EXHIBIT 10.1
EXECUTION COPY
AVIALL, INC.
$200,000,000
7 5/8% Senior Notes due 2011
Purchase Agreement
New York, New York
June 25, 2003
Citigroup Global Markets Inc.
Credit Suisse First Boston LLC
Wachovia Securities, LLC
As Representatives of the Initial Purchasers
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Aviall, Inc., a corporation organized under the laws of
Delaware (the "Company"), proposes to issue and sell to the several parties
named in Schedule I hereto (the "Initial Purchasers"), for whom you (the
"Representatives") are acting as representatives, $200,000,000 principal amount
of its 7 5/8% Senior Notes due 2011 (the "Notes"). The Notes will be
unconditionally guaranteed (the "Subsidiary Guarantees," and together with the
Notes, the "Securities") by each of the Company's direct and indirect
Subsidiaries set forth on the signature page hereto (the "Subsidiary
Guarantors"). The Securities are to be issued under an indenture (the
"Indenture"), to be dated as of June 30, 2003, between the Company, the
Subsidiary Guarantors and The Bank of New York, as trustee (the "Trustee"). The
Securities have the benefit of a registration rights agreement (the
"Registration Rights Agreement"), to be dated as of June 30, 2003, between the
Company, the Subsidiary Guarantors and the Initial Purchasers, pursuant to which
the Company and the Subsidiary Guarantors have agreed to register a new series
of notes (the "Exchange Notes") and related Subsidiary Guarantees (the "Exchange
Guarantees," and together with the Exchange Notes, the "Exchange Securities")
under the Act subject to the terms and conditions therein specified. Pursuant to
the Registration Rights Agreement, the Exchange Securities will be offered in
exchange for the Securities (the "Registered Exchange Offer"). To the extent
there are no additional parties listed on Schedule I other than you, the term
Representatives as used herein shall mean you as the Initial Purchasers, and the
terms Representatives and Initial Purchasers shall mean either the singular or
plural as the context requires. The use of the neuter in this Agreement shall
include the feminine and masculine wherever appropriate. Certain terms used
herein are defined in Section 17 hereof.
In connection with the offering of the Securities, the Company
and the Subsidiary Guarantors will enter into a second amended and restated
credit agreement (the "Credit Agreement Amendment") that amends and restates
that certain Credit Agreement, dated as of
December 17, 2001, among Aviall Services, Inc., the Company, the lenders and
issuers party thereto and Citicorp USA, Inc., as amended (the "Credit
Agreement").
The sale of the Securities to the Initial Purchasers will be
made without registration of the Securities under the Act in reliance upon
exemptions from the registration requirements of the Act.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated June 12, 2003 (as amended or
supplemented at the Execution Time, including any and all exhibits thereto and
material incorporated by reference therein, the "Preliminary Memorandum"), and a
final offering memorandum, dated the date hereof (as amended or supplemented at
the Execution Time, including any and all exhibits thereto and material
incorporated by reference therein, the "Final Memorandum"). Each of the
Preliminary Memorandum and the Final Memorandum sets forth certain information
concerning the Company and the Securities. The Company hereby confirms that it
has authorized the use of the Preliminary Memorandum and the Final Memorandum,
and any amendment or supplement thereto, in connection with the offer and sale
of the Securities by the Initial Purchasers.
1. Representations and Warranties. Each of the Company
and each Subsidiary Guarantor, jointly and severally, represents and warrants to
each Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date
thereof, did not contain 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. At the Execution Time and on the Closing Date, the
Final Memorandum did not, and will not (and any amendment or supplement
thereto, at the date thereof and on the Closing Date, will not),
contain 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; provided,
however, that the Company and the Subsidiary Guarantors make no
representation or warranty as to the information contained in or
omitted from the Preliminary Memorandum or the Final Memorandum, or any
amendment or supplement thereto, in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of
the Initial Purchasers through the Representatives specifically for
inclusion therein.
