expressly contemplated
hereby and the granting of options for shares of Common Stock and involving the
Shares the sales of shares of Common Stock to the Company's employees pursuant
to the exercise of options under those employee benefit plans described in the
Prospectus.
For a period of 180 days from the date this Agreement becomes effective,
the Company will not, without the prior written consent of EVEREN Securities,
Inc. on behalf of the Underwriters, file a registration statement relating to
shares of capital stock (including the Common Stock) or securities convertible
into or exercisable or exchangeable for, capital stock or warrants, options or
rights to purchase or acquire, capital stock, with the exception of the filing
of Registration Statements on Form S-8 with respect to the Company's employee
benefit plans described in the Prospectus.
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4. AGREEMENTS OF THE COMPANY AS TO DELIVERY AND PAYMENT. The Company
agrees with each Underwriter that:
(a) Delivery to the Underwriters of and payment for the Firm Shares
shall be made at 10:00 A.M., New York City time, on the third full business
day (such time and date being referred to as the "CLOSING DATE") following
the date of the initial public offering of the Firm Shares as advised to
you by the Company, at such place as you shall designate.
(b) Delivery to the Underwriters of and payment for any Option Shares
to be purchased by the Underwriters shall be made at such place as the
Representatives shall designate, at 10:00 A.M., New York City time, on such
date or dates (individually, an "OPTION CLOSING DATE" and collectively, the
"OPTION CLOSING DATES"), which may be the same as the Closing Date but
shall in no event be earlier than the Closing Date, as shall be specified
in a written notice from the Representatives to the Company of the
Underwriters' determination to purchase a number, specified in said notice,
of Option Shares. Any such notice may be given at any time within 30 days
after the date of this Agreement.
(c) Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than
two business days prior to the Closing Date or the applicable Option
Closing Date, as the case may be, and shall be made available for
inspection not later than 9:30 A.M., New York City time, on the business
day next preceding the Closing Date or the applicable Option Closing Date,
as the case may be, with any transfer taxes payable upon initial issuance
or the transfer thereof duly paid by the Company for the respective
accounts of the Underwriters against payment of the Purchase Price therefor
by certified or official bank check or checks payable in New York Clearing
House or similar next-day funds to the order of the Company.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company also agrees with each
Underwriter that:
(a) it will, if the Registration Statement has not heretofore become
effective under the Act, file an amendment to the Registration Statement
or, if necessary pursuant to Rule 430A under the Act, a post-effective
amendment to the Registration Statement, as soon as practicable after the
execution and delivery of this Agreement, and will use its best efforts to
cause the Registration Statement or such post-effective amendment to become
effective at the earliest possible time; and the Company will comply fully
and in a timely
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manner with the applicable provisions of Rule 424(b) and Rule 430A under
the Act;
(b) it will advise you promptly and, if requested by you, confirm
such advice in writing, (i) when the Registration Statement has become
effective, if and when the Prospectus is sent for filing pursuant to
Rule 424 under the Act and when any post-effective amendment to the
Registration Statement becomes effective, (ii) of the receipt of any
comments from the Commission that relate to the Registration Statement or
requests by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information,
(iii) 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 or, to the best knowledge of the Company, threat of any
proceedings for such purpose by the Commission or any state securities
commission or other regulatory authority, and (iv) of the happening of any
event or information becoming known during the period referred to in
paragraph (e) below that makes any statement of a material fact made in the
Registration Statement untrue or that requires the making of any additions
to or changes in the Registration Statement (as amended or supplemented
from time to time) in order to make the statements therein not misleading
or that makes any statement of a material fact made in the Prospectus (as
amended or supplemented from time to time) untrue or that requires the
making of any additions to or changes in the Prospectus (as amended or
supplemented from time to time) in order to make the statements therein,
not misleading; if at any time the Commission shall issue or institute
proceedings (or threaten to institute any such proceedings) to issue any
stop order suspending the effectiveness of the Registration Statement, or
any state securities commission or other regulatory authority shall issue
or institute proceedings (or threaten to institute proceedings) to issue an
order suspending the qualification or exemption of the Shares under any
state securities or Blue Sky laws, the Company shall use its best efforts
to obtain the withdrawal or lifting of such order at the earliest possible
time;
(c) it will furnish to each of the Representatives without charge one
signed copy of the Registration Statement as first filed with the
Commission and of each amendment to it, including all exhibits filed
therewith, and will furnish to you and each Underwriter designated by you
such number of conformed copies of the Registration Statement as so filed
and of each amendment to it, without exhibits, as you may reasonably
request;
(d) it will not file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, make
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any filing under Rule 462(b) of the Act or make any amendment or supplement
to the Prospectus of which you shall not previously have been advised and
provided a copy a reasonable period of time prior to the filing thereof or
to which you or your counsel shall reasonably object; and it will prepare
and file with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or supplement to the Prospectus
that may be necessary or advisable in connection with the distribution of
the Shares by you in your or your counsel's opinion, and will use its best
efforts to cause the same to become effective as promptly as possible;
(e) promptly after the Registration Statement becomes effective, and
from time to time thereafter for such period as a prospectus is required by
the Act to be delivered in connection with the sales by an underwriter or a
dealer (in the opinion of your counsel), it will furnish to each
Underwriter and dealer without charge as many copies of the Prospectus (and
any amendment or supplement of the Prospectus) as such Underwriter or
dealer may reasonably request for the purposes contemplated by the Act; the
Company consents to the use of the Prospectus and any amendment or
supplement thereto by any Underwriter or any dealer, both in connection
with the offering or sale of the Shares and for such period of time
thereafter as the Prospectus is required by the Act to be delivered in
connection therewith;
(f) if during the period specified in paragraph (e) any event shall
occur or information become known as a result of which in the opinion of
your counsel it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in light of the circumstances
existing as of the date the Prospectus is delivered to a purchaser, not
misleading, or it is necessary to amend or supplement the Prospectus to
comply with any law, forthwith to prepare and, subject to paragraph 5(d)
above, it will file with the Commission at the sole expense of the Company
an appropriate amendment or supplement to the Prospectus so that the
statements of any material facts in the Prospectus, as so amended and
supplemented, will not in light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with law
and it will furnish to the Underwriters and to such dealers as the
Underwriters shall specify, at the sole expense of the Company, such number
of copies thereof as such Underwriters or dealers may reasonably request;
(g) prior to any public offering of the Shares, it will cooperate
with you and counsel for the Underwriters in connection with the
registration or qualification of the Shares for offer and sale by the
several Underwriters and by dealers under the state securities or Blue Sky
laws of such jurisdictions as you may request (provided, that the Company
shall not be obligated to qualify as a
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foreign corporation in any jurisdiction in which it is not so qualified or
to take any action which would subject it to general consent to service of
process in any jurisdiction in which it is not now so subject); the Company
will continue such qualification in effect so long as required by law for
the distribution of the Shares and will file such consents to service of
process or other documents as may be necessary in order to effect such
registration or qualification (provided, that the Company shall not be
obligated to take any action that would subject it to general consent to
service of process in any jurisdiction in which it is not now so subject);
(h) it will not, prior to the exercise in full or termination or
expiration of the option to purchase the Option Shares, incur any liability
or obligation, direct or contingent, or enter into any material
transaction, other than in the ordinary course of business, except as
contemplated by the Prospectus;
(i) it will not acquire any capital stock of the Company prior to the
exercise in full or termination or expiration of the option to purchase the
Option Shares nor will the Company declare or pay any dividend or make any
other distribution upon the Common Stock payable to shareholders of record
on a date prior to the exercise in full or termination or expiration of the
option to purchase the Option Shares, except in either case as contemplated
by the Prospectus;
(j) it will mail and make generally available to its security holders
and furnish to the Underwriters as soon as reasonably practicable a
consolidated earnings statement covering a period of at least 12 months
beginning after the "EFFECTIVE DATE" (as defined in Rule 158 under the Act)
of the Registration Statement (but in no event commencing later than 90
days after such date) that will satisfy the provisions of Section 11(a) of
the Act and Rule 158 thereunder and to advise you in writing when such
statement has been made so available;
(k) during the period of five years after the date of this Agreement,
it will furnish to you a copy (i) as soon as practicable after the filing
thereof, of each report filed by the Company with the Commission, any
securities exchange or the National Association of Securities Dealers, Inc.
