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$75,000,000
XXXXXXXXX INDUSTRIES, INC.
___% Convertible Subordinated Notes Due 2003
DEBT UNDERWRITING AGREEMENT
June 11, 1998
BT Alex. Xxxxx Incorporated
Xxxxx Xxxxxx & Co., Inc.
As Representatives of the
Several Underwriters
c/o BT Alex. Xxxxx Incorporated
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Xxxxxxxxx Industries, Inc., a Delaware corporation (the "Company"),
proposes to sell to the several underwriters (the "Underwriters") named in
Schedule I hereto for whom you are acting as representatives (the
"Representatives") an aggregate of $75,000,000 principal amount of the
Convertible Subordinated Notes, convertible into Common Stock (par value $.001
per share) ("Common Stock") of the Company, specified above (the "Firm
Securities"). The respective amounts of the Firm Securities to be so purchased
by the several Underwriters are set forth opposite their names in Schedule I
hereto. The Company also proposes to sell at the Underwriters' option an
aggregate of up to $11,250,000 additional aggregate principal amount (the
"Option Securities") as set forth below.
As the Representatives, you have advised the Company (a) that you are
authorized to enter into this Agreement on behalf of the several Underwriters,
and (b) that the several Underwriters are willing, acting severally and not
jointly, to purchase the amount of Firm Securities set forth opposite their
respective names in Schedule I, plus their pro rata portion of the Option
Securities if you elect to exercise the over-allotment option in whole or in
part for the accounts of the several Underwriters. The Firm Securities and the
Option Securities (to the extent the aforementioned option is exercised) are
herein collectively called the "Securities."
In consideration of the mutual agreements contained herein and of the
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interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the
Underwriters as follows:
(a) A registration statement on Form S-3 (File No. 333-52917)
with respect to the Securities and shares of the Stock issuable upon conversion
thereof has been prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the "Act"), and the Rules and
Regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder and has been filed with the Commission.
Copies of such registration statement, including any amendments thereto, the
preliminary prospectuses (meeting the requirements of the Rules and Regulations)
contained therein and the exhibits, financial statements and schedules, as
finally amended and revised, have heretofore been delivered by the Company to
you. Such registration statement, together with any registration statement filed
by the Company pursuant to Rule 462 (b) of the Act, herein referred to as the
"Registration Statement," which shall be deemed to include all information
omitted therefrom in reliance upon Rule 430A and contained in the Prospectus
referred to below, has become effective under the Act and no post-effective
amendment to the Registration Statement has been filed as of the date of this
Agreement. "Prospectus" means the form of prospectus first filed with the
Commission pursuant to Rule 424(b). Each preliminary prospectus included in the
Registration Statement prior to the time it becomes effective is herein referred
to as a "Preliminary Prospectus." Any reference herein to the Registration
Statement, any Preliminary Prospectus or to the Prospectus shall be deemed to
refer to and include any documents incorporated by reference therein, and, in
the case of any reference herein to any Prospectus, also shall be deemed to
include any documents incorporated by reference therein, and any supplements or
amendments thereto, filed with the Commission after the date of filing of the
Prospectus under Rules 424(b) or 430A, and prior to the termination of the
offering of the Securities by the Underwriters.
(b) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement. Each of the
subsidiaries of the Company as listed in Exhibit A hereto (collectively, the
"Subsidiaries") has been duly organized and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement. The Subsidiaries are the
only subsidiaries, direct or indirect, of the
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Company. The Company and each of the Subsidiaries are duly qualified to transact
business in all jurisdictions in which the conduct of their business requires
such qualification, except where the failure to so qualify would not have a
material adverse effect on the Company and the Subsidiaries taken as a whole.
Except as otherwise set forth in the Registration Statement, the outstanding
shares of capital stock of each of the Subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable and are owned by the
Company or another Subsidiary free and clear of all liens, encumbrances and
equities and claims; and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.
(c) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct. All of the Securities
conform to the description thereof contained in the Registration Statement and
all of the issued shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable, the shares
of Common Stock initially issuable upon conversion of the Securities have been
duly and validly authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Securities and the Indenture
referred to below, will be duly and validly issued, fully paid and
non-assessable and will conform to the description of the Common Stock contained
in the Prospectus.
(d) The Securities have been duly authorized and, when issued
and delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
indenture dated as of June 15, 1998 (the "Indenture") between the Company and
First Union National Bank, as Trustee (the "Trustee"), under which they are to
be issued, which is substantially in the form filed as an exhibit to the
Registration Statement; the Indenture has been duly authorized and duly
qualified under the Trust Indenture Act and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles; and the Securities and the Indenture will conform to the
descriptions thereof in the Prospectus.
(e) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering of the
Securities nor to the best of the Company's knowledge, instituted proceedings
for that purpose. The Registration Statement contains, and the Prospectus and
any amendments or supplements thereto will contain, all statements which are
required to be stated therein by, and will conform to, the requirements of the
Act and the Rules and Regulations. The documents incorporated by reference in
the
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Prospectus, at the time filed with the Commission, conformed in all respects to
the requirements of the Securities Exchange Act of 1934 (the "Exchange Act"),
the Act or the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), as applicable, and the rules and regulations of the Commission
thereunder. The Registration Statement and any amendment thereto do not contain,
and will not contain as of the applicable effective date as to the Registration
Statement and any amendment thereto, any untrue statement of a material fact and
do not omit, and will not omit as of the applicable effective date as to the
Registration Statement and any amendment thereto, to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Prospectus and any amendments and supplements thereto do not
contain, and will not contain as of the applicable filing date as to the
Prospectus, any untrue statement of material fact; and do not omit, and will not
omit as of the applicable filing date as to the Prospectus, to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from the Registration
Statement or the Prospectus, or any such amendment or supplement, 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.
