EXHIBIT 1.1
AVIATION SALES COMPANY
$85,000,000
8 1/8% Senior Subordinated Notes Due 2008
UNDERWRITING AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC. New York, New York
BT ALEX. ▇▇▇▇▇ INCORPORATED _________, 1999
As Representatives of the several Underwriters,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Aviation Sales Company, a corporation organized under the laws
of Delaware (the "Company"), proposes to sell to the several underwriters named
in Schedule I hereto (the "Underwriters"), for whom you (the "Representatives")
are acting as representatives, $85,000,000 principal amount of its 8 1/8% Senior
Subordinated Notes Due 2008 (the "Securities"). The Securities will (i) be fully
and unconditionally guaranteed on a joint and several senior subordinated basis
by Aviation Sales Distribution Services Company, Aviation Sales Finance Company,
Aviation Sales Leasing Company, Aviation Sales Manufacturing Company,
AVS/▇▇▇▇▇-▇▇▇▇▇ Machine Company, Aerocell Structures, Inc., Apex Manufacturing,
Inc., Caribe Aviation, Inc., Aircraft Interior Design, Inc., Aviation Sales
Bearing Company, Aviation Sales SPS I, Inc., Aviation Sales Maintenance, Repair
& Overhaul Company, Whitehall Corporation, Hydroscience, Inc., Aero Hushkit
Corporation, Triad International Maintenance Corporation, Aviation Sales
Property Management Corp., and AVSRE, L.P. (each such subsidiary being a
"Subsidiary Guarantor" and all such subsidiaries being, collectively, the
"Subsidiary Guarantors"), pursuant to and to the extent set forth in the
Indenture (as herein defined) (the "Subsidiary Guarantees") and (ii) be issued
under an indenture (the "Indenture"), dated as of February 17, 1998, among the
Company, the Subsidiary Guarantors and SunTrust Bank, Central Florida, National
Association, as trustee (the "Trustee"). To the extent there are no additional
Underwriters listed on Schedule I other than you, the term Representatives as
used herein shall mean you, as Underwriters, and the terms Representatives and
Underwriters shall mean either the singular or plural as the context requires.
Any reference herein to the Registration Statement, a Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Exchange Act on or before
the Effective Date of the Registration Statement or the issue date of such
Preliminary Prospectus or the Prospectus, as the case may be; and any reference
herein to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement, or the issue date of any
Preliminary Prospectus or the Prospectus, as the case may be, deemed to be
incorporated therein by reference. Certain terms used herein are defined in
Section 17 hereof.
1. REPRESENTATIONS AND WARRANTIES. The Company and the
Subsidiary Guarantors, jointly and severally, represent and warrant to, and
agree with, each Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3
under the Act and has prepared and filed with the Commission a
registration statement (file number 333- ) on Form S-3, including a
related preliminary prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including a related preliminary prospectus,
each of which has previously been furnished to you. The Company will
next file with the Commission one of the following: either (1) prior to
the Effective Date of such registration statement, a further amendment
to such registration statement, including the form of final prospectus
or (2) after the Effective Date of such registration statement, a final
prospectus in accordance with Rules 430A and 424(b). In the case of
clause (2), the Company has included in such registration statement, as
amended at the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be
included in such registration statement and the Prospectus. As filed,
such amendment and form of final prospectus, or such final prospectus,
shall contain all Rule 430A Information, together with all other such
required information, and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made
therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined
herein), the Prospectus (and any supplements thereto) will, comply in
all material respects with the applicable requirements of the Act, the
Exchange Act and the Trust Indenture Act and the respective rules
thereunder; on the Effective Date and at the Execution Time, the
Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing Date, the
Indenture did or will comply in all material respects with the
applicable requirements of the Trust Indenture Act and the rules
thereunder; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), will not,
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and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, HOWEVER, that the Company and the Subsidiary
Guarantors make no representations or warranties as to (i) that part of
the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of the Trustee or (ii) the information contained in or omitted from the
Registration Statement, or the Prospectus (or any supplement thereto)
in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business
as described in the Prospectus, and is duly qualified to do business as
a foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the
failure so to qualify does not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries (the "Subsidiaries")
taken as a whole (a "Material Adverse Effect").
(d) The Subsidiary Guarantors are the only subsidiaries of the
Company (except for Aviation Sales Company FSC, Ltd., a Barbados
corporation which has no material operations or assets). Each
Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction in
which it is chartered or organized with full corporate power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and
is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which requires such
qualification, except where the failure so to qualify or be in good
standing does not have a Material Adverse Effect.