("NASD"); (ii) as soon as practicable after the release thereof, of each
material press release in respect of the Company; (iii) as soon as
available, of each report of the Company mailed to shareholders; and
(iv) as soon as available, such other publicly available information
concerning the Company as you may reasonably request;
(l) whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective as to all of its provisions
or is terminated, to pay all costs, fees, expenses and taxes incident to
the
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performance by the Company of its obligations hereunder, including (i) the
preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits), each
preliminary Prospectus and all amendments and supplements to any of them
prior to or during the period specified in paragraph (e) above of this
Section 5, (ii) the word processing, reproduction and distribution of this
Agreement, the Blue Sky Survey and any other agreements, memoranda,
correspondence and other documents prepared and delivered by the
Underwriters or their counsel in connection with the offering of the Shares
(including in each case any disbursements of counsel for the Underwriters
relating to such preparation and delivery), (iii) the registration or
qualification of the Shares for offer and sale under the securities or Blue
Sky laws of the several states, including in each case the fees and
disbursements of counsel for the Underwriters, relating to such
registration or qualification and memoranda relating thereto, (iv) filings
and clearance with the NASD in connection with the offering and sale of the
Shares, (v) the listing of the Shares on the The Nasdaq National Market
("NMS") (vi) furnishing such copies of the Registration Statement, each
Preliminary Prospectus, the Prospectus and all amendments and supplements
thereto as may be requested for use in connection with the offering or sale
of the Shares by the Underwriters or by dealers to whom the Shares may be
sold, (vii) obtaining the opinions to be provided pursuant to
Sections 8(g), 8(h) and 8(i) of this Agreement and (viii) the performance
by the Company of all of its other obligations under this Agreement;
(m) in addition to the expenses set forth in Section 5(l), the
Company shall, as applicable: (A) on the Closing Date, pay to EVEREN
Securities, Inc. and The Xxxxxxx Companies Incorporated individually and
not in their capacities as Representatives, a non-accountable expense
allowance equal to one percent (1%) of the initial public offering price of
the Shares sold pursuant to this Agreement (including any Option Shares
sold pursuant to this Agreement), or (B) (i) if the sale of the Shares
provided for herein is not consummated because the Underwriters exercise
their right to terminate this Agreement pursuant to Section 9 hereof and
any of the following have occurred during the term of this Agreement:
(x) there has been any material adverse change in the condition (financial
or otherwise), earnings, affairs, business or prospects of the Company, or
(y) the Company or the Selling Shareholder shall refuse or be unable to
comply with any provision hereof (except as the result of a breach of this
Agreement by the Underwriters), the Company will promptly reimburse the
Underwriters upon demand for all reasonable out-of-pocket expenses
(including the fees and disbursements of counsel for the Underwriters) that
shall have been incurred by the Underwriters in connection with the
proposed purchase and sale of Shares, or (ii) if the sale of the Shares
provided for herein is not consummated this Agreement is terminated for any
reason other than the reasons set forth set in clause (B) (i) of this
Section
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5(l), the Company shall pay all reasonable out-of-pocket expenses
(including the fees and disbursements of counsel for the Underwriters) that
shall have been incurred by the Underwriters in connection with the
proposed purchase and sale of Shares up to a maximum of $50,000, plus the
Representatives' actual out-of-pocket expenses of travel, food and lodging
in connection with their due dilgence trip to the United Kingdom in
November 1997.
(n) it intends to use the net proceeds received by it from the sale
of the Shares being sold by it in the manner specified in the Prospectus
and it will file such reports with the Commission with respect to the
application of the proceeds therefrom as may be required in accordance with
Rule 463 under the Act;
(o) if, at the time of effectiveness of the Registration Statement,
any information shall have been omitted therefrom in reliance upon
Rule 430A, then immediately following the execution and delivery of this
Agreement, it will prepare, and file or transmit for filing with the
Commission in accordance with such Rule 430A and Rule 424(b), copies of an
amended prospectus, or, if required by such Rule 430A, a post-effective
amendment to the Registration Statement (including an amended prospectus),
containing all information so omitted;
(p) it will cause the Shares to be listed, subject to notice of
issuance or sale, on the NMS; it will comply with all registration, filing
and reporting requirements of the Securities Exchange Act of 1934, as
amended, (the "EXCHANGE ACT") and the NMS;
(q) the Company shall obtain and deliver to you prior to the Closing
Date an agreement from each officer and director of the Company, and each
beneficial owner of Common Stock prior to the date hereof the written
agreement (the "Lock-up Agreements") that for a period of 180 days from the
date this Agreement becomes effective, will not, without the prior written
consent of EVEREN Securities, Inc. on behalf of the Underwriters (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase, or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or (2) enter into any swap or
other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise; PROVIDED, HOWEVER,
that this clause shall not apply to the transactions expressly contemplated
hereby involving the Shares or to transfers of Common Stock to
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partnerships, limited liability companies, trusts or similar entities
organized for the exclusive benefit of family members of the transferor for
financial and estate planning purposes so long as any transferee that
receives Common Stock as a result of such transfer shall agree upon such
transfer to be bound by the terms of this paragraph and shall be capable of
being so bound; and
(r) it will use its best efforts to do and perform all things
required to be done and performed under this Agreement by it prior to or
after the Closing Date or any Option Closing Date, as the case may be, and
to satisfy all conditions precedent to the delivery of the Shares.
6. Representations and Warranties.
(a) the Company and the Selling Shareholder jointly and severally
represent and warrant to each Underwriter as of the date hereof, the
Closing Date and each Option Closing Date that:
(i) the Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus relating to the
proposed offering of the Shares nor instituted or threatened any
proceedings for that purpose. The Registration Statement, on the
date it became or becomes effective, any 462(b) Registration
Statement, on the date it became or becomes effective, each
Preliminary Prospectus, on the date of the filing thereof with the
Commission, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission (or if
not filed, on the date provided by the Company to the Underwriters
in connection with the offering and sale of the Shares) and at the
Closing Date and each Option Closing Date conformed or will conform
with the requirements of the Act and the rules and regulations
promulgated thereunder ("RULES AND REGULATIONS"); the Registration
Statement, on the date it became or becomes effective, and any
462(b) Registration Statement, on the date it became or becomes
effective, did not or will not contain an untrue statement of
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
each Preliminary Prospectus, on the date of the filing thereof with
the Commission, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission (or if
not filed, on the date provided by the Company to the Underwriters
in connection with the offering and sale of the Shares) and at the
Closing Date and each Option Closing Date did not and will not
include an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
10
were made, not misleading; the foregoing shall not apply to
statements in or omissions from the Registration Statement and the
Prospectus made or omitted in reliance upon, and in conformity with,
information relating to the Underwriters furnished in writing to the
Company by or on behalf of the Underwriters with your consent
expressly for use therein; the Company and the Selling Shareholder
hereby acknowledge for all purposes under this Agreement that (A)
the statements set forth under the caption "Underwriting" in the
Prospectus and (B) the stabilization legend on the gate-fold of the
Prospectus constitute the only written information furnished to the
Company by or on behalf of the Underwriters for use in the
preparation of the Registration Statement or the Prospectus or any
amendment or supplement thereto;
(ii) the Company has been duly incorporated and is a validly
existing corporation in good standing under the laws of California,
with full corporate power and authority to own or lease its
properties and assets and to conduct its business as described in
the Registration Statement and the Prospectus and is duly qualified
to do business in each jurisdiction in which it owns or leases real
property or in which the conduct of its business or the ownership or
leasing of property requires such qualification, except where the
failure to be so qualified, either individually or in the aggregate,
would not have a material adverse effect on the condition (financial
or otherwise), business, assets, prospects, net worth or results of
operations of the Company taken as a whole (a "MATERIAL ADVERSE
EFFECT");
(iii) the Company has no subsidiaries other than Hawker
Pacific Aerospace, Ltd, a company organized and operating under the
laws of the United Kingdom for the purposes of acquiring the assets
of British Airways plc's landing gear repair and overhaul operations
(the "BA ASSETS") to be acquired by the Company immediately
following the Closing Date (the "BA ACQUISITION"); all issued and
outstanding shares of capital stock or other equity interest of each
such subsidiary of the Company have been duly authorized and validly
issued and are fully paid and nonassessable, and were not issued in
violation of or subject to any preemptive right, or other rights to
subscribe for or purchase shares or other equity interest and are
owned by the Company or a subsidiary of the Company free and clear
of any pledge, lien, security interest, encumbrance, claim or
equitable interest.