(b) During the six-month period prior to the
date here, none of the Company, the Subsidiary Guarantors, nor any of
its or their Affiliates, nor any person acting on its or their behalf
has, directly or indirectly, made offers or sales of any Securities, or
solicited offers to buy any Securities, or, in either case, any
security of the same class or series as the Securities, under
circumstances that would require the registration of the Securities
under the Act; provided that the Company and the Subsidiary Guarantors
make no representation or warranty with respect to any actions
undertaken by the Representatives, the Initial Purchasers, their
Affiliates or anyone acting on their behalf.
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(c) None of the Company, the Subsidiary
Guarantors, nor any of its or their Affiliates, nor any person acting
on its or their behalf has engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities in the United
States; provided that the Company and the Subsidiary Guarantors make no
representation or warranty with respect to any actions undertaken by
the Representatives, the Initial Purchasers, their Affiliates or anyone
acting on their behalf. The parties hereto acknowledge that any press
release that complies with Rule 135(c) under the Securities Act does
not constitute a general solicitation within the meaning of Regulation
D.
(d) The Securities satisfy the eligibility
requirements of Rule 144A(d)(3) under the Act.
(e) None of the Company, the Subsidiary
Guarantors, nor any of its or their Affiliates, nor any person acting
on its or their behalf has engaged in any directed selling efforts with
respect to the Securities, and each of them has complied with the
offering restrictions requirement of Regulation S; provided that the
Company and the Subsidiary Guarantors make no representation or
warranty with respect to any actions undertaken by the Representatives,
the Initial Purchasers, their Affiliates or anyone acting on their
behalf. Terms used in this paragraph and not otherwise defined in this
Agreement have the meanings given to them by Regulation S.
(f) As of the Closing Date, the Company has been
advised by the NASD's PORTAL Market that the Notes and Exchange Notes
have been designated PORTAL-eligible securities in accordance with the
rules and regulations of the NASD.
(g) 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 Final Memorandum will not be, an
"investment company" within the meaning of the Investment Company Act,
without taking account of any exemption arising out of the number of
holders of the Company's securities.
(h) The Company is subject to and in compliance
with the reporting requirements of Section 13 or Section 15(d) of the
Exchange Act in all material respects.
(i) None of the Company, the Subsidiary
Guarantors or any of its or their Affiliates, nor any person acting on
its or their behalf has paid or agreed to pay to any person any
compensation for soliciting another to purchase any Securities of the
Company (except as contemplated by this Agreement); provided that the
Company and the Subsidiary Guarantors make no representation or
warranty with respect to any actions undertaken by the Representatives,
the Initial Purchasers, their Affiliates or anyone acting on their
behalf.
(j) None of the Company, the Subsidiary
Guarantors or any of its or their Affiliates, nor any person acting on
its or their behalf has taken, directly or indirectly, any action
designed to cause or result in, or which has constituted, the
stabilization or manipulation of the price of any security of the
Company to facilitate the
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sale or resale of the Securities in violation of applicable securities
laws; provided that the Company and the Subsidiary Guarantors make no
representation or warranty with respect to any actions undertaken by
the Representatives, the Initial Purchasers, their Affiliates or anyone
acting on their behalf.
(k) Each of the Company and its Subsidiaries has
been duly incorporated or organized and is validly existing as a
corporation or limited liability company in good standing under the
laws of the jurisdiction in which it is incorporated or organized with
full corporate or limited liability company 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 Final Memorandum, and is duly
qualified to do business as a foreign corporation, limited liability
company or partnership and is in good standing under the laws of each
jurisdiction that requires such qualification; except where the failure
to be in good standing or duly qualified (i) could not reasonably be
expected to have a material adverse effect on the performance of this
Agreement, the Indenture, the Securities, the Registration Rights
Agreement or the Credit Agreement Amendment, or the consummation of any
of the transactions contemplated hereby or thereby; or (ii) could not
reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business (the occurrence of the events described in clause (ii) being
referred to herein as a "Material Adverse Effect").
(l) All the outstanding shares of Capital Stock
of each Subsidiary Guarantor have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as otherwise
set forth in the Final Memorandum, all outstanding shares of Capital
Stock of the Subsidiary Guarantors are owned by the Company either
directly or through wholly owned Subsidiary Guarantors free and clear
of any perfected security interest or any other security interests,
claims, liens or encumbrances, other than under the Credit Agreement.