(e) All the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Subsidiaries
are owned by the Company either directly or through wholly owned
Subsidiaries free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances.
(f) The Company's authorized equity capitalization is as set
forth in the Prospectus; the Securities conform in all material
respects to the description thereof contained in the Prospectus; all of
the outstanding shares of capital stock of the Company have been duly
and validly authorized and issued; are fully paid and nonassessable and
are free of any preemptive or similar rights.
(g) The Indenture has been duly and validly authorized,
executed and
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delivered by the Company and the Subsidiary Guarantors and, assuming
due authorization, execution and delivery by the Trustee, is a valid
and binding agreement of the Company and the Subsidiary Guarantors,
enforceable in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency or other similar laws
affecting creditor's rights generally and conforms in all material
respects to the description thereof in the Prospectus and has been duly
qualified under the Trust Indenture Act.
(h) The Securities have been duly authorized by the Company
and, when executed by the Company and authenticated by the Trustee in
accordance with the Indenture and delivered to and paid for by the
Underwriters in accordance with the terms hereof, will have been
validly issued and delivered, and will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture
and enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and subject to
the applicability of general principles of equity, and the description
of the Securities in the Prospectus will conform in all material
respects to the Securities.
(i) The Subsidiary Guarantees to be endorsed on the Securities
have been duly authorized by the Subsidiary Guarantors and, when
executed by the Subsidiary Guarantors and when the Securities are
issued and authenticated in accordance with the terms of the Indenture
and delivered to and paid for by the Underwriters in accordance with
the terms hereof, such Subsidiary Guarantees will have been validly
issued and delivered and will constitute valid and binding obligations
of the Subsidiary Guarantors entitled to the benefits of the Indenture
and enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and subject to
the applicability of general principles of equity, and the description
of the Subsidiary Guarantees in the Prospectus will conform in all
material respects to such Subsidiary Guarantees.
(j) There is no franchise, contract, indenture or other
document of a character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit thereto, which is
not described or filed as required; and the statements included or
incorporated by reference in the Prospectus under the headings "United
States Federal Tax Considerations," "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity
and Capital Resources - Environmental" and "- Lease for New Facility,"
"Description of Other Indebtedness - Credit Facility," and "- Other
Notes," "Business - Government Regulation and Traceability" and "-
Legal Proceedings" and the statements included in the Form 10-K for the
year ended December 31, 1998, under the heading "Certain Relationships
and Related Transactions" fairly summarize the matters therein
described.
(k) This Agreement has been duly authorized, executed and
delivered by the Company and the Subsidiary Guarantors and constitutes
a valid and binding obligation of the Company and the Subsidiary
Guarantors enforceable in
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accordance with its terms, except as the enforcement hereof may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and subject to the
applicability of general principles of equity, and except as rights to
indemnity and contribution hereunder may be limited by Federal or state
securities laws or principles of public policy.
(l) Neither the Company nor any Subsidiary is, and after
giving effect to the offering and sale of the Securities and the
issuance of the Subsidiary Guarantees and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940,
as amended.
(m) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and the Trust Indenture Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters in
the manner contemplated herein and in the Prospectus.
(n) Neither the issue and sale of the Securities and the
Subsidiary Guarantees nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of the Subsidiaries pursuant to, (i) the
charter or by-laws of the Company or any of the Subsidiaries, (ii) the
terms of any material indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument in any material respect to which the
Company or any of the Subsidiaries is a party or bound or to which its
or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree in any material respect
applicable to the Company or any of the Subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator
or other authority having jurisdiction over the Company or any of the
Subsidiaries or any of its or their properties.
(o) Except as disclosed in the Prospectus, no holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement. Except as described in or
contemplated in the Prospectus, there are no outstanding options,
warrants or other rights calling for the issuance of, and there are no
commitments, plans or arrangements to issue, any shares of capital
stock of the Company or any security convertible into or exchangeable
or exercisable for capital stock of the Company.