(iv) the capitalization of the Company is, and upon
consummation of the transactions contemplated hereby and by the
Prospectus will be, as set forth in the Registration Statement and
the
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Prospectus under the caption "Capitalization;" all of the
outstanding shares of capital stock of the Company (including the
shares to be sold by the Selling Shareholder hereunder) have been
duly authorized and are validly issued, are fully paid and
non-assessable and conform to the description thereof in the
Registration Statement and the Prospectus and were not issued in
violation of any preemptive rights or other rights to subscribe for
or purchase securities; and, except as set forth in the Registration
Statement and the Prospectus with respect to the Company's 1997
Stock Option Plan and the conversion of its outstanding Preferred
Stock, no options, warrants or other rights to purchase from the
Company, agreements or other obligations of the Company to issue or
other rights to convert any obligation into, or exchange any
securities for, shares of capital stock of or ownership interests in
the Company are outstanding; the description of the Company's 1997
Stock Option Plan and the other options or rights granted and
exercised thereunder, as set forth in the Registration Statement and
the Prospectus, accurately and fairly presents the information
required to be shown under the Act with respect to such options and
rights;
(v) subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus,
and except as described therein, (A) the Company has not incurred
any material liabilities or obligations, direct or contingent, or
entered into any material transactions not in the ordinary course of
business, (B) the Company has not purchased any of its outstanding
capital stock or declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock or otherwise and (C)
there has not been any material adverse change in the Company's
condition (financial or otherwise), business, affairs, prospects or
results of operations or any material change in the Company's
capital stock, short-term debt or long-term debt;
(vi) the Company Shares have been duly and validly
authorized and, when issued, delivered and paid for pursuant to this
Agreement, will be validly issued, fully paid and nonassessable, and
will conform to the description thereof contained in the Prospectus;
(vii) each of this Agreement, the Representatives' Warrant
Agreement, the [Agreement(s) under which it is to acquire the BA
Assets] (the "ACQUISITION AGREEMENT") and the [Agreement(s) under
which it is to borrow to fund the balance of the purchase price for
the BA Assets] (the ("New Credit Facility") has been duly authorized,
executed and delivered by the Company and is a legal, valid and
binding agreement of the Company enforceable in accordance with its
terms, except as
12
enforceability of the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and by general equity principles;
(viii) the Company is not in violation of its Articles of
Incorporation or by-laws; the Company is not in violation of or in
breach of or in default in (nor has any event occurred that with
notice or lapse of time, or both, would be a breach of or a default
in) the performance of any obligation, agreement or condition
contained in any agreement, lease, contract, permit, license,
franchise agreement, mortgage, loan agreement, debenture, note, deed
of trust, bond, indenture or other evidence of indebtedness or any
other instrument or obligation (collectively, "OBLIGATIONS AND
INSTRUMENTS") to which the Company is a party or by which the
Company or any of its properties or assets is bound or affected
(except for such contravention or default as would not have a
Material Adverse Effect); the Company is not in violation of or in
breach of or in default in (nor has any event occurred that with
notice or lapse of time, or both, would be a breach of or a default
in) the performance of the Acquisition Agreement or the New Credit
Facility (irrespective of whether such contravention or default
would have a Material Adverse Effect); the Company is not in
violation of any statute, judgment, decree, order, Rule or
regulation (collectively, "LAWS") applicable to the Company or any
of its properties or assets that, alone, or together with other
violations of Laws would result in a Material Adverse Effect; to the
best knowledge of the Company, no other party under any contract or
other agreement to which the Company is a party is in material
default thereunder except for such defaults as would not
individually or in the aggregate result in a Material Adverse
Effect; and to the best knowledge of the Company, no other party
under the Acquisition Agreement or the New Credit Facility is in
material default thereunder irrespective of whether such default
would individually or in the aggregate result in a Material Adverse
Effect;
(ix) the execution, delivery and performance of this
Agreement, the Representatives' Warrant Agreement, the Acquisition
Agreement and the New Credit Facility, the delivery of the Shares by
the Company and the Selling Shareholder pursuant to this Agreement
and the delivery of the Representatives' Warrants by the Company
pursuant to the Representatives' Warrant Agreement and compliance by
the Company with all the provisions hereof, of the Representatives'
Warrant Agreement, the Acquisition Agreement and the New Credit
Facility and the consummation of the transactions contemplated
hereby and thereby will not, alone or upon notice or the passage of
time or both (A) to the
13
best knowledge of the Company and the Selling Shareholder, after due
inquiry, require any consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other
governmental body or third party (except in the case of the Shares
and Representatives' Warrants, such as may be required under the Act
and the securities or Blue Sky laws of the various states or by the
NASD), (B) result in the creation or imposition of any lien, charge
or encumbrance upon any of the properties or assets of the Company
pursuant to the terms and provisions of any Obligation or
Instrument, (C) conflict with or constitute a breach or default
under any Obligation or Instrument to which the Company is a party
or by which the Company or any of its properties or assets is bound,
(except for such creation, conflict, breach or default as would not
have a Material Adverse Effect or would not interfere with the
consummation of the transactions contemplated by the Acquisition
Agreement), or (D) assuming compliance with the Act and all
applicable state securities or Blue Sky laws, violate or conflict
with any Laws applicable to the Company or any of its subsidiaries
or any of their respective properties or assets (except for such
violation or conflict as could not have a Material Adverse Effect or
would not interfere with the consummation of the transactions
contemplated by the Acquisition Agreement); no action, suit or
proceeding before any court or arbitrator or any governmental body,
agency or official (domestic or foreign) is pending against or, to
the knowledge of the Company, threatened against the Company, that,
if adversely determined, could reasonably be expected to in any
manner invalidate this Agreement, the Representatives' Warrant
Agreement, the Acquisition Agreement or the New Credit Facility;
(x) except as set forth in the Prospectus, there is no
action, suit, proceeding, inquiry or investigation, governmental or
otherwise before any court, arbitrator or governmental agency or
body (collectively, "PROCEEDINGS") pending to which the Company or
any of its subsidiaries is a party or to which any of their
respective properties or assets are subject, that, if determined
adversely to the Company or any of its subsidiaries, as the case may
be, might result in a Material Adverse Effect, or that might
materially and adversely affect the properties or assets thereof, or
that seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of any of the Shares to be
sold hereunder or the consummation of the transactions contemplated
hereunder, under the Representatives' Warrant Agreement, the
Acquisition Agreement or the New Credit Facility, and, to the best
knowledge of the Company after due inquiry, no such Proceedings are
threatened or contemplated; and (except for such contracts, documents
14
or agreements for which confidential treatment has been granted by
Commission in accordance with Rule 406 of the Rules and Regulations)
there is no contract, document, agreement or transaction to which
the Company or any of its subsidiaries is a party, or that involved
or involves the Company, any of its subsidiaries or any of their
properties or assets that are required to be described in or filed
as exhibits to the Registration Statement or the Prospectus by the
Act or the Rules and Regulations that have not been so described or
filed; no action has been taken with respect to the Company, and, to
the best knowledge of the Company and the Selling Shareholder, no
statute, Rule or regulation or order has been enacted, adopted or
issued by any governmental agency that suspends the effectiveness of
the Registration Statement, prevents or suspends the use of any
Preliminary Prospectus or the Prospectus, suspends the sale of the
Shares in any jurisdiction or prevents the consummation of the
transactions contemplated by the Acquisition Agreement or the New
Credit Facility; no injunction, restraining order or order of any
nature by a federal or state court of competent jurisdiction has
been issued with respect to the Company that might prevent the
issuance of the Shares, suspend the effectiveness of the
Registration Statement, prevent or suspend the use of any
Preliminary Prospectus or the Prospectus, suspend the sale of the