(m) The statements contained in the Final
Memorandum under the captions "Business--Regulation," "Business--Aviall
Services--Significant Parts Contracts," "Risk Factors--Risks Relating
to our Business--If our principal suppliers terminate or limit their
relationships with us, our net sales could decline substantially and
our business could otherwise be adversely affected," "Risk
Factors--Risks Relating to our Business--If our FAA repair authority is
revoked or limited, we could incur significant costs and our growth
could be hindered," "Risk Factors--Risks Relating to our Business--We
could incur significant costs and expenses related to environmental
problems" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Environmental Matters," insofar as
such statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries of such
legal matters, agreements, documents or proceedings.
(n) This Agreement has been duly authorized,
executed and delivered by the Company and each of the Subsidiary
Guarantors.
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(o) The Indenture has been duly authorized and,
assuming due authorization, execution and delivery thereof by the
Trustee, when executed and delivered by the Company and each of the
Subsidiary Guarantors, will constitute a legal, valid, binding
instrument enforceable against the Company and each of the Subsidiary
Guarantors in accordance with its terms (subject, as to the enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance, preference or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity).
(p) The issuance of the Notes by the Company and
the issuance by each Subsidiary Guarantor of its respective Subsidiary
Guarantee has been duly and validly authorized and, when the Company
has, and the Subsidiary Guarantors have, duly executed each global
certificate representing the Securities and such Securities have been
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers under this
Agreement, the Notes will constitute legal, valid, binding and
enforceable obligations of the Company and the respective Subsidiary
Guarantee of each Subsidiary Guarantor will constitute its legal,
valid, binding and enforceable obligation, in each case entitled to the
benefits of the Indenture (subject, as to the enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency, moratorium,
fraudulent conveyance, preference or other laws affecting creditors'
rights generally from time to time in effect and to general principles
of equity).
(q) The issuance of the Exchange Notes by the
Company and the issuance by each Subsidiary Guarantor of its respective
Exchange Guarantee has been duly and validly authorized and, when the
Company has, and the Subsidiary Guarantors have, duly executed each
global certificate representing the Exchange Securities and such
Exchange Securities have been authenticated, in accordance with the
provisions of the Indenture and delivered to the holders of Securities
in exchange therefor as contemplated by the Registration Rights
Agreements, the Exchange Notes will constitute legal, valid, binding
and enforceable obligations of the Company and the respective
Subsidiary Guarantee of each Subsidiary Guarantor will constitute its
legal, valid, binding and enforceable obligation, in each case entitled
to the benefits of the Indenture (subject to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance,
preference or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity, regardless
of whether enforcement is sought in a proceeding at law or in equity).
(r) The Registration Rights Agreement has been
duly authorized and, assuming due authorization, execution and delivery
thereof by the Initial Purchasers, when executed and delivered by the
Company and each of the Subsidiary Guarantors, will constitute a legal,
valid, binding and enforceable instrument (except as to rights of
indemnity and contribution which maybe limited by applicable law) of
the Company and each of the Subsidiary Guarantors (subject, as to the
enforcement of remedies, to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, preference or other
laws affecting creditors' rights generally from time to time in effect
and to general principles of equity).
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(s) The Credit Agreement Amendment has been duly
authorized and, assuming due authorization, execution and delivery
thereof by the other parties thereto, when executed and delivered by
the Company and each of the Subsidiary Guarantors, will constitute a
legal, valid, binding and enforceable instrument of the Company and
each of the Subsidiary Guarantors (subject, as to the enforcement of
remedies, to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, preference or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity).
(t) Each of the Company and the Subsidiary
Guarantors has all requisite corporate, limited liability company or
partnership power and authority, has taken all requisite corporate,
limited liability company or partnership action necessary to enter into
and perform this Agreement, the Indenture, the Securities, the
Registration Rights Agreement and the Credit Agreement Amendment.
(u) Subject to compliance by the Initial
Purchasers with the representations, warranties and covenants set forth
in Section 4 hereof, 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 or in the
Indenture, the Registration Rights Agreement or the Credit Agreement
Amendment, except such as will be obtained under the Act and the Trust
Indenture Act with respect to the Exchange Securities 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 Initial
Purchasers in the manner contemplated herein and in the Final
Memorandum and the Registration Rights Agreement.