(p) The consolidated historical financial statements and
schedules of the Company and the consolidated Subsidiaries included in
the Prospectus and the Registration Statement present fairly in all
material respects the financial condition, results of operations and
cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved
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(except as otherwise noted therein). The selected financial data set
forth under the caption "Selected Consolidated Financial Data" in the
Prospectus and Registration Statement fairly present, on the basis
stated in the Prospectus and the Registration Statement, the
information included therein. The pro forma, as adjusted and as further
adjusted, financial data included in the Prospectus and the
Registration Statement include assumptions that provide a reasonable
basis for presenting the significant effects directly attributable to
the transactions and events described therein, the related adjustments
give appropriate effect to those assumptions, and the adjustments
reflect the proper application of those adjustments to the historical
financial statement amounts in the pro forma, as adjusted and as
further adjusted, financial data included in the Prospectus and the
Registration Statement. The pro forma, as adjusted and as further
adjusted, financial data included in the Prospectus and the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of Regulation S-X under the Act
and the pro forma, as adjusted and as further adjusted, adjustments
have been properly applied to the historical amounts in the compilation
of those statements.
(q) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of the Subsidiaries or its or their property is pending
or, to the best knowledge of the Company and the Subsidiary Guarantors,
threatened that (i) could reasonably be expected to have a material
adverse effect on the performance of this Agreement or the consummation
of any of the transactions contemplated hereby or (ii) could reasonably
be expected to have a Material Adverse Effect, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(r) Each of the Company and the Subsidiaries has good and
marketable title to all property (real and personal) described in the
Prospectus as being owned by it, free and clear of all liens, claims,
security interests or other encumbrances except as described in the
Prospectus, and all the property described in the Prospectus as being
held under lease by each of the Company and the Subsidiaries is held by
it under valid, subsisting and enforceable leases, with only such
exceptions as in the aggregate are not materially burdensome and do not
interfere in any material respects with the conduct of the business of
the Company and the Subsidiaries taken as a whole.
(s) Neither the Company nor any Subsidiary is in violation or
default of (i) any provision of its charter or bylaws, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other material agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to
which its property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or such Subsidiary or any of its
properties, as applicable, except in the cases of clauses (ii) and
(iii), such violations or defaults in the aggregate would not have a
Material Adverse Effect.
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(t) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have certified certain financial
statements of the Company and the consolidated Subsidiaries and
delivered their report with respect to the audited consolidated
financial statements and schedules included in the Prospectus, are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(u) The Company and each of the Subsidiaries have filed all
foreign, federal, state and local tax returns that are required to be
filed or have requested extensions thereof (except in any case in which
the failure so to file would not have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto)) and have paid all taxes required
to be paid by them and any other assessment, fine or penalty levied
against them, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is
currently being contested in good faith or as would not have a Material
Adverse Effect, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto).
(v) To the best knowledge of the Company and the Subsidiary
Guarantors, no labor problem or dispute with the employees of the
Company or any of the Subsidiaries exists or is threatened or imminent,
and the Company and the Subsidiary Guarantors are not aware of any
existing or imminent labor disturbance by the employees of any of their
principal suppliers, contractors or customers, that could have a
Material Adverse Effect, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto).
(w) The Company and each of the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; all policies of insurance and
fidelity or surety bonds insuring the Company or any of the
Subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and
the Subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the
Company or any of the Subsidiaries under any such policy or instrument
as to which any insurance company is denying liability or defending
under a reservation of rights clause; neither the Company nor any such
Subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
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(x) No Subsidiary is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any
other distribution on such Subsidiary's capital stock, from repaying to
the Company any loans or advances to such Subsidiary from the Company
or from transferring any of such Subsidiary's property or assets to the
Company or any other Subsidiary of the Company, except as described in
or contemplated by the Prospectus.
(y) Each of the Company and the Subsidiaries possess all
licenses, certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary
to conduct their respective businesses in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the
Prospectus, and neither the Company nor any such Subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(z) The Company and each of the Subsidiaries maintain 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 generally accepted accounting principles 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 assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(aa) The Company has not taken, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(bb) The Company and the Subsidiaries are (i) in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received and are in
compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus
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(exclusive of any supplement thereto). Except as set forth in the
Prospectus, neither the Company nor any of the Subsidiaries has been
named as a "potentially responsible party" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended.
(cc) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and the Subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws, or any permit, license or approval, any
related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company
has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(dd) Each of the Company and the Subsidiaries has fulfilled
its obligations, if any, under the minimum funding standards of ▇▇▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee Retirement Income Security Act of
1974 ("ERISA") and the regulations and published interpretations
thereunder with respect to each "plan" (as defined in Section 3(3) of
ERISA and such regulations and published interpretations) in which
employees of the Company and the Subsidiaries are eligible to
participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such
regulations and published interpretations. The Company and the
Subsidiaries have not incurred any unpaid liability to the Pension
Benefit Guaranty Corporation (other than for the payment of premiums in
the ordinary course) or to any such plan under Title IV of ERISA.