(f) The consolidated financial statements of the Company and
the Subsidiaries, together with related notes and schedules as set forth or
incorporated by reference in the Registration Statement, present fairly the
financial position and the results of operations and cash flows of the Company
and the consolidated Subsidiaries, at the indicated dates and for the indicated
periods. Such financial statements and related schedules have been prepared in
accordance with generally accepted principles of accounting, consistently
applied throughout the periods involved, except as disclosed therein, and all
adjustments necessary for a fair presentation of results for such periods have
been made. The summary financial and statistical data included or incorporated
by reference in the Registration Statement presents fairly the information shown
therein and such data has been compiled on a basis consistent with the financial
statements presented therein and the books and records of the company. The pro
forma financial statements and other pro forma financial information included in
the Registration Statement and the Prospectus present fairly the information
shown therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements, have been properly
compiled on the pro forma bases described therein, and, in the opinion of the
Company, the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(g) KPMG Peat Marwick, who have certified certain of the financial
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statements filed with the Commission as part of, or incorporated by reference
in, the Registration Statement, are independent public accountants as required
by the Act and the Rules and Regulations.
(h) Except as set forth in the Registration Statement, there
is no action, suit, claim or proceeding pending or, to the best of the Company's
knowledge, threatened against the Company or any of the Subsidiaries before any
court or administrative agency or otherwise which if determined adversely to the
Company or any of its Subsidiaries could be reasonably expected to result in any
material adverse change in the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company and of the Subsidiaries taken as a whole or which would prevent the
consummation of the transactions contemplated hereby.
(i) The Company and the Subsidiaries have good and marketable
title to all of the properties and assets reflected in the financial statements
(or as described in the Registration Statement) herein above described, subject
to no lien, mortgage, pledge, charge or encumbrance of any kind except those
reflected in such financial statements or the footnotes or schedules thereto (or
as described in the Registration Statement) or which are not material in amount.
The Company and the Subsidiaries occupy their leased properties under valid and
binding leases conforming in all material respects to the description thereof
set forth in the Registration Statement.
(j) The Company and the Subsidiaries have filed all Federal,
State, local and foreign tax returns which have been required to be filed and
have paid all taxes indicated by said returns and all assessments received by
them or any of them to the extent that such taxes have become due. All tax
liabilities, if any, have been adequately provided for in the financial
statements of the Company, and the Company does not know of any actual or
proposed additional material tax assessments.
(k) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or supplemented, there
has not been any material adverse change or any development involving a
prospective material adverse change in or affecting the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise), or prospects of the Company and its Subsidiaries taken as a whole,
whether or not occurring in the ordinary course of business, and there has not
been any material transaction entered into or any material transaction that is
expected to be entered into by the Company or the Subsidiaries, other than
transactions in the ordinary course of business and changes and transactions
described in the Registration Statement, as it may be amended or supplemented.
The Company and the Subsidiaries have no material contingent obligations that
are not disclosed in the Company's financial
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statements which are included in the Registration Statement.
(l) Neither the Company nor any of the Subsidiaries is or with
the giving of notice or lapse of time or both, will be, in violation of or in
default under its Restated Certificate of Incorporation, as amended, or By-Laws,
as amended, or under any agreement, lease, contract, indenture or other
instrument or obligation to which it is a party or by which it, or any of its
properties, is bound and which default would have a material adverse effect on
the condition, financial or otherwise of the Company and its Subsidiaries taken
as a whole or the business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company and the
Subsidiaries taken as a whole. The execution and delivery of this Agreement, the
Securities and the Indenture and the consummation of the transactions herein and
therein contemplated and the fulfillment of the terms hereof and thereof will
not conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or any Subsidiary is a party, or of
the Restated Certificate of Incorporation, as amended, or By-Laws, as amended,
of the Company or any order, rule or regulation applicable to the Company or any
Subsidiary of any court or of any regulatory body or administrative agency or
other governmental body having jurisdiction, except for such conflicts, breaches
or defaults that in the aggregate would not have a material adverse effect on
the Company and the Subsidiaries taken as a whole.
(m) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body required for the execution and delivery by the Company of this
Agreement, the Securities and the Indenture and the consummation of the
transactions herein and therein contemplated (except such additional steps as
may be required by the Commission, the National Association of Securities
Dealers, Inc. (the "NASD") or such additional steps as may be necessary to
qualify the Securities for public offering by the Underwriters under state
securities or Blue Sky laws) has been obtained or made and is in full force and
effect.
(n) The Company and each of the Subsidiaries holds all
material licenses, certificates and permits from governmental authorities,
including, without limitation, laws or regulations enforced or administered by
the Federal Aviation Administration, which are necessary to the conduct of their
businesses; and neither the Company nor any of the Subsidiaries has infringed
any patents, patent rights, trade names, trademarks or copyrights, which
infringement is material to the business of the Company and the Subsidiaries
taken as a whole. The Company knows of no material infringement by others of
patents, patent rights, trade names, trademarks or copyrights owned by or
licensed to the Company.
(o) Neither the Company, nor to the best of the Company's
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knowledge, any of its affiliates, has taken or may take, directly or indirectly,
any action designed to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation of
the price of the shares of Common Stock to facilitate the sale or resale of the
Securities. The Company acknowledges that the Underwriters may engage in passive
market making transactions in the Securities on the NASDAQ Stock Market in
accordance with Rule 103 of Regulation M under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(p) Neither the Company nor any Subsidiary is an "investment
company" within the meaning of such term under the Investment Company Act of
1940, (as amended, the "1940 Act") and the rules and regulations of the
Commission thereunder.