(v) Subject to compliance by the Initial
Purchasers with the representations, warranties and covenants set forth
in Section 4 hereof and assuming the effectiveness of the Credit
Agreement Amendment, neither the execution and delivery of this
Agreement, the Indenture, the Registration Rights Agreement or the
Credit Agreement Amendment, the issue and sale of the Securities and
the Exchange Securities, nor the consummation of any other of the
transactions herein or therein contemplated, nor the fulfillment of the
terms hereof or thereof 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 its Subsidiaries pursuant
to, (i) the certificate of incorporation, by-laws or other
organizational documents of the Company or any of its Subsidiaries;
(ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement or instrument
to which the Company or any of its 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 applicable to the Company
or any of its Subsidiaries of any court, governmental body or agency,
including, without limitation, the Federal Aviation Administration, or
arbitrator having jurisdiction over the Company or any of its
Subsidiaries or any of its or their properties; except, in the case of
clauses (ii) and (iii), as (A) could not reasonably be expected to have
a material adverse effect on the performance of this Agreement, the
Indenture, the Securities, the Registration Rights Agreement or the
Credit Agreement Amendment, or the
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consummation of any of the transactions contemplated hereby or thereby,
or (B) would not result in a Material Adverse Effect.
(w) The consolidated historical financial
statements and schedules of the Company and its consolidated
Subsidiaries included in the Final Memorandum 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 (except as otherwise noted therein);
the selected financial data set forth under the caption "Selected
Consolidated Financial Data" in the Final Memorandum fairly present, on
the basis stated in the Final Memorandum, in all material respects the
information included therein.
(x) 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 its Subsidiaries or its or their
directors, officers or property is pending or, to the knowledge of the
Company's executive officers, threatened that could reasonably be
expected to have (i) a material adverse effect on the performance of
this Agreement, the Indenture, the Securities, the Registration Rights
Agreement or the Credit Agreement Amendment, or the consummation of any
of the transactions contemplated hereby or thereby; or (ii) a Material
Adverse Effect, except in each case as set forth in or contemplated in
the Final Memorandum.
(y) The Company and each of its Subsidiaries
owns or leases all such properties as are necessary to the conduct of
its operations as presently conducted, except where the failure to own
or lease such properties would not result in a Material Adverse Effect.
(z) Neither the Company nor any of its
Subsidiaries is in violation or default of (i) any provision of its
certificate of incorporation, bylaws or other organizational documents;
(ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to
which its property is subject; or (iii) subject to compliance by the
Initial Purchasers of the representations, warranties and covenants set
forth in Section 4 hereof, any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its
Subsidiaries of any court, governmental body or agency, including
without limitation, the Federal Aviation Administration, or arbitrator
having jurisdiction over the Company or such Subsidiary or any of its
properties, as applicable, except, in the case of clause (ii) or (iii)
only, such violation or default as (A) could not reasonably be expected
to have a material adverse effect on the performance of this Agreement,
the Indenture, the Securities, the Registration Rights Agreement or the
Credit Agreement Amendment, or the consummation of any of the
transactions contemplated hereby or thereby, or (B) could not
reasonably be expected to have a Material Adverse Effect.
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(aa) PricewaterhouseCoopers, LLP, who have
certified certain financial statements of the Company and its
consolidated Subsidiaries and delivered their report with respect to
the audited consolidated financial statements (including the notes
thereto) and schedules included in the Final Memorandum, are to the
knowledge of the Company's executive officers independent public
accountants with respect to the Company within the meaning of the Act
and the applicable published rules and regulations thereunder.
(bb) There are no stamp or other issuance or
transfer taxes or duties or other similar fees (other than the
registration fee under the Act) or charges required to be paid in
connection with the execution, delivery and performance of this
Agreement or the Indenture by the Company or the Subsidiary Guarantors
or the issuance or sale by the Company or the Subsidiary Guarantors of
the Securities or the Exchange Securities.
(cc) The Company has filed all foreign, federal,
state and local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the failure
so to file would not have a Material Adverse Effect, and has paid all
taxes required to be paid by it and any other assessment, fine or
penalty levied against it, 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.