(ee) Except as disclosed in the Prospectus (or any amendment
or supplement thereto), subsequent to the date as of which such
information is given in the Prospectus (or any amendment or supplement
thereto), neither the Company nor any of the Subsidiaries has incurred
any liability or obligation, direct or contingent, or entered into any
transaction, not in the ordinary course of business, that is material
to the Company and the Subsidiaries taken as a whole, and there has not
been any material change in the capital stock, or material increase in
the short-term or long-term debt, of the Company or any of the
Subsidiaries or any material adverse change, or any development
involving or which could reasonably be expected to involve a
prospective material adverse change, in the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and the Subsidiaries taken as a whole.
(ff) Neither the Company nor any of the Subsidiaries nor, to
the knowledge of the Company and the Subsidiary Guarantors, any
employee or agent of the Company or any Subsidiary has made any payment
of funds of the Company or any Subsidiary or received or retained any
funds in violation of any law, rule or regulation, which violation
would have a Material Adverse Effect.
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(gg) The Company and each of the Subsidiaries own or possess
all patents, trademarks, trademark registrations, service marks,
service ▇▇▇▇ registration, trade names, copyrights, licenses,
inventions, trade secrets and rights described in the Prospectus as
being owned by any of them or necessary for the conduct of their
respective businesses, and the Company and the Subsidiary Guarantors
are not aware of any claim to the contrary or any challenge by any
other person to the rights of the Company and the Subsidiaries with
respect to the foregoing.
(hh) The Company has complied and will comply with all
provisions of Florida Statutes Section 517.075 relating to issuers
doing business with Cuba.
(ii) Except as otherwise disclosed in the Prospectus, the
Company and the Subsidiaries are implementing a comprehensive, detailed
program to analyze and address the risk that the computer hardware and
software used by them may be unable to recognize and properly execute
date-sensitive functions involving certain dates prior to and any dates
after December 31, 1999 (the "Year 2000 Problem"), and reasonably
believes that such risk will be remedied on a timely basis without
material expense and will not have a Material Adverse Effect; and the
Company believes, after due inquiry, that each supplier, vendor,
customer or financial service organization used or serviced by the
Company and the Subsidiaries has remedied or will remedy on a timely
basis the Year 2000 Problem, except to the extent that a failure to
remedy by any such supplier, vendor, customer or financial service
organization would not have a Material Adverse Effect. The Company is
in compliance with the Commissions staff legal bulletin No. 5 dated
January 12, 1998 related to Year 2000 compliance, as amended to date.
Any certificate signed by any officer of the Company and the Subsidiary
Guarantors and delivered to the Representatives or counsel for the Underwriters
in connection with the offering of the Securities shall be deemed a
representation and warranty by the Company and the Subsidiary Guarantors, as to
matters covered thereby, to each Underwriter.
2. PURCHASE AND SALE. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
____% of the principal amount thereof, plus accrued interest on the Securities
from February 15, 1999, to the Closing Date, the principal amount of the
Securities set forth opposite such Underwriter's name in Schedule I hereto.
3. DELIVERY AND PAYMENT. Delivery of and payment for the
Securities shall be made at 10:00 AM, New York City time, on ______, 1999, or at
such time on such later date not more than three Business Days after the
foregoing date as the Representatives shall designate, which date and time may
be postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of the Securities
shall be made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by
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wire transfer payable in same-day funds to an account specified by the Company.
Delivery of the Securities shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. AGREEMENTS.
The Company and the Subsidiary Guarantors agree with the
several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement or supplement to the Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished you a
copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, if the Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of the
Prospectus is otherwise required under Rule 424(b), the Company will
cause the Prospectus, properly completed, and any supplement thereto to
be filed with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Company
will promptly advise the Representatives (1) when the Registration
Statement, if not effective at the Execution Time, shall have become
effective, (2) when the Prospectus, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to Rule
424(b) or when any Rule 462(b) Registration Statement shall have been
filed with the Commission, (3) when, prior to termination of the
offering of the Securities, any amendment to the Registration Statement
shall have been filed or become effective, (4) of any request by the
Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any
supplement to the Prospectus or for any additional information, (5) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be
11
necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company promptly will (1) notify the
Representatives of such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement which will correct such statement
or omission or effect such compliance, and (3) supply any supplemented
Prospectus to you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and the Subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of each Preliminary
Prospectus and the Prospectus and any supplement thereto as the
Representatives may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating to
the offering.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of
the Securities and will pay any fee of the National Association of
Securities Dealers, Inc., in connection with its review of the
offering; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or sale
of the Securities in any jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the Company or any affiliate of the
Company or any person in privity with the Company or any affiliate of
the Company) directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any debt securities issued
or guaranteed by the Company (other than the Securities) or publicly
announce an intention to effect any such transaction, for a period of
90 days after the date of the Underwriting Agreement.