Shares in any jurisdiction, or prevent the consummation of the
transactions contemplated by the Acquisition Agreement or the New
Credit Facility; and every request of the Commission, or any
securities authority or agency of any jurisdiction, for additional
information (to be included in the Registration Statement or the
Prospectus or otherwise) has been complied with in all material
respects;
(xi) except for such matters against which the Company has
received full indemnification as described in the Registration
Statement and Prospectus, the Company has not violated any foreign,
federal, state or local law or regulation relating to the protection
of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), nor any foreign, Federal, state or local law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable foreign, Federal or state wages and hours laws, nor any
provisions of the Employee Retirement Income Security Act of 1974,
as amended or the rules and regulations promulgated thereunder or
similar foreign laws, that, in each case or in the aggregate, might
result in a Material Adverse Effect; except for such matters against
which the Company has received full indemnification as described in
the Registration Statement and Prospectus, none of the property
leased by the Company is contaminated with any waste or hazardous
substances, and, to the extent that the
15
Company disposes in the ordinary course of its business products
that may be classified as or contain "hazardous substances," the
disposal of such products (A) is in material compliance with all
applicable laws as of the date hereof and (B) has not and will not
result in a Material Adverse Effect;
(xii) the Company has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities or third
parties ("PERMITS"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease and
operate its properties and assets and to conduct its businesses and
to own, lease and operate the BA Assets and the business it
contemplates conducting upon consummation of the BA Acquisition,
except where the failure to have any such Permit would not have a
Material Adverse Effect; the Company has fulfilled and performed all
of its material conditions or obligations with respect to such
Permits and no event has occurred that allows, or after notice or
lapse of time, or both would allow, revocation or termination
thereof or result in any other material impairment of the rights of
the holder of any such Permit; and except as described in the
Prospectus, such Permits contain no restrictions that are materially
burdensome to the Company;
(xiii) the Company is not, and does not intend to conduct its
business in a manner in which it would become, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT");
(xiv) except as otherwise set forth in the Prospectus, the
Company has good and marketable title, free and clear of all liens,
claims, encumbrances and restrictions (except liens for taxes not
yet due and payable) to all property and assets described in the
Registration Statement as being owned by it; all leases to which the
Company is a party are subsisting, valid and binding and no default
of the Company or, as applicable, any of the Selling Shareholder or
their respective affiliates or, to the best knowledge of the Company
and the Selling Shareholder, any other person has occurred or is
continuing thereunder that might result in a Material Adverse
Effect; and the Company enjoys peaceful and undisturbed possession
under all such leases to which the Company is a party as lessee with
such exceptions as do not materially interfere with the use made
thereof by the Company;
16
(xv) the Company maintains reasonably adequate insurance
for the conduct of its business in accordance with prudent business
practices with reputable third-party insurers;
(xvi) Ernst & Young LLP, the accounting firm that has
certified or reviewed, or shall certify or review, the financial
statements and supporting schedules filed or to be filed with the
Commission as part of the Registration Statement and the Prospectus,
is an independent public accounting firm with respect to the Company
as required by the Act;
(xvii) the consolidated financial statements of the Company,
together with related notes and schedules of the Company included in
the Registration Statement and the Prospectus, are accurate and
present fairly the financial position, results of operations and
cash flows of the Company at the indicated dates and for the
indicated periods; such financial statements of have been prepared
in accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout the periods involved, and all
adjustments necessary for a fair presentation of results for such
periods have been made and any unaudited financial statements have
been prepared on a basis substantially consistent with that of the
audited operating financial statements included in the Registration
Statement and the Prospectus; and the summary and selected financial
and operating data included in the Registration Statement and the
Prospectus presents fairly the information shown therein and have
been compiled on a basis consistent with the audited and any
unaudited financial statements, as the case may be, included
therein; and the pro forma information included in the Prospectus
present fairly the information shown therein, have been prepared in
accordance with GAAP and the Commission's rules and guidelines with
respect to pro forma financial statements and other pro forma
information, have been properly compiled on the pro forma basis
described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are
appropriate under the circumstances;
(xviii) no holder of any security of the Company has any
right to require inclusion of any such security in the Registration
Statement. There are no preemptive rights with respect to the
offering being made by the Prospectus;
17
(xix) except as disclosed in the Registration Statement and
the Prospectus, no labor dispute with the employees of the Company
exists, or to the best knowledge of the Company after due inquiry,
is imminent, that could result in a Material Adverse Effect; and the
Company has not received notice of any existing or imminent labor
disturbance by the employees of any of its principle suppliers,
customers, manufacturers or contractors that could result in any
Material Adverse Effect;
(xx) the Company has filed or caused to be filed, or has
properly filed extensions for, all foreign, federal, state and local
income, value added and franchise tax returns and has paid all taxes
and assessments shown thereon as due, except for such taxes and
assessments as are disclosed or adequately reserved against and that
are being contested in good faith by appropriate proceedings,
promptly instituted and diligently conducted;
(xxi) the Company owns or possesses, or can acquire on
reasonable terms, the patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names
(collectively, "PATENTS AND PROPRIETARY RIGHTS") currently employed
by it in connection with the business it now operates except where
the failure to so own, possess or acquire such Patents and
Proprietary Rights would not have a Material Adverse Effect; and the
Company has not received any notice and is not otherwise aware of
any infringement of or conflict with asserted rights of others with
respect to any Patent or Proprietary Rights that, if the subject of
any unfavorable decision, ruling or finding, singly or in the
aggregate, could result in a Material Adverse Effect;
(xxii) the Company is conducting and intends to conduct its
business so as to comply in all material respects with applicable
federal, state, local and foreign government Laws, except where the
failure to comply would not have a Material Adverse Effect; and
except as set forth in the Registration Statement and the
Prospectus, the Company is not charged with or, to the Company's
knowledge after due inquiry, under investigation with respect to,
any material violation of any such Laws;
(xxiii) the Company has not taken and will not take, directly
or indirectly, any action designed to or which has constituted or
that might reasonably be expected to cause or result, under the
Exchange Act or
18
otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares;
(xxiv) neither the Company nor, to the best knowledge of the
Company and the Selling Shareholder, any employee or agent of the
Company has made any payment of funds of the Company or received or
retained any funds in violation of any law, Rule or regulation
(including, without limitation, the Foreign Corrupt Practices Act)
or of a character required to be disclosed in the Prospectus; the
Company has not, at any time during the past five years, (1) made
any unlawful contributions to any candidate for any political
office, or failed fully to disclose any contribution in violation of
law, or (2) made any unlawful payment to state, federal or foreign
government officer or officers, or other person charged with similar
public or quasi-public duty;
(xxv) the Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for inventory is
compared with the existing inventory at reasonable intervals and
appropriate action is taken with respect to any differences;
(xxvi) the Representative's Warrants have been duly and
validly authorized by the Company and upon delivery to you in
accordance with the Representative's Warrant Agreement will be duly
issued and legal, valid and binding obligations of the Company.
(xxvii) the Representative's Warrant Stock have been duly
authorized and reserved for issuance upon the exercise of the
Representative's Warrants and when issued upon payment of the
exercise price therefor will be validly issued, fully paid and
nonassessable shares of Common Stock of the Company.