(q) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(r) The Company and each of its Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is reasonably
adequate for the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
industries.
(s) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which could reasonably be
expected to cause the loss of such qualification.
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(t) To the best of the Company's knowledge, there are no
affiliations or associations between any member of the NASD and any of the
Company's officers, directors or 5% or greater securityholders, except as set
forth in the Registration Statement.
(u) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes.
(v) Other than payments required or allowed by applicable law
of the United States, neither the Company nor any of the Subsidiaries has, nor
to the best of the Company's knowledge, has any officer, director or employee of
the Company or any of the Subsidiaries or any other person acting on behalf of
the Company or any of the Subsidiaries, for the benefit of the Company or any of
the Subsidiaries at any time during the last five years, (i) made any unlawful
gift or contribution to any candidate for federal, state, local or foreign
political office, or failed to disclose fully any such gift or contribution in
violation of law, or (ii) made any payment to any federal, state, local or
foreign governmental officer or official, which would be reasonably likely to
subject the Company or the Subsidiaries to any damage or penalty in any civil,
criminal or governmental litigation or proceeding (domestic or foreign). Each of
the Company's and the Subsidiaries' internal accounting controls are sufficient
to cause the Company and the Subsidiaries to comply with the Foreign Corrupt
Practices Act of 1977, as amended.
(w) Neither the Company nor any of the Subsidiaries has been
notified or is otherwise aware that it is potentially liable, or is considered
potentially liable, under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, or any similar law ("Environmental
Laws"). To the best of the Company's knowledge, the Company and the Subsidiaries
are in substantial compliance with all applicable existing Environmental Laws,
except for such instances of non-compliance which would not have a material
adverse effect on the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and the
Subsidiaries taken as a whole. The term "Hazardous Material" means (i) any
"hazardous substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (ii) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act, as amended, (iii) any
petroleum or petroleum product, (iv) any polychlorinated biphenyl and (v) any
pollutant or contaminant or hazardous, dangerous or toxic chemical, material,
waste or substance regulated under or within the meaning of any other
Environmental Law. To the best of the Company's knowledge, no disposal, release
or discharge of "Hazardous Material" has occurred on, in, at or about any of the
facilities or properties of the Company or any of the Subsidiaries, which could
reasonably be expected to result in a material adverse effect on the Company and
the Subsidiaries taken as a whole.
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(x) The Company and its Subsidiaries in the conduct of their
respective businesses are in compliance with all applicable laws related to
economic sanctions and export controls, except where the failure to comply would
not have a material adverse effect upon the Company and the Subsidiaries taken
as a whole.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SECURITIES.
(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein set forth, the
Company agrees to issue and sell to the Underwriters 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, if any
from June ___, 1998 to the Time of Delivery hereunder, the principal amount of
Securities, the number of Firm Securities set forth opposite the name of each
Underwriter in Schedule I hereof, subject to adjustments in accordance with
Section 9 hereof.
(b) Payment for the Firm Securities to be sold hereunder is to
be made by the Underwriters by wire transfer of immediately available funds to a
bank account designated by the Company for the Firm Securities to be sold by it,
and against delivery of certificates therefor to the Representatives for the
several accounts of the Underwriters. Such payment and delivery may be made by
credit through full fast transfer to accounts at The Depository Trust Company,
New York, New York, designated by the Representatives, at 10:00 a.m., New York
time, on the third business day after the date of this Agreement or at such
other time and date not later than five business days thereafter as you and the
Company shall agree upon, such time and date being herein referred to as the
"Closing Date." (As used herein, "business day" means a day on which the New
York Stock Exchange and the NASDAQ Stock Market are open for trading and on
which banks in New York are open for business and are not permitted by law or
executive order to be closed.)
(c) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the several Underwriters to
purchase the Option Securities at the price per share as set forth in the first
paragraph of this Section 2. The option granted hereby may be exercised in whole
or in part, on one occasion only, by giving written notice within 30 days after
the date of this Agreement, by you, as Representatives of the several
Underwriters, to the Company setting forth the number of Option Securities as to
which the several Underwriters are exercising the option, the names and
denominations in which the Option Securities are to be registered and the time
and date at which such certificates are to be delivered. The time and date at
which certificates for Option Securities are to be delivered shall be determined
by the Representatives but shall not be earlier than three nor later than ten
full business days after the exercise of such option, nor in any event
prior to the Closing Date (such time and date being herein referred to as
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the "Option Closing Date"). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall set the Closing
Date as the Option Closing Date. The principal amount of Option Securities to be
purchased by each Underwriter shall be in the same proportion to the aggregate
principal amount of Option Securities being purchased as the principal amount of
Firm Securities being purchased by such Underwriter bears to $75,000,000,
adjusted by you in such manner as to avoid fractional Securities. The option
with respect to the Option Securities granted hereunder may be exercised only to
cover over-allotments in the sale of the Firm Securities by the Underwriters.
You, as Representatives of the several Underwriters, may cancel such option at
any time prior to its expiration by giving written notice of such cancellation
to the Company. To the extent, if any, that the option is exercised, payment for
the Option Securities shall be made on the Option Closing Date by wire transfer
of immediately available funds to a bank account designated by the Company
against delivery of Certificates therefor at the office of BT Alex. Xxxxx
Incorporated, Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, or through the facilities
of The Depository Trust Company in New York, New York drawn to the order of the
Company.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a
public offering of the Firm Securities as soon as the Representatives deem it
advisable to do so. The Firm Securities are to be initially offered to the
public at the initial public offering price for sale upon the terms and
conditions set forth in the Prospectus. The Representatives may from time to
time thereafter change the public offering price and change other selling terms
if deemed appropriate after consultation with the Company. To the extent, if at
all, that any Option Securities are purchased pursuant to Section 2 hereof, the
Underwriters will offer them for sale on the foregoing terms.