(g) Neither the Company nor any Subsidiary Guarantor will
take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result,
under the Exchange Act or otherwise, in
12
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
and the Subsidiary Guarantors contained herein as of the Execution Time and the
Closing Date, to the accuracy of the statements of the Company and the
Subsidiary Guarantors made in any certificates pursuant to the provisions
hereof, to the performance by the Company and the Subsidiary Guarantors of their
obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Prospectus,
or any supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the manner and
within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have requested and caused Akerman,
Senterfitt & ▇▇▇▇▇▇, P.A., counsel for the Company, to have furnished
to the Representatives their opinion, dated the Closing Date and
addressed to the Representatives, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with full corporate power and
authority to own or lease, as the case may be, and to operate
its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where
the failure so to qualify does not have a Material Adverse
Effect;
(ii) each of the Subsidiaries (other than Aviation
Sales Company FSC, Ltd., a Barbados corporation which has no
material operations or assets) has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction which
requires such qualification, except where the failure so to
qualify does not have a Material Adverse Effect; and all the
outstanding
13
shares of capital stock of each of the Subsidiaries (other
than Aviation Sales Company FSC, Ltd., a Barbados corporation
which has no material operations or assets) have been duly and
validly authorized and issued, and are fully paid and
nonassessable, and, except as otherwise set forth in the
Prospectus, are owned of record and, to the best knowledge of
such counsel after reasonable inquiry, beneficially by the
Company either directly, or through wholly owned Subsidiaries,
free and clear of any perfected security interest and, to the
best knowledge of such counsel after reasonable inquiry, any
other security interest, claim, lien or encumbrance;
(iii) the Company's authorized equity capitalization
is as set forth in the Prospectus; and the Securities conform
in all material respects to the description thereof contained
in the Prospectus; all of the outstanding shares of capital
stock of the Company have been duly and validly authorized and
issued, are fully paid and nonassessable and are free of any
preemptive rights and, to the best knowledge of such counsel
after due inquiry, other rights to subscribe for such capital
stock;
(iv) this Agreement and the Indenture have been duly
authorized, executed and delivered, the Indenture has been
duly qualified under the Trust Indenture Act, and this
Agreement and the Indenture constitute a legal, valid and
binding instruments enforceable against the Company and the
Subsidiary Guarantors in accordance with their terms (subject,
as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to
general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in
equity or at law); and the Securities have been duly
authorized and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid
for by the Underwriters pursuant to this Agreement, will
constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture, and the description
of the Securities in the Prospectus will conform in all
material respects to the Securities;
(v) the Subsidiary Guarantees to be endorsed on the
Securities have been duly and validly authorized by each
Subsidiary Guarantor and when executed by the Subsidiary
Guarantors in accordance with the Indenture and upon delivery
to the Underwriters, will have been validly issued and
delivered, and will constitute valid and binding obligations
of the Subsidiary Guarantors entitled to the benefits of the
Indenture, and the description of such Subsidiary Guarantees
in the Prospectus will conform in all material respects to
such Subsidiary Guarantees;
(vi) to the best knowledge of such counsel after
reasonable inquiry, there is no pending or threatened action,
suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the
Company or any of the Subsidiaries or its or their property of
14
a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus,
and there is no franchise, contract or other document of a
character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit thereto,
which is not described or filed as required; and the
statements included or incorporated by reference in the
Prospectus under the headings "United States Federal Tax
Considerations," "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and
Capital Resources - Environmental" and "- Lease for New
Facility," "Description of Other Indebtedness - Credit
Facility," and "- Other Notes," "Business - Government
Regulation and Traceability" and "- Legal Proceedings" and the
statements included in the Form 10-K for the year ended
December 31, 1998, under the heading "Certain Relationships
and Related Transactions" fairly summarize the matters therein
described;
(vii) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b);
to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued,
no proceedings for that purpose have been instituted or
threatened and the Registration Statement and the Prospectus
(other than the financial statements and other financial
information contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the applicable requirements of the Act, the Exchange Act
and the Trust Indenture Act and the respective rules
thereunder; and such counsel has no reason to believe that on
the Effective Date or at the Execution Time the Registration
Statement contained any untrue statement of a material fact or
omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus as of its date and on the
Closing Date included or includes any untrue statement of a
material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in
each case, other than the financial statements and other
financial information contained therein, as to which such
counsel need express no opinion);