(xxviii) the Company confirms as of the date hereof that it
is in compliance with all provisions of Section 1 of Florida
Statutes, Section 517.075, AN ACT RELATING TO DISCLOSURE OF DOING
BUSINESS WITH CUBA; the Company further agrees that if it commences
engaging in business with the government of Cuba or with any person
or affiliate located in Cuba after the date the Registration
Statement becomes or has
19
become effective with the Commission or with the Florida Department
of Banking and Finance (the "DEPARTMENT"), whichever date is later,
or if the information reported in the Prospectus, if any, concerning
the Company's business with Cuba or with any person or affiliate
located in Cuba changes in any material way, the Company will
provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
(b) In addition, the Selling Shareholder represents and warrants to
and agrees with each Underwriter and the Company that:
(i) such Selling Shareholder now has and on the Closing Date
and on any date on which Option Shares are purchased, will have
valid marketable title to the Selling Shareholder Shares and the
Option Shares, as the case may be, free and clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest
other than pursuant to this Agreement; and upon delivery of such
Shares hereunder and payment of the purchase price as herein
contemplated, each of the Underwriters will obtain valid marketable
title to the Shares purchased by it from such Selling Shareholder,
free and clear of any pledge, lien, security interest pertaining to
such Selling Shareholder or such Selling Shareholder's property,
encumbrance, claim or equitable interest, including any liability
for estate or inheritance taxes, or any liability to or claims of
any creditor, devisee, legatee or beneficiary of such Selling
Shareholder;
(ii) such Selling Shareholder has duly executed and
delivered, in the form heretofore furnished to the Representatives,
an irrevocable Power of Attorney (the "Power of Attorney")
appointing ___________ and ___________ as attorneys-in-fact
(collectively, the "Attorneys" and individually, an "Attorney") and
a Letter of Transmittal and Custody Agreement (the "Custody
Agreement") with U.S. Stock Transfer Corporation as custodian (the
"Custodian"); the Power of Attorney and the Custody Agreement
constitutes a valid and binding agreement on the part of such
Selling Shareholder, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by
general equitable principles; and each of such Selling Shareholder's
Attorneys, acting alone, is authorized to execute and deliver this
Agreement and the certificate referred to in Section 8(l) hereof on
behalf of such Selling Shareholder, to determine the purchase price
to be paid by the several Underwriters to such Selling Shareholder
as provided in Section __ hereof, to authorize the delivery of the
Option Shares to be sold by such
20
Selling Shareholder] under this Agreement and to duly endorse (in
blank or otherwise) the certificate or certificates representing
such Shares or a stock power or powers with respect thereto, to
accept payment therefor, and otherwise to act on behalf of such
Selling Shareholder in connection with this Agreement;
(iii) all consents, approvals, authorizations and orders
required for the execution and delivery by the Selling Shareholder
of the Power of Attorney and the Custody Agreement, the execution
and delivery by or on behalf of such Selling Shareholder of this
Agreement and the sale and delivery of the Selling Shareholder
Shares and the Option Shares to be sold by such Selling Shareholder
under this Agreement (other than, at the time of the execution
hereof (if the Registration Statement has not yet been declared
effective by the Commission), the issuance of the order of the
Commission declaring the Registration Statement effective and such
consents, approvals, authorizations or orders as may be necessary
under state or other securities or Blue Sky laws) have been obtained
and are in full force and effect; and such Selling Shareholder has
full legal right, power and authority to enter into and perform its
obligations under this Agreement and such Power of Attorney and
Custody Agreement, and to sell, assign, transfer and deliver the
Shares to be sold by such Selling Shareholder under this Agreement;
(iv) for a period of 180 days from the date this Agreement
becomes effective, the Selling Shareholder will not, without the
prior written consent of EVEREN Securities, Inc. on behalf of the
Underwriters (1) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or (2) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or
otherwise; PROVIDED, HOWEVER, that this clause shall not apply to
the transactions expressly contemplated hereby involving the Shares
or to transfers of Common Stock to partnerships, limited liability
companies, trusts or similar entities organized for the exclusive
benefit of family members of Selling Shareholder for financial and
estate planning purposes so long as any transferee that receives
Common Stock as a result of such transfer shall agree upon such
transfer to be bound by the terms of this paragraph and shall be
capable of being so bound;
21
(v) the performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a breach or
violation of any of the terms and provisions of or constitute a
default under any bond, debenture, note or other evidence of
indebtedness, or under any lease, contract, indenture, mortgage,
deed of trust, loan agreement, joint venture or other agreement or
instrument to which such Selling Shareholder is a party or by which
such Selling Shareholder, or any Option Shares to be sold by such
Selling Shareholder hereunder, may be bound or, to the best of such
Selling Shareholder's knowledge, result in any violation of any law,
order, rule, regulation, writ, injunction, judgment or decree of any
court, government or governmental agency or body, domestic or
foreign, having jurisdiction over such Selling Shareholder or over
the properties of such Selling Shareholder;
(vi) such Selling Shareholder has not taken and will not
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;
(vii) such Selling Shareholder has not distributed and will
not distribute any prospectus or other offering material in
connection with the offering and sale of the Shares;
(viii) all information furnished by or on behalf of such
Selling Shareholder relating to such Selling Shareholder, the
Selling Shareholder Shares and the Option Shares that is contained
in the representations and warranties of such Selling Shareholder in
such Selling Shareholder's Power of Attorney or set forth in the
Registration Statement and the Prospectus is, and at the time the
Registration Statement became or becomes, as the case may be,
effective and at all times subsequent thereto up to and on the
Closing Date, and on any later date on which Option Shares are to be
purchased, was or will be, true, correct and complete, and does not,
and at the time the Registration Statement became or becomes, as the
case may be, effective and at all times subsequent thereto up to and
on the Closing Date and on any later date on which Option Shares are
to be purchased, will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make such information not misleading;
(ix) such Selling Shareholder will review the Prospectus
and will comply with all agreements and satisfy all conditions on
its part to be complied with or satisfied pursuant to this Agreement
on or prior to the
22
Closing Date and on any later date on which Option Shares are to be
purchased, as the case may be, and will advise one of its Attorneys
and EVEREN Securities, Inc. prior to the Closing Date and on any
later date on which any Option Shares are to be purchased, if any
statement to be made on behalf of such Selling Shareholder in the
certificate contemplated by Section 8(l) would be inaccurate if
made as of the date on which Option Shares are to be purchased;
(x) such Selling Shareholder does not have, or has waived
prior to the date hereof, any preemptive right, co-sale right or
right of first refusal or other similar right to purchase any of the
Company Shares; such Selling Shareholder does not have, or has
waived prior to the date hereof, any registration right or other
similar right to participate in the offering made by the Prospectus,
other than such rights of participation as have been satisfied by
the participation of such Selling Shareholder in the transactions to
which this Agreement relates in accordance with the terms of this
Agreement; and such Selling Shareholder does not own any warrants,
options or similar rights to acquire, and does not have any right or
arrangement to acquire, any capital stock, rights, warrants, options
or other securities from the Company, other than those described in
the Registration Statement and the Prospectus.
(c) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty jointly and severally made by the Company and
the Selling Shareholder to each Underwriter as to the matters covered
thereby and shall be deemed incorporated herein in its entirety and shall
be effective as if such representation and warranty were made herein; and
any certificate signed by the Selling Shareholder as such and delivered
to you or to counsel for the Underwriters shall also be deemed a
representation and warranty jointly and severally made by the Company and
the Selling Shareholder to each Underwriter as to the matters covered
thereby and shall also be deemed incorporated herein in its entirety and
shall be effective as if such representation and warranty were made
herein.
7. INDEMNIFICATION.
(a) The Company and the Selling Shareholder, jointly and
severally, agree to indemnify and hold harmless each of the Underwriters
and each person, if any, who controls each of the Underwriters within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act (the
"indemnified parties") from and against any and all losses, claims,
damages, liabilities and judgments caused by, arising out of, related to
or based upon any untrue statement or
23
alleged untrue statement of a material fact contained in the Registration
Statement (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), including the information deemed
to be part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A, if applicable, or the Prospectus or any
Preliminary Prospectus or caused by 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; PROVIDED, HOWEVER, that
neither the Company nor the Selling Shareholder shall be liable in any
such case to the extent that such losses, claims, damages, liabilities or
judgments are caused by an untrue statement or omission made or omitted
in reliance upon, and in conformity with, information relating to the
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters with your consent expressly for use therein. In addition to
their other obligations under this Section 7(a), the Company and Selling
Shareholder agree that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of
or based upon any statement or omission, or any alleged statement or
omission, described in this Section 7(a), or any inaccuracy in the
representations and warranties of the Company or the Selling Shareholder
herein or the failure to perform its obligations hereunder, the Company
and the Selling Shareholder will pay each Underwriter on a monthly basis
for all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the Company's and
Selling Shareholder's obligation to indemnify hereunder or to pay each
Underwriter for such expenses and the possibility that such payments
might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim payment is so held to
have been improper, the Underwriters shall promptly return such payment
to the Company together with interest, compounded daily, determined on
the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) listed from time to time in The
Wall Street Journal which represents the base rate on corporate loans
posted by a substantial majority of the nation's thirty (30) largest
banks (the "Prime Rate"). Any such interim reimbursement payments which
are not made to the Underwriters within thirty (30) days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request.