It is further understood that you will act as the
Representatives for the Underwriters in the offering and sale of the Securities
in accordance with a Master Agreement Among Underwriters entered into by you and
the several other Underwriters.
4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with the several Underwriters
that:
(a) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule 430A of
the Rules and Regulations is followed, to prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations a Prospectus in a form
approved by
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the Representatives containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the
Rules and Regulations, and (B) not file any amendment to the Registration
Statement or supplement to the Prospectus or document incorporated by reference
therein of which the Representatives shall not previously have been advised and
furnished with a copy or to which the Representatives shall have reasonably
objected in writing or which is not in compliance with the Rules and Regulations
and (C) file on a timely basis all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
subsequent to the date of the Prospectus and prior to the termination of the
offering of the Securities by the Underwriters.
(b) The Company will advise the Representatives promptly (A)
when the Registration Statement or any post-effective amendment thereto shall
have become effective, (B) of receipt of any comments from the Commission, (C)
of any request of the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, and (D) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the use of the Prospectus or of the institution of
any proceedings for that purpose. The Company will use its best efforts to
prevent the issuance of any such stop order preventing or suspending the use of
the Prospectus and to obtain as soon as possible the lifting thereof, if issued.
(c) The Company will cooperate with the Representatives in
endeavoring to qualify the Securities and the shares of Stock issuable upon
conversion of the Securities for offering or sale under the securities laws of
such jurisdictions as the Representatives may reasonably have designated in
writing and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is not now so
qualified or required to file such a consent. The Company will, from time to
time, prepare and file such statements, reports, and other documents, as are or
may be required to continue such qualifications in effect for so long a period
as the Representatives may reasonably request for distribution of the
Securities.
(d) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary Prospectus
as the Representatives may reasonably request. The Company will deliver to, or
upon the order of, the Representatives during the period when delivery of a
Prospectus is required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the Representatives may
reasonably request. The Company will deliver to the Representatives at or before
the Closing Date, four signed copies of the Registration Statement and all
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amendments thereto including all exhibits filed therewith, and will deliver to
the Representatives such number of copies of the Registration Statement
(including such number of copies of the exhibits filed therewith that may
reasonably be requested), including documents incorporated by reference therein,
and of all amendments thereto, as the Representatives may reasonably request.
(e) The Company will comply with the Act and the Rules and
Regulations, and the Exchange Act and the Trust Indenture Act, so as to permit
the completion of the distribution of the Securities as contemplated in this
Agreement, the Indenture and the Prospectus. If during the period in which a
prospectus is required by law to be delivered by an Underwriter or dealer, any
event shall occur as a result of which, in the judgment of the Company or in the
reasonable opinion of the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in the light
of the circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading, or, if it is necessary at any time to amend or
supplement the Prospectus to comply with any law, the Company promptly will
either (i) prepare and file with the Commission an appropriate amendment to the
Registration Statement or supplement to the Prospectus or (ii) prepare and file
with the Commission an appropriate filing under the Exchange Act which shall be
incorporated by reference in the Prospectus so that the Prospectus as so amended
or supplemented will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances when it is so
delivered, not misleading, or so that the Prospectus will comply with the law.
(f) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later than
15 months after the effective date of the Registration Statement, an earning
statement (which need not be audited) in reasonable detail, covering a period of
at least 12 consecutive months beginning after the effective date of the
Registration Statement, which earning statement shall satisfy the requirements
of Section 11(a) of the Act and Rule 158 of the Rules and Regulations and will
advise you in writing when such statement has been so made available.
(g) Prior to the Closing Date, the Company will furnish to the
Underwriters, as soon as they have been prepared by or are available to the
Company, a copy of any unaudited interim financial statements of the Company for
any period subsequent to the period covered by the most recent financial
statements appearing in the Registration Statement and the Prospectus.
(h) Other than as set forth in the Registration Statement, the
Company will not offer, sell, contract to sell or otherwise dispose of sale,
short sale or other disposition of any shares of Common Stock of the Company or
other
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securities that are substantially similar to the shares of Common Stock or that
are convertible into or exchangeable or exercisable for shares of Common Stock
or derivative of Common Stock (or agreement for such) will be made for a period
of 90 days after the date of this Agreement, directly or indirectly, by the
Company otherwise than hereunder or with the prior written consent of BT Alex.
Xxxxx Incorporated and Xxxxx Xxxxxx & Co., Inc., which will not be unreasonably
withheld.
(i) The Company has caused certain officers and directors and
specific shareholders of the Company to furnish to you, on or prior to the date
of this Agreement, a letter or letters, in form and substance satisfactory to
the Underwriters, pursuant to which each such person shall agree, except as set
forth in the Registration Statement, not to offer, sell, sell short, grant any
options to purchase, pledge or otherwise dispose of any shares of Common Stock
of the Company or other capital stock of the Company, or any other securities of
the Company that are substantially similar to the shares of Common Stock or that
are convertible into, exchangeable for, derivative from or exercisable for
Common Stock or substantially similar securities by such person or request the
registration for the offer or sale of any of the foregoing (or as to which such
person has the right to direct the disposition of) for a period of 90 days after
the date of this Agreement, directly or indirectly, except as permitted by such
letters or with the prior written consent of BT Alex. Xxxxx Incorporated
("Lock-Up Agreements"), which will not be unreasonably withheld.
(j) The Company shall apply the net proceeds of its sale of
the Securities as set forth in the Prospectus.