(viii) the Company is not and, after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Prospectus, will not
be an "investment company" as defined in the Investment
Company Act of 1940, as amended;
(ix) no consent, approval, authorization, filing with
or order of any court or governmental agency or body is
required in connection with the transactions contemplated
herein, except such as have been obtained under the Act and
the Trust Indenture Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the
Underwriters in the manner
15
contemplated in this Agreement and in the Prospectus and such
other approvals (specified in such opinion) as have been
obtained;
(x) neither the execution and delivery of the
Indenture, the issue and sale of the Securities and the
Subsidiary Guarantees, nor the consummation of any other of
the transactions herein contemplated nor the fulfillment of
the terms hereof will conflict in any material respect with,
result in a breach or violation in any material respect of or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or the Subsidiaries pursuant
to, (i) the charter or by-laws of the Company or the
Subsidiaries, (ii) the terms of any material indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant
or instrument known to such counsel after reasonable inquiry
to which the Company or the Subsidiaries is a party or bound
or to which its or their property is subject, or (iii) any
statute, law, rule or regulation (assuming compliance with all
applicable state securities and Blue Sky laws), or any
judgment, order or decree known to such counsel after
reasonable inquiry applicable to the Company or the
Subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or the Subsidiaries or
any of its or their properties;
(xi) to the best knowledge of such counsel after
reasonable inquiry, except as described in the Prospectus, no
holders of securities of the Company have rights to the
registration of such securities under the Registration
Statement;
(xii) to the best knowledge of such counsel after
reasonable inquiry, neither the Company nor any of the
Subsidiaries is in violation of any law, ordinance,
administrative or governmental rule or regulation applicable
to the Company or any of the Subsidiaries or of any decree of
any court or governmental agency or body having jurisdiction
over the Company or any of the Subsidiaries;
(xiii) the Company and each of the Subsidiaries
(other than Aviation Sales Company FSC, Ltd., a Barbados
corporation which has no material operations or assets) have
full corporate power and authority, and all necessary
governmental authorizations, approvals, orders, licenses,
certificates, franchises and permits of and from all
government regulatory officials and bodies (except where the
failure so to have any such authorizations, approvals, orders,
licenses, certificates, franchises or permits, individually or
in the aggregate, would not have a Material Adverse Effect and
except as may be required under the Blue Sky laws or state
securities laws) to own their respective properties and to
conduct their respective businesses as now being conducted, as
described in the Prospectus;
(xiv) such counsel is not aware of any material claim
or challenge
16
by any other person to the rights of the Company and the
Subsidiaries with respect to any patents, trademarks,
trademark registrations, service marks, service ▇▇▇▇
registrations, trade names, copyrights, licenses, inventions,
trade secrets and rights described in the Prospectus as being
owned by them or any of them or necessary for the conduct of
their respective businesses; and
(xv) the Company is not required to obtain
stockholder consent for the issuance or offering of the
Securities.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
States of Delaware and Florida or the Federal laws of the United
States, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the Underwriters
and (B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and the Subsidiary
Guarantors and public officials. References to the Prospectus in this
paragraph (b) include any supplements thereto at the Closing Date.
(c) The Underwriters shall have received on the Closing Date,
an opinion of _______________, special New York counsel for the Company
and the Subsidiary Guarantors, dated the Closing Date and addressed to
the Underwriters to the effect that:
(i) both this Agreement and the Indenture is a valid,
legal and binding obligation of the Company and the Subsidiary
Guarantors, enforceable against the Company and the Subsidiary
Guarantors in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to
general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing and
except to the extent that rights to indemnity and contribution
hereunder may be limited by federal or state laws or public
policy relating thereto;
(ii) each of the Securities and the Subsidiary
Guarantees to be endorsed on the Securities, when executed by
the Company and the Subsidiary Guarantors, respectively, upon
delivery to the Underwriters against payment therefore in
accordance with the terms hereof, will constitute a valid,
legal and binding obligation of the Company and the Subsidiary
Guarantors, respectively, enforceable against the Company and
the Subsidiary Guarantors, respectively, in accordance with
its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally and
subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness,
good faith and fair dealing; and
17
(iii) neither the execution and delivery of the
Indenture, the issue and sale of the Securities and the
Subsidiary Guarantees, nor the consummation of any other of
the transactions herein contemplated nor the fulfillment of
the terms hereof will conflict in any material respect with,
result in a breach or violation in any material respect of or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or the Subsidiaries pursuant
to any statute, law, rule or regulation (assuming compliance
with all applicable state securities and Blue Sky laws), or
any judgment, order or decree known to such counsel after
reasonable inquiry applicable to the Company or the
Subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or the Subsidiaries or
any of its or their properties.