(dd) No labor problem or dispute with the
employees of the Company or any of its Subsidiaries exists or, to the
knowledge of the Company, is threatened or imminent, and the Company is
not aware of any existing or imminent labor disturbance by the
employees of Rolls-Royce Corporation or Honeywell International Inc.,
that, in either case, could reasonably be expected to have a Material
Adverse Effect.
(ee) Since the date of the most recent financial
statements included in the Final Memorandum, there has been no material
adverse change in the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its Subsidiaries,
taken as a whole, whether or not arising from transactions in the
ordinary course of business.
(ff) The Company and each of its Subsidiaries are
insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in
the businesses in which they are engaged; the Company and its
Subsidiaries are in compliance with the terms of such policies and
instruments in all material respects and there are no claims by the
Company or any of its Subsidiaries under any such policy or instrument
as to which any insurance company has notified the Company or any of
its Subsidiaries that it is denying or intends to deny liability or to
defend under a reservation of rights clause, except as would not have a
Material Adverse Effect; 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.
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(gg) No Subsidiary Guarantor of the Company is
currently prohibited, directly or indirectly, from paying any dividends
to the Company, from making any other distribution on such Subsidiary
Guarantor's Capital Stock, from repaying to the Company any loans or
advances to such Subsidiary Guarantor from the Company or from
transferring any of such Subsidiary's property or assets to the Company
or any other Subsidiary Guarantor of the Company, except under the
Credit Agreement or as described in or contemplated by the Final
Memorandum.
(hh) The Company and its 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, except where the failure to
possess such licenses, certificates, permits or other authorizations
would not have a Material Adverse Effect, 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, (i) would have a material
adverse effect on the performance of this Agreement, the Indenture, the
Securities, the Registration Rights Agreement or the Credit Agreement
Amendment, or the consummation of any of the transactions contemplated
hereby or thereby, or (ii) would have a Material Adverse Effect.
(ii) The Company and its Subsidiaries on a
consolidated basis 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, in the case of each of clauses (i) through (iv) in all
material respects.
(jj) The Company and its Subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"); (ii) have received
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 (x) 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, or (y) as set forth in or
contemplated in the Final Memorandum; and, except as set forth in the
Final Memorandum or as would not result in a Material Adverse Effect,
neither the Company nor any of the Subsidiaries has been named as a
"potentially responsible party" under the
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Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended.
(kk) Each of the Company and its Subsidiaries has
fulfilled its obligations, if any, under the minimum funding standards
of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security
Act of 1974, as amended ("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 its 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 its
Subsidiaries have not incurred any material 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.
(ll) None of the Company nor any of its
Subsidiaries (each on a consolidated basis) is, nor will any of the
Company or any of its Subsidiaries (each on a consolidated basis) be
after giving effect to the execution, delivery and performance of this
Agreement, the Indenture, the Securities, the Registration Rights
Agreement and the Credit Agreement Amendment and the consummation of
any other of the transactions herein or therein contemplated, (A)
unable to pay its debts (contingent or otherwise) as they mature or (B)
otherwise insolvent.
(mm) Each of the relationships and transactions
specified in Item 404 of Regulation S-K that would have been required
to be described in a prospectus if the offer and sale of the Securities
had been registered under the Act have been so described in all
material respects in the Final Memorandum.
(nn) The Subsidiary Guarantors signatory hereto
constitute all of the Company's direct or indirect domestic
Subsidiaries. The agreements listed on Schedule II hereto are the only
material agreements of the Company and its Subsidiaries, taken as a
whole.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Initial Purchasers in
connection with the closing of the offering of the Securities shall be deemed a
representation and warranty by the Company, as to matters covered thereby, to
each Initial Purchaser.