(b) In case any action shall be brought against any of the
indemnified parties, based upon any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment or supplement
thereto and with respect to which indemnity may be sought against the
Company and the Selling Shareholder, such indemnified parties shall
promptly notify the Company (and
24
the Selling Shareholder, care of the Company) in writing (but the failure
so to notify shall not relieve the Company or the Selling Shareholder of
any liability that they may otherwise have to such indemnified parties
under this Section 7 (although the Company's and the Selling Shareholder'
liability to an indemnified party may be reduced on a monetary basis to
the extent, but only to the extent, they have been prejudiced by such
failure on the part of such indemnified party) and the Company and the
Selling Shareholder shall promptly assume the defense thereof, including
the employment of counsel satisfactory to such indemnified party and
payment of all fees and expenses. The indemnified parties shall each
have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such indemnified parties unless (i)
the employment of such counsel shall have been specifically authorized by
the Company, (ii) the Company and the Selling Shareholder shall have
failed to assume promptly the defense or to employ counsel reasonably
satisfactory to such indemnified party or (iii) the named parties to any
such action (including any impleaded parties) include both the
indemnified parties and the Company or the Selling Shareholder, and an
indemnified party shall have been advised by counsel that there may be
one or more legal defenses available to one or more of the indemnified
parties that are different from or additional to those available to the
Company or the Selling Shareholder (in which case the Company and the
Selling Shareholder shall not have the right to assume the defense of
such action on behalf of such indemnified party, it being understood,
however, that the Company and the Selling Shareholder shall not, in
connection with any one such action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses
of more than one separate firm of attorneys (in addition to any local
counsel) for the indemnified parties, which firm shall be designated in
writing by EVEREN Securities, Inc., and that all such fees and expenses
shall be reimbursed promptly as they are incurred). The Company and the
Selling Shareholder shall not be liable for any settlement of any such
action effected without their written consent, which consent shall not be
unreasonably withheld, but if settled with the written consent of the
Company and the Selling Shareholder, the Company and the Selling
Shareholder agree to indemnify and hold harmless the indemnified parties
from and against any and all loss or liability by reason of such
settlement. 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 sentence 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 10
business days after delivery by registered or certified mail to the
proper address for notice to such indemnifying party of the aforesaid
request (whether or not
25
such delivery is accepted) 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 and complete release in writing of
such indemnified party from any and all liability on claims that are the
subject matter of such proceeding, which such settlement shall be in form
and substance satisfactory to the indemnified party. The indemnification
provided in this Section 7 will be in addition to any liability which the
Company and the Selling Shareholder may otherwise have.
(c) The Underwriters agree, severally and not jointly, to
indemnify and hold harmless the Selling Shareholder, the Company, its
directors, its officers who sign the Registration Statement and any
person controlling the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Selling Shareholder to the
Underwriters but only with reference to information stated in or omitted
from the Registration Statement, the Prospectus or any Preliminary
Prospectus in reliance upon, and in conformity with, information relating
to the Underwriters furnished in writing to the Company by or on behalf
of the Underwriters with your consent expressly for use therein. In case
any action shall be brought against the Company, the Selling Shareholder,
any of the Company's directors, any such officers or any person
controlling the Company based on the Registration Statement, the
Prospectus or any Preliminary Prospectus and in respect of which
indemnity may be sought against the Underwriters, the Underwriters shall
have the rights and duties given to the Company and the Selling
Shareholder by Section 7(b) hereof (except that if the Company and the
Selling Shareholder 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 the expense of such Underwriter),
and the Selling Shareholder, the Company, its directors, any such
officers and any person controlling the Company shall have the rights and
duties given to the "indemnified parties" by Section 7(b) hereof. In
addition to their other obligations under this Section 7(c), the
Underwriters severally and not jointly agree that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding described in Section 8(c) hereof, they will reimburse the
Company and the Selling Shareholder on a monthly basis for all reasonable
legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial determination as to
the propriety and
26
enforceability of the Underwriters' obligation to reimburse the Company
and the Selling Shareholder for such expenses and the possibility that
such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, the Company and the Selling
Shareholder shall promptly return such payment to the Underwriters
together with interest, compounded daily, determined on the basis of the
Prime Rate. Any such interim reimbursement payments which are not made
to the Company within thirty (30) days of a request for reimbursement
shall bear interest at the Prime Rate from the date of such request.
(d) If the indemnification provided for in this Section 7 is for
any reason unavailable to an indemnified party or insufficient to hold
such indemnified party harmless in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each
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 and judgments (i) in
such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Shareholder on the one hand and
the Underwriters on the other from the offering of the Securities or (ii)
if the allocation provided in 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 Shareholder on the one hand
and the Underwriters on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such
losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Selling Shareholder on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total
net proceeds from the offering and sale of the Shares (before deducting
expenses) received by the Company and the Selling Shareholder on the one
hand, and the total underwriting discounts and commissions received by
the Underwriters on the other, bears to the total price to the public of
the Shares, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault of the Company, the Selling
Shareholder and the Underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or the alleged omission to state a material
fact relates to information supplied by the Company, the Selling
Shareholder or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
27
The Company, the Selling Shareholder and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this
Section 7(d) were determined by PRO RATA allocation (even if the
Underwriters, the Company or the Selling Shareholder were treated as one
entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities or judgments referred
to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise paid or been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission, and the
Selling Shareholder shall not be required to contribute, more in the
aggregate than the Maximum Amount (net of all amounts reimbursed, for any
reason, by the Company or insurance policies paid for or held by the
Company). 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' obligation in this Section 7(d) to contribute are several in
proportion to the respective amount of Shares purchased hereunder by each
Underwriter and not joint.
(e) It is agreed that any controversy arising out of the
operation of the interim payment arrangements set forth in Sections 7(a)
and 7(c) hereof, including the amounts of any requested payments and method
of determining such amounts, shall be settled by arbitration conducted
under the provisions of the Constitution and Rules of the Board of
Governors of the New York Stock Exchange, Inc. or pursuant to the Code of
Arbitration Procedure of the National Association of Securities Dealers,
Inc. Any such arbitration shall be commenced by service of a written demand
for arbitration or written notice of intention to arbitrate, therein
electing the arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration tribunal in
such demand or notice, then the party responding to said demand or notice
is authorized to do so. Such an arbitration shall be limited to the
operation of the interim payment provisions contained in Sections 7(a) and
7(c) hereof and shall not resolve the ultimate propriety or enforceability
of the obligation to indemnify or pay expenses which is created by the
provisions of such Sections 7(a) and 7(c) hereof.
(f) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during
the
28
negotiations regarding the provisions hereof including, without limitation,
the provisions of this Section 7, and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 7
fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement and Prospectus as required
by the Act and the Exchange Act. The parties are advised that federal or
state public policy, as interpreted by the courts in certain jurisdictions,
may be contrary to certain of the provisions of this Section 7, and the
parties hereto hereby expressly waive and relinquish any right or ability
to assert such public policy as a defense to a claim under this Section 7
and further agree not to attempt to assert any such defense.
8. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the several Underwriters to purchase and pay for the Firm Shares on the Closing
Date and the Option Shares on any Option Closing Date are subject to the
fulfillment of each of the following conditions on or prior to the Closing Date
and each Option Closing Date:
(a) All the representations and warranties of the Company and the
Selling Shareholder contained in this Agreement and in any certificate
delivered hereunder shall be true and correct on the Closing Date and each
Option Closing Date with the same force and effect as if made on and as of
the Closing Date or Option Closing Date, as applicable. The Company and
the Selling Shareholder shall not have failed at or prior to the Closing
Date or Option Closing Date, as applicable, to perform or comply in all
respects with any of the agreements herein contained and required to be
performed or complied with by the Company at or prior to the Closing Date.