(k) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Securities in such a
manner as would require the Company or any of the Subsidiaries to register as an
investment company under the 1940 Act.
(l) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
for the Common Stock issuable upon conversion of the Securities.
(m) The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company.
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to
the performance of the obligations of the Company under this Agreement,
including,
14
without limiting the generality of the foregoing, the following: accounting fees
of the Company; the fees and disbursements of counsel for the Company; the cost
of printing and delivering to, or as requested by, the Underwriters copies of
the Registration Statement, Preliminary Prospectuses, the Prospectus, this
Agreement, the Listing Application, the Blue Sky Memorandum and any supplements
or amendments thereto; the filing fees of the Commission; the filing fees and
expenses (including disbursements but excluding legal fees of counsel to the
Underwriters) incident to securing any required review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the Securities; any fees charged by securities ratings services for rating the
Securities; the Listing Fee of the NASDAQ Stock Market upon conversion of the
Securities; and the expenses) (including disbursements but excluding legal fees
of counsel for the Underwriters) incurred in connection with the qualification
of the Securities and the shares of Common Stock issuable upon conversion of the
Securities under State securities or Blue Sky laws; the cost of preparing the
Securities; the fees and expenses of the Trustee and any agent of the Trustee
and the fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities. The Company shall not, however, be required to pay
for any of the Underwriters' expenses (other than those related to qualification
under NASD regulation and State securities or Blue Sky laws) except that, if
this Agreement shall not be consummated because the conditions in Section 6
hereof are not satisfied, or because this Agreement is terminated by the
Representatives pursuant to Section 11 hereof, or by reason of any failure,
refusal or inability on the part of the Company to perform any undertaking or
satisfy any condition of this Agreement or to comply with any of the terms
hereof on its part to be performed, unless such failure to satisfy said
condition or to comply with said terms be due to the default or omission of any
Underwriter, then the Company shall reimburse the several Underwriters for
reasonable out-of-pocket expenses, including reasonable fees and disbursements
of counsel not to exceed $300,000, reasonably incurred in connection with
investigating, marketing and proposing to market the Securities or in
contemplation of performing their obligations hereunder; but the Company shall
not in any event be liable to any of the several Underwriters for damages on
account of loss of anticipated profits from the sale by them of the Securities.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the
Firm Securities on the Closing Date and the Option Securities, if any, on the
Option Closing Date are subject to the accuracy, as of the Closing Date or the
Option Closing Date, as the case may be, of the representations and warranties
of the Company contained herein, and to the performance by the Company of its
covenants and obligations hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective
amendments
15
thereto shall have become effective and any and all filings required by Rule 424
and Rule 430A of the Rules and Regulations shall have been made, and any request
of the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall have been taken or,
to the best of the Company's knowledge, shall be contemplated by the Commission
and no injunction, restraining order, or order of any nature by a Federal or
state court of competent jurisdiction shall have been issued as of the Closing
Date which would prevent the issuance of the Securities.
(b) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion of Akerman,
Senterfitt & Xxxxxx, P.A., counsel for the Company, dated the Closing Date or
the Option Closing Date, as the case may be, addressed to the Underwriters (and
stating that it may be relied upon by counsel to the Underwriters) to the effect
that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement; each of
Integrated Technology Holdings, Corp., Xxxxxxxxx Commercial Aircraft, Inc. and
Aero Support Holdings, Inc. (the "Domestic Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, with corporate power and
authority to own or lease its properties and conduct its business as described
in the Registration Statement; the Company and each of the Domestic Subsidiaries
are duly qualified to transact business in all jurisdictions in which the
conduct of their business requires such qualification, except where the failure
to qualify would not have a materially adverse effect upon the business,
operations or financial condition of the Company and the Subsidiaries taken as a
whole; the outstanding shares of capital stock of each of the Domestic
Subsidiaries have been validly authorized and issued, are fully paid and
non-assessable and are owned by the Company; and, to the best of such counsel's
knowledge, the outstanding Securities of capital stock of each of the
Subsidiaries is owned free and clear of all liens, claims and encumbrances
except for a lien held by Xxxxxxx Bank, N.A. to secure, among other things, the
Company's obligations under the Credit Facility (as defined in the Prospectus)
and, to the best of such counsel's knowledge no options, warrants or other
rights to purchase, agreements or other obligations to issue or other rights to
convert any obligations into any shares of capital stock or of ownership
interests in the Domestic Subsidiaries are outstanding.
(ii) The Securities have been duly authorized and,
when executed and delivered to and paid for in accordance with the terms
16
of this Agreement, will constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the indenture dated as of June 16,
1998 (the "Indenture") between the Company and First Union National Bank, as
Trustee (the "Trustee"), under which they are to be issued, which is
substantially in the form filed as an exhibit to the Registration Statement; the
Indenture has been duly authorized and duly qualified under the Trust Indenture
Act and constitutes a valid and legally binding instrument, enforceable against
the Company in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles; and
the Securities and the Indenture will conform to the descriptions thereof in the
Prospectus.
(iii) Except as described in or contemplated by the
Prospectus, to the best of such counsel's knowledge, there are no outstanding
securities of the Company convertible or exchangeable into or evidencing the
right to purchase or subscribe for any Securities of capital stock of the
Company and there are no outstanding or authorized options, warrants or rights
of any character obligating the Company to issue any shares of its capital stock
or any securities convertible or exchangeable into or evidencing the right to
purchase or subscribe for any shares of such stock; and except as described in
the Prospectus, to the best of such counsel's knowledge, no holder of any
securities of the Company or any other person has the right, contractual or
otherwise, which has not been satisfied or effectively waived, to cause the
Company to sell or otherwise issue to them, or to permit them to underwrite the
sale of, any of the Securities or the right to have any shares of Common Stock
or other securities of the Company included in the Registration Statement or the
right, as a result of the filing of the Registration Statement, to require
registration under the Act of any Common Stock or other securities of the
Company.