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 Initial Purchaser, and each Initial
Purchaser agrees, severally and not jointly, to purchase from the Company, at a
purchase price of 97.0% of the principal amount thereof, plus accrued interest,
if any, from June 30, 2003 to the Closing Date, the principal amount of
Securities set forth opposite such Initial Purchaser's name in Schedule I
hereto.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 A.M., New York City time, on June 30, 2003, or
at such time on such later date
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(not later than July 7, 2003) as the Representatives and the Company 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"). The Securities shall be delivered in such names, forms and
amounts as the Representatives shall specify and shall be made to the
Representatives for the respective accounts of the several Initial Purchasers
against payment by the several Initial Purchasers through the Representatives of
the purchase price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to the accounts and in the names 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. Representations, Warranties and Covenants of the
Initial Purchasers. Each Initial Purchaser, severally and not jointly,
represents and warrants to and agrees with the Company and the Subsidiary
Guarantors that:
(a) It has not offered or sold, and will not
offer or sell, any Securities except (i) to those persons it reasonably
believes to be qualified institutional buyers (as defined in Rule 144A
under the Act) and that, in connection with each such sale, it has
taken or will take reasonable steps to ensure that the purchaser of
such Securities is aware that such sale is being made in reliance on
Rule 144A; or (ii) in accordance with the restrictions set forth in
Exhibit A hereto.
(b) Neither it nor any person acting on its
behalf has made or will make offers or sales of the Securities in the
United States by means of any form of general solicitation or general
advertising (within the meaning of Regulation D) in the United States.
(c) It is an "accredited investor" within the
meaning of Rule 501(a) under the Act.
5. Agreements. Each of the Company and each Subsidiary
Guarantor agrees, jointly and severally, with each Initial Purchaser that:
(a) The Company will furnish to each Initial
Purchaser and to counsel for the Initial Purchasers, without charge,
during the period referred to in paragraph (c) below, as many copies of
the Final Memorandum and any amendments and supplements thereto as they
may reasonably request.
(b) The Company will not amend or supplement the
Final Memorandum without the prior written consent of the
Representatives, which consent will not be unreasonably withheld or
delayed.
(c) If at any time prior to the completion of
the sale of the Securities by the Initial Purchasers (as determined by
the Representatives), any event occurs as a result of which the Final
Memorandum, as then amended or 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
should be necessary to amend or supplement the Final
11
Memorandum to comply with applicable law, the Company promptly (i) will
notify the Representatives of any such event; (ii) subject to the
requirements of paragraph (b) of this Section 5, will prepare an
amendment or supplement that will correct such statement or omission or
effect such compliance; and (iii) will supply any supplemented or
amended Final Memorandum to the several Initial Purchasers and counsel
for the Initial Purchasers without charge in such quantities as they
may reasonably request.
(d) The Company will, if necessary, cooperate
with the Representatives in connection with the qualification of the
Securities for sale by the Initial Purchasers under the laws of such
jurisdictions as the Initial Purchasers may designate and will maintain
such qualifications in effect so long as required for the sale of the
Securities; provided that in no event shall the Company or any
Subsidiary 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. The Company will promptly advise the
Representatives 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 initiation or threatening of any
proceeding for such purpose.
(e) None of the Company, the Subsidiary
Guarantors, nor any of its or their Affiliates, nor any person acting
on its or their behalf will, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Securities
under the Act; provided that the Company and the Subsidiary Guarantors
make no covenant with respect to any actions undertaken by the
Representatives, the Initial Purchasers, their Affiliates or anyone
acting on their behalf.
(f) None of the Company, the Subsidiary
Guarantors nor any of its or their Affiliates, nor any person acting on
its or their behalf will engage in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection
with any offer or sale of the Securities in the United States; provided
that the Company and the Subsidiary Guarantors make no covenant with
respect to any actions undertaken by the Representatives, the Initial
Purchasers, their Affiliates or anyone acting on their behalf.
(g) So long as any of the Securities are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Act, the Company will, during any period in which it is not subject to
and in compliance with Section 13 or 15(d) of the Exchange Act or it is
not exempt from such reporting requirements pursuant to and in
compliance with Rule 12g3-2(b) under the Exchange Act, provide to each
holder of such restricted securities and to each prospective purchaser
(as designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser, any information
required to be provided by Rule 144A(d)(4) under the Act. This covenant
is intended to be for the benefit of the holders, and the prospective
purchasers designated by such holders, from time to time of such
restricted securities.