(d) The Representatives shall have received from ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date and addressed to the Representatives, with respect to
the issuance and sale of the Securities, the Indenture, the
Registration Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(e) The Company and the Subsidiary Guarantors shall have
furnished to the Representatives certificates, signed by the Chairman
of the Board or the President and the principal financial or accounting
officer of the Company and the Subsidiary Guarantors, dated the Closing
Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectus, any supplements to
the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company
and the Subsidiary Guarantors in this Agreement are true and
correct in all material respects on and as of the Closing Date
with the same effect as if made on the Closing Date and the
Company and the Subsidiary Guarantors have complied with all
the agreements and satisfied all the conditions on their part
to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the knowledge of
the Company and the Subsidiary Guarantors, threatened; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus (exclusive of any supplement thereto), there has
been no Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
18
(f) The Company shall have requested and caused ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP to have furnished to the Representatives, at the Execution
Time and at the Closing Date, letters, dated respectively as of the
Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the Exchange
Act and the respective applicable rules and regulations adopted by the
Commission thereunder and that they have performed a review of the
unaudited interim financial information of the Company for the three
month period ended March 31, 1999, and as at March 31, 1999 in
accordance with Statement on Auditing Standards No. 71, and stating in
effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus and
reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Act and the
Exchange Act and the related rules and regulations adopted by
the Commission;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and the Subsidiaries; their limited review, in accordance with
standards established under Statement on Auditing Standards
No. 71, of the unaudited interim financial information for the
three month period ended March 31, 1999, and as at March 31,
1999, included or incorporated by reference in the
Registration Statement and the Prospectus; carrying out
certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders, directors and
committees of the board of directors of the Company and the
Subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company and the Subsidiaries as to transactions
and events subsequent to December 31, 1998, nothing came to
their attention which caused them to believe that:
(1) any unaudited financial statements
included or incorporated by reference in the
Registration Statement and the Prospectus do not
comply as to form in all material respects with
applicable accounting requirements of the Act and
with the related rules and regulations adopted by the
Commission with respect to financial statements
included or incorporated by reference in quarterly
reports on Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in conformity
with generally accepted accounting principles applied
on a basis substantially consistent with that of the
audited financial statements included or incorporated
by reference in the Registration Statement and the
Prospectus;
19
(2) with respect to the period subsequent to
March 31, 1999, there were any changes, at a
specified date not more than five days prior to the
date of the letter, in the long-term liabilities of
the Company and the Subsidiaries or capital stock of
the Company or decreases in the stockholders' equity
of the Company as compared with the amounts shown on
the March 31, 1999, consolidated balance sheet
included or incorporated by reference in the
Registration Statement and the Prospectus, or for the
period from April 1, 1999 to such specified date
there were any decreases, as compared with the
corresponding period in the preceding year in
operating revenues or income before income taxes,
operating losses and extraordinary items or in total
or per share amounts of net income of the Company and
the Subsidiaries, except in all instances for changes
or decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by
the Company as to the significance thereof unless
said explanation is not deemed necessary by the
Representatives; and
(3) the information included or incorporated
by reference in the Registration Statement and
Prospectus in response to Regulation S-K, Item 301
(Selected Financial Data), Item 302 (Supplementary
Financial Information), Item 402 (Executive
Compensation) and Item 503(d) (Ratio of Earnings to
Fixed Charges) is not in conformity with the
applicable disclosure requirements of Regulation S-K;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and the Subsidiaries) set forth in the Registration
Statement and the Prospectus and in Exhibit 12 to the
Registration Statement, including the information set forth
under the captions "Prospectus Summary - Summary Consolidated
Financial Data" and "Selected Consolidated Financial Data" in
the Prospectus, the information included or incorporated by
reference in Items 1, 2, 6, 7 and 11 of the Company's Annual
Report on Form 10-K, incorporated by reference in the
Registration Statement and the Prospectus, and the information
included in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included or
incorporated by reference in the Company's Quarterly Reports
on Form 10-Q, incorporated by reference in the Registration
Statement and the Prospectus, agrees with the accounting
records of the Company and the Subsidiaries, excluding any
questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro
forma, as adjusted and as further adjusted financial data,
included or incorporated by reference in the Registration
Statement and the Prospectus (the "pro forma, as adjusted and
as further adjusted financial data"); carrying out certain
20
specified procedures; inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters; and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the pro forma, as adjusted and as further adjusted
financial data, nothing came to their attention which caused
them to believe that the pro forma, as adjusted and as further
adjusted financial data, do not comply as to form in all
material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of such data.