(v) The Registration Statement has become effective
under the Act and, to the best of the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Act.
(vi) The Registration Statement, the Prospectus and
each amendment or supplement thereto and the documents incorporated by reference
therein comply as to form in all material respects with the requirements of the
Act or the Securities Exchange Act of 1934, as applicable and the applicable
rules and regulations thereunder (except that such counsel need express no
opinion as to (i) the financial statements, footnotes, related schedules or
financial information derived therefrom included in the Registration Statement
or incorporated by reference therein or excluded therefrom, (ii) the accuracy,
completeness or fairness of the statements contained in the Registration
Statement except as the extent expressly set forth in the final paragraph of
this subsection (b)).
17
(vii) The statements set forth in the Prospectus
under the caption "Description of Notes," insofar as they purport to constitute
a summary of the terms of the Securities and Common Stock of the Company and
under the captions "Certain Federal Tax Considerations" and "Underwriting,"
insofar as such statements constitute a summary of documents referred to therein
or matters of law, fairly summarize in all material respects the information
called for with respect to such documents and matters.
(viii) Such counsel does not know of any contracts
or documents required to be filed as exhibits to or incorporated by reference in
the Registration Statement or described in the Registration Statement or the
Prospectus which are no so filed, incorporated by reference or described as
required, and such contracts and documents as are summarized in the Registration
Statement or the Prospectus are fairly summarized in all material respects.
(ix) To the best of such counsel's knowledge, except
as disclosed in the Prospectus, there is no action, suit or proceeding at law or
in equity or by or before any governmental authority now pending or threatened
against or affecting the Company or any of the Subsidiaries which would be
required to be disclosed in the Prospectus.
(x) The execution and delivery of this Agreement
and the consummation of the transactions herein contemplated do not and will not
conflict with or result in a material breach of any of the terms or provisions
of, or constitute a default under, the Restated Certificate of Incorporation, as
amended, or By-Laws, as amended, of the Company, or any material agreement or
instrument known to such counsel to which the Company or any of the Subsidiaries
is a party or by which the Company or any of the Subsidiaries may be bound.
(xi) This Agreement has been duly authorized,
executed and delivered by the Company.
(xii) The Securities are convertible into shares of
Common Stock in accordance with the terms of the Indenture, and the shares of
Common Stock initially issuable upon conversion of the Securities have been duly
authorized and reserved for issuance upon such conversion in accordance with the
terms of the Indenture and, when issued upon such conversion, will be validly
issued, fully paid and nonassessable.
(xiii) The Indenture has been duly authorized,
executed and delivered by the Company and, assuming the due authorization,
execution and delivery thereof by the Trustee constitutes a valid and legally
binding instrument of the Company, enforceable in accordance with its terms,
subject, as to enforcement,
18
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights to general equity
principles.
(xiv) To the best of such counsel's knowledge, no
authorization, consent, approval of or qualification with, any governmental
authority is required for the performance by the Company of its obligations
under this Agreement or the Indenture and the consummation of the transactions
herein contemplated except such as may be required under state or other blue sky
laws in connection with the purchase and distribution of the Securities (on
which we express no opinion) by the Underwriters or as has been obtained, except
as would either not have a material adverse effect on the Company and the
Subsidiaries taken as a whole or on the ability of the Company to perform its
obligations under this Agreement.
(xv) The Company is not, and will not become, as a
result of the consummation of the transactions contemplated by this Agreement,
and application of the net proceeds therefrom as described in the Prospectus,
required to register as an investment company under the 1940 Act.
In addition to the matters set forth above, such opinion shall
also include a statement to the effect that nothing has come to the attention of
such counsel which leads them to believe that (i) the Registration Statement, at
the time it became effective under the Act (but after giving effect to any
modifications incorporated therein pursuant to Rule 430A under the Act) and as
of the Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and (ii) the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the Rules and Regulations and as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they are made, not
misleading (except that such counsel need express no view as to financial
statements, footnotes, related schedules, and other financial or statistical
information derived therefrom). With respect to such statement, Akerman,
Senterfitt & Xxxxxx, P.A. may state that their belief is based upon the
procedures set forth therein, but is without independent check and verification.
In rendering such opinion, counsel may rely as to matters of fact on
certificates of officers of the Company.
(c) The Representatives shall have received from Xxxxxxxx &
Xxxxxxxx, counsel for the Underwriters, such opinion or opinions dated the
Closing Date or the Option Closing Date, as the case may be, with respect to the
incorporation of the Company, the validity of the Securities being delivered at
the Closing Date or the Option Closing Date, as the case may be, the due
authorization, execution and delivery of this Agreement, the Registration
Statement, the
19
Prospectus, the Indenture and other related matters as the Representative may
reasonably request.
(d) The Representatives shall have received at or prior to the
Closing Date from Xxxxxxxx & Xxxxxxxx a memorandum or summary, in form and
substance satisfactory to the Representatives, with respect to the qualification
for offering and sale by the Underwriters of the Securities under the State
securities or Blue Sky laws of such jurisdictions as the Representatives may
reasonably have designated to the Company.
(e) You shall have received, on each of the dates hereof, the
Closing Date and the Option Closing Date, as the case may be, a letter dated the
date hereof, the Closing Date or the Option Closing Date, as the case may be, in
form and substance satisfactory to you, of KPMG Peat Marwick confirming that
they are independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating that in their
opinion the financial statements and schedules examined by them and included in
the Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Act and the related published Rules
and Regulations; and containing such other statements and information as you may
reasonably request with respect to the financial statements including the pro
forma financial statements, of the Company and its Subsidiaries and certain
financial and statistical information contained in the Registration Statement
and Prospectus.