(b) If the Registration Statement is not effective at the time of the
execution and delivery of this Agreement, the Registration Statement shall
have become effective (or, if a post-effective amendment is required to be
filed pursuant to Rule 430A under the Act, such post-effective amendment
shall have become effective) not later than 9:30 A.M., New York City time,
on the date of this Agreement or such later time as you may approve in
writing or, if the Registration Statement has been declared effective prior
to the execution and delivery hereof in reliance on Rule 430A, the
Prospectus shall have been filed as required hereby, if necessary; and at
the Closing Date and each applicable Option Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been commenced or
shall be pending before or, to the best knowledge of the Underwriters, the
Company or the Selling Shareholder, threatened by the Commission; every
request for additional information on the part of the Commission shall have
been complied with to the Underwriters' satisfaction; no stop order
suspending the sale of the Shares in any jurisdiction
29
referred to in Section 5(g) shall have been issued and no proceeding for
that purpose shall have been commenced or shall be pending or threatened.
(c) The Shares shall have been qualified for sale under the Blue Sky
laws of such states as shall have been specified by the Representatives.
(d) The legality and sufficiency of the authorization, issuance and
sale or transfer and sale of the Shares hereunder, the validity and form of
the certificates representing the Shares, the execution and delivery of
this Agreement and all corporate proceedings and other legal matters
incident thereto, and the form of the Registration Statement and the
Prospectus (except financial statements) shall have been approved by
counsel for the Underwriters exercising reasonable judgment, and no
Underwriter shall have advised the Company that the Registration Statement
or the Prospectus, or any amendment or supplement thereto, contains an
untrue statement of material fact, or omits to state a fact that in your
opinion is material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any material change, or any material development
involving a prospective change, in or affecting particularly the business
or properties of the Company, whether or not arising in the ordinary course
of business, that, in the judgment of the Representatives, makes it
impractical or inadvisable to proceed with the public offering or purchase
of the Shares as contemplated hereby.
(f) You shall have received the Lock-up Agreements specified in
Section 5(p) of this Agreement.
(g) You shall have received an opinion (satisfactory to you and your
counsel) dated the Closing Date or the Option Closing Date, as the case may
be, of Xxxx & Xxxxx Professional Corporation, counsel for the Company and
the Selling Shareholder, substantially to the effect set forth on Exhibit
A hereto and incorporated herein by this reference.
30
(h) You shall have received an opinion (satisfactory to you and
your counsel) dated the Closing Date of Xxxx & Xxxxx Professional
Corporation counsel for the Company substantially to the effect set forth
on Exhibit B hereto and incorporated herein by this reference.
(i) You shall have received on the Closing Date an opinion of
Xxxxx Xxxxx & Xxxxxxx, counsel to the Company and XXXXX dated the Closing
Date, substantially to the effect set forth on Exhibit C hereto and
incorporated herein by this reference.
(j) You shall have received on the Closing Date and on any later
date on which Option Shares are to be purchased, as the case may be, a
letter from Xxxxx & Young LLP addressed to the Company and the
Underwriters, dated the Closing Date or such later date on which Option
Shares are to be purchased, as the case may be, confirming that they are
independent certified public accountants with respect to the Company within
the meaning of the Act and the applicable published Rules and Regulations
and based upon the procedures described in such letter delivered to you
concurrently with the execution of this Agreement (herein called the
"Original Letter"), but carried out to a date not more than five (5)
business days prior to the Closing Date or such later date on which Option
Shares are to be purchased, as the case may be, (i) confirming, to the
extent true, that the statements and conclusions set forth in the Original
Letter are accurate as of the Closing Date or such later date on which
Option Shares are to be purchased, as the case may be, and (ii) setting
forth any revisions and additions to the statements and conclusions set
forth in the Original Letter which are necessary to reflect any changes in
the facts described in the Original Letter since the date of such letter,
or to reflect the availability of more recent financial statements, data or
information. The letter shall not disclose any change in the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company and its subsidiaries considered as one enterprise
from that set forth in the Registration Statement or Prospectus, which, in
your sole judgment, is material and adverse and that makes it, in your sole
judgment, impracticable or inadvisable to proceed with the public offering
of the Shares as contemplated by the Prospectus. The Original Letter from
Xxxxx & Young LLP shall be addressed to or for the use of the Underwriters
in form and substance satisfactory to the Underwriters and shall
(i) represent, to the extent true, that they are independent certified
public accountants with respect to the Company within the meaning of the
Act and the applicable published Rules and Regulations, (ii) set forth
their opinion with respect to their examination of the balance sheets of
the Company as of December 31, 1995 and 1996 and September 30, 1997, and
related statements of operations, shareholders' equity, and cash flows for
the year ended December 31, 1995, the ten months ended October 31, 1996,
the two months ended December 31, 1996 and the nine months ended September
30, 1997, (iii) state that Xxxxx & Young LLP has performed the procedure
set out in Statement on Auditing Standards No. 71 ("SAS 71") for a review
of financial information at December 31, 1993 and 1994, and (iv) address
other matters agreed upon by Xxxxx & Young LLP and you. In addition, you
shall have
31
received from [Ernst & Young LLP a letter addressed to the Company and made
available to you for the use of the Underwriters stating that their review
of the Company's system of internal accounting controls, to the extent they
deemed necessary in establishing the scope of their examination of the
Company's consolidated financial statements as of September 30, 1997 did
not disclose any weaknesses in internal controls that they considered to be
material weaknesses.
(k) You shall have received from the Company a certificate, signed
by Xxxxx Xxxxxx and Xxxxx Xxxx, in their capacities as Chief Executive
Officer and Chief Financial Officer of the Company, respectively, addressed
to the Underwriters and dated the Closing Date or Option Closing Date, as
applicable to the effect that:
(i) such officer does not know of any Proceedings
instituted, threatened or contemplated against the Company of a
character required to be disclosed in the Prospectus that are not so
disclosed; such officer does not know of any material contract
required to be filed as an exhibit to the Registration Statement which
is not so filed;
(ii) such officer has carefully examined the Registration
Statement and the Prospectus and all amendments or supplements thereto
and, in such officer's opinion, such Registration Statement or such
amendment as of its effective date and as of the Closing Date, and the
Prospectus or such supplement as of its date and as of the Closing
Date, did not contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading and, in such
officer's opinion, since the effective date of the Registration
Statement, no event has occurred or information become known that
should have been set forth in an amendment to the Registration
Statement or a supplement to the Prospectus which has not been so set
forth in such amendment or supplement;
(iii) the representations and warranties of the Company set
forth in Section 6(a) of this Agreement are true and correct as of the
date of this Agreement and as of the Closing Date or the Option
Closing Date, as the case may be, and the Company has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date; and
(iv) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary prospectus
filed
32
as a part of the Registration Statement or any amendment thereto; no
stop order suspending the effectiveness of the Registration Statement
has been issued; and, to the best knowledge of the respective signers,
no proceedings for that purpose have been instituted or are pending or
contemplated under the Act; and
(v) each of the Company and HPAUK has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to respective closing dates of the
Loan Documents and the Transaction Documents (except in the case of
the Transaction Documents of the payment of the purchase price for the
BA Assets to British Airways);
(vi) no facts have come to such officer's attention that lead such
officer to believe that the payment of the purchase price for the BA
Assets and consummation of the transactions contemplated by the
Transaction Documents may not occur immediately following the Closing
Date.
The delivery of the certificate provided for in this subparagraph shall be
and constitute a representation and warranty of the Company as to the facts
required in the immediately foregoing clauses (iii) and (iv) of this
subparagraph to be set forth in said certificate.
(l) You shall be satisfied that, and you shall have received a
certificate, dated the Closing Date, or any later date on which Option
Shares are to be purchased, as the case may be, from the Selling
Shareholder or the Attorneys-in Fact for the Selling Shareholder to the
effect that, as of the Closing Date, or any later date on which Option
Shares are to be purchased, as the case may be, they have not been informed
that:
(i) The representations and warranties made by
such Selling Shareholder herein are not true or correct in any
material respect on the Closing Date or on any later date on
which Option Shares are to be purchased, as the case may be; or
(ii) The Selling Shareholder has not complied with
any obligation or satisfied any condition which is required to
be performed or satisfied on the part of such Selling
Shareholder at or prior to the Closing Date or any later date
on which Option Shares are to be purchased, as the case may be.