References to the Prospectus in this paragraph (f) include any
supplement thereto at the date of the letter.
(g) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph
(f) of this Section 6 or (ii) any change, or any development involving
a prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and the
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement thereto)
the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto).
(h) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or any notice given
of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction
of the possible change.
(i) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
(j) The Securities shall have been listed and admitted and
authorized for trading on the New York Stock Exchange, and satisfactory
evidence of such actions shall have been provided to the
Representatives.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters
21
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Underwriters, at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney on demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Subsidiary Guarantors, jointly and
severally, agree to indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person who controls
any Underwriter within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in any Preliminary Prospectus or the Prospectus, or in any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
Company and the Subsidiary Guarantors will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company and the Subsidiary Guarantors, each of
their respective directors and officers who sign the Registration Statement, and
each person who controls the Company or any Subsidiary Guarantors within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the
22
Subsidiary Guarantors to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Company by or on
behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company and the Subsidiary Guarantors acknowledge that
the statements set forth in the last paragraph of the cover page regarding
delivery of the Securities and, under the heading "Underwriting", (i) the list
of Underwriters and their respective participation in the sale of the
Securities, (ii) the sentences related to concessions and reallowances and (iii)
the paragraph related to stabilization and syndicate covering transactions and
the paragraph related to penalty bids in any Preliminary Prospectus and the
Prospectus constitute the only information furnished in writing by or on behalf
of the several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
23
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Subsidiary Guarantors and the
Underwriters severally agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively "Losses") to
which the Company, the Subsidiary Guarantors and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Subsidiary Guarantors and by the
Underwriters from the offering of the Securities; PROVIDED, HOWEVER, that in no
case shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the
Company, the Subsidiary Guarantors and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the Subsidiary
Guarantors and of the Underwriters in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the Subsidiary Guarantors
shall be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by the Company, and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Prospectus.
Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company and the Subsidiary Guarantors or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company, the
Subsidiary Guarantors and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), 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. For purposes of this Section 8,
each person who controls an Underwriter within the meaning of either the Act or
the Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such Underwriter, and
each person who controls the Company or a Subsidiary Guarantor within the
meaning of either the Act or the Exchange Act, each officer of the Company or a
Subsidiary Guarantor shall have signed the Registration Statement and each
director of the Company or a Subsidiary Guarantor shall have the same rights to
contribution as the Company and the Subsidiary Guarantors, subject in each case
to the applicable terms and conditions of this paragraph (d).
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the
24
principal amount of Securities set forth opposite their names in Schedule I
hereto bears to the aggregate principal amount of Securities set forth opposite
the names of all the remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; PROVIDED, HOWEVER,
that in the event that the aggregate principal amount of Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate principal amount of Securities set forth in Schedule
I hereto, the remaining Underwriters shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the Securities, and if
such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. TERMINATION. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company and the Subsidiary Guarantors or their officers and of the Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of the officers, directors, employees, agents or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 7 and 8 hereof
shall survive the termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., General Counsel
(fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc., at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention:
General Counsel; or, if sent to the Company, will be mailed, delivered or
telefaxed to Aviation Sales Company, Legal Department (305)
25
599-6610, and confirmed to it at ▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
attention of the Legal Department.
13. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. HEADINGS. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. DEFINITIONS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
26
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing
Date, shall also mean such registration statement as so amended or such
Rule 462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission
promulgated thereunder.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
AVIATION SALES COMPANY
By:
--------------------------------------
Name:
Title:
27
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
BT ALEX. ▇▇▇▇▇ INCORPORATED
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By:
--------------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
28
SCHEDULE I
PRINCIPAL AMOUNT
OF SECURITIES TO
UNDERWRITERS BE PURCHASED
------------ ------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc......................... $
BT Alex. ▇▇▇▇▇ Incorporated
Total................................... $85,000,000