(f) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, a certificate or
certificates of the Chief Executive Officer and the Chief Financial Officer of
the Company to the effect that, as of the Closing Date or the Option Closing
Date, as the case may be, each of them severally represents as follows:
(i) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for such purpose have been taken
or are, to the best of his knowledge, contemplated by the Commission;
(ii) The representations and warranties of the
Company contained in Section 1 hereof are true and correct as of the Closing
Date or the Option Closing Date, as the case may be;
(iii) All filings required to have been made
pursuant to Rules 424 or 430A under the Act have been made;
(iv) He has carefully examined the Registration
Statement and the Prospectus and, in his opinion, as of the effective date of
the Registration
20
Statement, the statements contained in the Registration Statement were true and
correct in all material respects, and such Registration Statement and Prospectus
did not omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading, and since the effective
date of the Registration Statement, no event has occurred which should have been
set forth in a supplement to or an amendment of the Prospectus which has not
been so set forth in such supplement or amendment; and
(v) Since the respective dates as of which
information is given in the Registration Statement and Prospectus, there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the condition, financial or otherwise,
of the Company and its Subsidiaries taken as a whole or the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and the Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business.
(g) The Company shall have furnished to the Representatives
such further certificates and documents confirming the representations and
warranties, covenants and conditions contained herein and related matters as the
Representatives may reasonably have requested.
(h) The Firm Securities and Option Securities, if any, have
been duly listed for quotation on the NASDAQ Stock Market.
(i) The Lock-Up Agreements described in Section 4(j)(x)
are in full force and effect.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are
in all material respects reasonably satisfactory to the Representatives and to
Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters.
If any of the conditions herein above provided for in this
Section 6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of the Underwriters hereunder may be terminated
by the Representatives by notifying the Company of such termination in writing
or by telegram at or prior to the Closing Date or the Option Closing Date, as
the case may be.
In such event, the Company and the Underwriters shall not be
under any obligation to each other (except to the extent provided in Sections 5
and 8 hereof).
21
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to sell and deliver the portion
of the Securities required to be delivered as and when specified in this
Agreement are subject to the conditions that at the Closing Date or the Option
Closing Date, as the case may be, no stop order suspending the effectiveness of
the Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company agrees:
(1) to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of the Act,
against any losses, claims, damages or liabilities to which such Underwriter or
any such controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, (ii) 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 will reimburse each Underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
such Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding or in
responding to a subpoena or governmental inquiry related to the offering of the
Securities, whether or not such Underwriter or controlling person is a party to
any action or proceeding; provided, however, that the Company 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 an untrue statement or alleged untrue statement,
or omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through the Representatives specifically for inclusion therein.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(2) to reimburse each Underwriter and each such controlling
person upon demand for any legal or other out-of-pocket expenses reasonably
incurred by such Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage or liability, action or
proceeding or in responding to a subpoena or governmental inquiry related to the
offering of the Securities, whether or not such Underwriter or controlling
person is a party to any
22
action or proceeding. In the event that it is finally judicially determined that
the Underwriters were not entitled to receive payments for legal and other
expenses pursuant to this subparagraph, the Underwriters will promptly return
all sums that had been advanced pursuant hereto.
(b) Each Underwriter severally and not jointly will indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer or controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or (ii) the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made; and
will reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; provided, however, that each Underwriter will be liable in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be available to any
party who shall fail to give notice as provided in this Section 8(c) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 8(a) or (b). In case any such proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense
23
thereof, with counsel satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel at its own expense. Notwithstanding the foregoing, the indemnifying
party shall pay as incurred (or within 30 days of presentation) the fees and
expenses of the counsel retained by the indemnified party in the event (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel acceptable to the indemnified party within a reasonable period of time
after notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by you in the case of parties indemnified
pursuant to Section 8(a) and by the Company in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims,
24
damages or liabilities, (or actions or proceedings in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 8(d) shall be deemed to include 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 subsection (d), (i) no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Securities purchased by such Underwriter and (ii)
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this Section 8(d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) In any proceeding relating to the Registration Statement,
any Preliminary Prospectus, the Prospectus or any supplement or amendment
thereto, each party against whom contribution may be sought under this Section 8
hereby consents to the jurisdiction of any court having jurisdiction over any
other contributing party, agrees that process issuing from such court may be
served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him or it as an additional defendant in any such proceeding in which such other
contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and
25
contribution agreements contained in this Section 8 and the representations and
warranties of the Company set forth in this Agreement shall remain operative and
in full force and effect, regardless of (i) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter, the
Company, its directors or officers or any persons controlling the Company, (ii)
acceptance of any Securities and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter, or to the
Company, its directors or officers, or any person controlling the Company, shall
be entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 8.