(m) You and Freshman, Marantz, Xxxxxxxx, Xxxxxx & Xxxxx, a law
corporation, counsel for the Underwriters, shall have received on or before
the
33
Closing Date or the Option Closing Date, as the case may be, such further
documents, opinions, certificates and schedules or instruments relating to
the business, corporate, legal and financial affairs of the Company as you
and they shall have reasonably requested from the Company.
9. EFFECTIVE DATE OF AGREEMENT, TERMINATION AND DEFAULTS. This
Agreement shall become effective upon, and shall not be deemed delivered
until, the later of (i) execution of this Agreement and (ii) when
notification of the effectiveness of the Registration Statement has been
released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date and
any exercise of the option to purchase Option Shares may be cancelled at any
time prior to any Option Closing Date by the Underwriters by written notice to
the Company if any of the following has occurred: (i) since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, any material adverse change or development involving a prospective
material adverse change in the condition, financial or otherwise, of the Company
or the earnings, affairs, management, or business of the Company, whether or not
arising in the ordinary course of business, that would, in the Representatives'
sole judgment, make it impracticable to market the Shares on the terms and in
the manner contemplated in the Prospectus, (ii) any outbreak or escalation of
hostilities or other national or international calamity or crisis or change in
economic conditions or in the financial markets of the United States that, in
the Representatives' judgment, is material and adverse and would, in the
Representatives' judgment, make it impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus, (iii) the suspension or
material limitation of trading in securities on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq Stock Market or limitation on prices for
securities on either such exchange or the Nasdaq Stock Market, (iv) the
enactment, publication, decree or other promulgation of any federal or state
statute, regulation, Rule or order of any court or other governmental authority
that in the Representatives' opinion materially and adversely affects, or will
materially and adversely affect, the business or operations of the Company,
(v) the declaration of a banking moratorium by either federal or New York or
California state authorities, (vi) the taking of any action by any Federal,
state or local government or agency in respect of its monetary or fiscal affairs
that in the Representatives' opinion has a material adverse effect on the
financial markets in the United States or (vii) there shall be any change in
financial markets or in political, economic or financial conditions which, in
the opinion of the Representatives, either renders it impracticable or
inadvisable to proceed with the offering and sale of the Shares on the terms set
forth in the Prospectus or materially adversely affects the market for the
Shares.
If on the Closing Date or on any Option Closing Date, as the case may be,
any of the Underwriters shall fail or refuse to purchase the Firm Shares or
Option Shares, as the case may be, which it has agreed to purchase hereunder on
such date, and the
34
aggregate number of Firm Shares or Option Shares, as the case may be, that such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
does not exceed, in the aggregate, 10% of the total number of Shares that all
Underwriters are obligated to purchase on such date, each non-defaulting
Underwriter shall be obligated, in the proportion which the number of Firm
Shares set forth opposite its name in Schedule I hereto bears to the total
number of Firm Shares or Option Shares, as the case may be, that all the
non-defaulting Underwriters have agreed to purchase, or in such other proportion
as you may specify, to purchase the Firm Shares or Option Shares, as the case
may be, that such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date. If, on the Closing Date or on the Option
Closing Date, as the case may be, any of the Underwriters shall fail or refuse
to purchase the Firm Shares or Option Shares, as the case may be, in an amount
that exceeds, in the aggregate, 10% of the total number of the Shares, and
arrangements satisfactory to you and the Company for the purchase of such Shares
are not made within 48 hours after such default, this Agreement shall terminate
without liability on the part of the non-defaulting Underwriters, the Company
and the Selling Shareholder, except as otherwise provided in this Section 9. In
any such case that does not result in termination of this Agreement, either you
or the Company may postpone the Closing Date or the Option Closing Date, as the
case may be, for not longer than seven (7) 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 a defaulting Underwriter from liability in respect
of any default of any such Underwriter under this Agreement.
The indemnity and contribution provisions and other agreements,
representations and warranties of the Company, the Selling Shareholder and the
Company's officers and directors set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive delivery
of and payment for the Shares, regardless of (i) any investigation, or statement
as to the results thereof, made by or on behalf of any of the Underwriters or by
or on behalf of the Company or the Selling Shareholder or the officers or
directors of the Company or any controlling person of the Company,
(ii) acceptance of the Shares and payment therefor hereunder or
(iii) termination of this Agreement. Notwithstanding any termination of this
Agreement, the Company shall be liable for and shall pay all expenses it has
agreed to pay pursuant to Section 5(l).
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of, and shall be binding upon, the Company, the Selling
Shareholder, the Underwriters, any indemnified person referred to herein and
their respective successors and assigns, all as and to the extent provided in
this Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The terms "SUCCESSORS AND ASSIGNS" shall not include
a purchaser of any of the Shares from any of the several Underwriters merely
because of such purchase.
35
10. EFFECTIVENESS OF REGISTRATION STATEMENT. You, the Company and the
Selling Shareholder will use your, its and their best efforts to cause the
Registration Statement to become effective, if it has not yet become effective,
and to prevent the issuance of any stop order suspending the effectiveness of
the Registration Statement and, if such stop order be issued, to obtain as soon
as possible the lifting thereof.
11. MISCELLANEOUS. All communications hereunder will be in writing and,
if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o EVEREN Securities, Inc., 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000-0000, Attention: Syndicate Department, with a copy to EVEREN
Securities, Inc., 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000, Xxx Xxxxxxx XX 00000,
Attention: Xxxxx Xxxxx, Senior Vice President; if sent to the Company will be
mailed, delivered or telegraphed and confirmed to the Company at Hawker Pacific
Aerospace, 00000 Xxxxxxx Xxx, Xxx Xxxxxx XX 00000, Attention: Xxxxx Xxxxxx,
President and Chief Executive Officer; and if sent to the Selling Shareholder
will be mailed, delivered or telegraphed care of the Company, with a copy to, or
in any case to such other address as the person to be notified may have
requested in writing.
The Representatives acknowledge that the sum of $50,000 has already been
paid by the Company to EVEREEN Securities, Inc. to be applied against the
Underwriters reasonable out-of-pocket expenses that shall have been incurred by
the Underwriters in connection with the proposed purchase and sale of Shares. In
the event of the termination of this agreement, EVEREEN Securities, Inc. agrees
to refund any of such of the $50,000 that is in excess of the amount necessary
to pay for the Underwriters' actual out-of-pocket expenses in connection with
the investigation, preparing to market and marketing the Shares, or in
contemplation of performing their obligations hereunder (including the legal
fees and expenses of their counsel), The Company shall not in any event be
liable to any of the Underwriters for loss of anticipated profits from the
transactions covered by this Agreement;
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF ILLINOIS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Selling Shareholder and the several Underwriters, including
you.
Very truly yours,
36
HAWKER PACIFIC AEROSPACE,
a California corporation
By:
-----------------------------------
Xxxxx X Xxxxxx,
President and Chief Executive Officer
Selling Shareholder:
XXXXXXX X. XXXXXXX
By:
-----------------------------------
--------------------
Attorney-in-Fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
EVEREN Securities, Inc.
The Xxxxxxx Companies Incorporated
Acting as Representatives of the
several Underwriters named in Schedule I.
By: EVEREN Securities, Inc.
By:
-----------------------------------
Xxxx Xxxxxx
37
SCHEDULE I
NUMBER
OF
UNDERWRITER SHARES
------
EVEREN Securities, Inc. . . . . . . . . . . . . . . . . . . .
The Xxxxxxx Companies Incorporated . . . . . . . . . . . . .
---------
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . 2,766,667
---------
---------
38
EXHIBIT A
Opinion of Xxxx & Xxxxx Professional Corporation
pursuant to Section 8(g)
[To be provided]
39
EXHIBIT B
Opinion of Xxxx & Xxxxx Professional Corporation
pursuant to Section 8(h)
[To be provided]
40
EXHIBIT C
Opinion of Xxxxx Xxxxx & Xxxxxxx
pursuant to Section 8(i)
[To be provided]
41