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case
may be, any Underwriter shall fail to purchase and pay for the principal amount
of the Securities which such Underwriter has agreed to purchase and pay for on
such date (otherwise than by reason of any default on the part of the Company),
you, as Representatives of the Underwriters, shall use your reasonable efforts
to procure within 36 hours thereafter one or more of the other Underwriters, or
any others, to purchase from the Company such amounts as may be agreed upon and
upon the terms set forth herein, the Firm Securities or Option Securities, as
the case may be, which the defaulting Underwriter or Underwriters failed to
purchase. If during such 36 hours you, as such Representatives, shall not have
procured such other Underwriters, or any others, to purchase the Firm Securities
or Option Securities, as the case may be, agreed to be purchased by the
defaulting Underwriter or Underwriters, then (a) if the aggregate principal
amount of Securities with respect to which such default shall occur does not
exceed 10% of the Firm Securities or Option Securities, as the case may be,
covered hereby, the other Underwriters shall be obligated, severally, in
proportion to the respective principal amounts of Firm Securities or Option
Securities, as the case may be, which they are obligated to purchase hereunder,
to purchase the Firm Securities or Option Securities, as the case may be, which
such defaulting Underwriter or Underwriters failed to purchase, or (b) if the
aggregate principal amount of Securities or Firm Securities or Option
Securities, as the case may be, with respect to which such default shall occur
exceeds 10% of the Firm Securities or Option Securities, as the case may be,
covered hereby, the Company or you as the Representatives of the Underwriters
will have the right, by written notice given within the next 36-hour period to
the parties to this Agreement, to terminate this Agreement without liability on
the part of the non-defaulting Underwriters or of the Company except to the
extent provided in Section 8 hereof. In the event of a default by any
Underwriter or Underwriters, as set forth in this Section 9, the Closing Date or
Option Closing Date, as the case may be, may be postponed for such period, not
exceeding seven days, as you, as Representatives, may determine in order that
the required changes in the Registration Statement or in the Prospectus or in
any other documents or arrangements may be effected. The term "Underwriter"
includes any person
26
substituted for a defaulting Underwriter. Any action taken under this Section 9
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: if to the Underwriters, to BT Alex. Xxxxx
Incorporated, Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx
Xxx; with a copy to BT Alex. Xxxxx Incorporated, One Bankers Trust Plaza, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxxx; if to the
Company, to:
Xxxxxxxxx Industries, Inc.
Sawgrass International Corporate Park
00000 X.X. 0xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
(000) 000-0000 (fax)
with a copy to:
Xxxxx X. March
Akerman Senterfitt & Xxxxxx, P.A.
Xxx Xxxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
(000) 000-0000 (fax)
11. TERMINATION.
(a) This Agreement may be terminated by you by notice to the
Company at any time prior to the Closing Date 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 any
development involving a prospective material adverse change in or affecting the
condition, financial or otherwise, of the Company and its Subsidiaries taken as
a whole or the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
its Subsidiaries taken as a whole, whether or not arising in the ordinary course
of business, (ii) any outbreak or escalation of hostilities or declaration of
war or national emergency or other national or international calamity or crisis
or change in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in your reasonable judgment, make it
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) suspension of trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or the
27
NASDAQ Stock Market or limitation on prices (other than limitations on hours or
numbers of days of trading) for securities on either such Exchange, (iv) the
enactment, publication, decree or other promulgation of any statute, regulation,
rule or order of any court or other governmental authority which in your opinion
materially and adversely affects or may materially and adversely affect the
business or operations of the Company, (v) declaration of a banking moratorium
by United States or New York State authorities, (vi) any downgrading shall have
occurred in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, or such organization
shall have publicly announced that it has under surveillance or review, with
negative implications, its rating of any of the Company's debt securities, (vii)
the suspension of trading of the Company's Common Stock by the NASDAQ Stock
Market, the Commission, or any other governmental authority or, (viii) the
taking of any action by any governmental body or agency in respect of its
monetary or fiscal affairs which in your reasonable opinion has a material
adverse effect on the securities markets in the United States; or
(b) as provided in Sections 6 and 9 of this Agreement.
12. SUCCESSORS.
This Agreement has been and is made solely for the benefit of
the Underwriters and the Company and their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Securities from any Underwriter
shall be deemed a successor or assign merely because of such purchase.
13. INFORMATION PROVIDED BY UNDERWRITERS.
The Company and the Underwriters acknowledge and agree that
the only information furnished or to be furnished by any Underwriter to the
Company for inclusion in any Prospectus or the Registration Statement consists
of the information set forth in the last paragraph on the front cover page
(insofar as such information relates to the Underwriters), legends required by
Item 502(d) of Regulation S-K under the Act and the information under the
caption "Underwriting" in the Prospectus.
14. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination
28
of this Agreement, (b) any investigation made by or on behalf of any Underwriter
or controlling person thereof, or by or on behalf of the Company or its
directors or officers and (c) delivery of and payment for the Securities under
this Agreement.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
XXXXXXXXX INDUSTRIES, INC.
By
-------------------------------------
Zivi Nedivi
Chief Executive Officer and President
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
BT ALEX. XXXXX INCORPORATED
XXXXX XXXXXX & CO., INC.
As Representatives of the several
Underwriters listed on Schedule I
By: BT Alex. Xxxxx Incorporated
By:
-------------------------------------
Authorized Officer
29
SCHEDULE I
SCHEDULE OF UNDERWRITERS
PRINCIPAL AMOUNT OF FIRM
UNDERWRITER SECURITIES TO BE PURCHASED
----------- --------------------------
BT Alex. Xxxxx Incorporated $
Xxxxx Xxxxxx & Co., Inc.
$
---------------
Total $
---------------
30
SCHEDULE II
Schedule of Option Securities
MAXIMUM AMOUNT PERCENTAGE OF
OF OPTION SECURITIES TOTAL PRINCIPAL AMOUNT
NAME OF SELLER TO BE SOLD OF OPTION SECURITIES
-------------- -------------------- ----------------------
------ ---
Total 100%
------ ---
31
EXHIBIT A
List of Subsidiaries of Xxxxxxxxx Industries, Inc.:
NAME: JURISDICTION OF INCORPORATION:
----- ------------------------------
Integrated Technology Holdings, Corp. Delaware
Xxxxxxxxx Commercial Aircraft, Inc. Delaware
Aero Support Holdings, Inc. Delaware
Xxxxxxxxx International Sales Corporation United States Virgin Islands