12
(h) None of the Company, the Subsidiary
Guarantors nor any of its or their Affiliates, nor any person acting on
its or their behalf will engage in any directed selling efforts with
respect to the Securities, and each of them will comply with the
offering restrictions requirement of Regulation S; provided that the
Company and the Subsidiary Guarantors make no covenant with respect to
any actions undertaken by the Representatives, the Initial Purchasers,
their Affiliates or anyone acting on their behalf. Terms used in this
paragraph have the meanings given to them by Regulation S.
(i) The Company will cooperate with the
Representatives and use its reasonable best efforts to permit the
Securities and the Exchange Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(j) None of the Company nor the Subsidiary
Guarantors will, for a period of 90 days following the Execution Time,
without the prior written consent of Citigroup, offer, sell or contract
to sell, or otherwise dispose of (or enter into any transaction that is
designed to, or might reasonably be expected to, result in the
disposition by the Company or any Subsidiary Guarantor), directly or
indirectly, or announce the offering of, any debt securities issued or
guaranteed by the Company (other than the Securities) or the Exchange
Securities.
(k) None of the Company, the Subsidiary
Guarantors nor any of its or their Affiliates will take, directly or
indirectly, any action designed to cause or result in, or which has
constituted, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities in
violation of applicable securities laws; provided that the Company and
the Subsidiary Guarantors make no covenant with respect to any actions
undertaken by the Representatives, the Initial Purchasers, their
Affiliates or anyone acting on their behalf.
(l) The Company will apply the net proceeds from
the sale of the Securities as set forth under the heading "Use of
Proceeds" in the Final Memorandum.
(m) The Company agrees to pay the costs and
expenses relating to the following matters: (i) the preparation of the
Indenture and the Registration Rights Agreement, the issuance of the
Securities and the Exchange Securities and the fees of the Trustee;
(ii) the preparation, printing or reproduction of the Preliminary
Memorandum and Final Memorandum and each amendment or supplement to
either of them; (iii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and
packaging) of such copies of the Preliminary Memorandum and Final
Memorandum, and all amendments or supplements to either of them, as
may, in each case, be reasonably requested for use in connection with
the offering and sale of the Securities; (iv) the preparation,
printing, authentication, issuance and delivery of certificates for the
Securities, including any stamp or transfer taxes in connection with
the original issuance and sale of the Securities; (v) any blue sky
memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the
Securities and the Exchange Securities; (vi) any registration or
qualification of the Securities for offer and sale under the securities
or blue sky laws of the several states (including filing fees and the
reasonable fees and expenses of counsel
13
for the Initial Purchasers relating to such registration and
qualification); (vii) admitting the Notes and Exchange Notes for
trading in the PORTAL Market; (viii) the transportation and other
expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the
Securities; (ix) the fees and expenses of the Company's accountants and
the fees and expenses of counsel (including local and special counsel)
for the Company; and (x) all other costs and expenses incident to the
performance by the Company of its obligations hereunder; provided, that
the Company shall not be required to pay the expenses of the Initial
Purchasers except as provided in Section 7.
6. Conditions to the Obligations of the Initial
Purchasers. The obligations of the Initial Purchasers 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 at the
Execution Time and the Closing Date pursuant to Section 3 hereof, to the
accuracy of the statements of the Company made in any certificates delivered
pursuant to the provisions hereof, to the performance by the Company and the
Subsidiary Guarantors of its and their obligations hereunder and to the
following additional conditions:
(a) The Company shall have requested and caused
Xxxxxx and Xxxxx LLP, counsel for the Company and the Subsidiary
Guarantors (except with respect to opinion (a)(ix) below, which shall
be provided by Xxxx Xxxxxx, Esq., counsel to the Company), to furnish
to the Representatives its opinion, dated the Closing Date and
addressed to the Representatives, to the effect that:
(i) each of the Company and each of
Aviall Services, Inc., Aviall Product Repair Services, Inc.
and Inventory Locator Service, LLC (each a "Material
Guarantor") is a corporation or limited liability company
validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated or organized, with
the requisite corporate or limited liability company 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
Final Memorandum. Each of the Company, Aviall Services, Inc,
and Inventory Locator Service, LLC is duly qualified to do
business as a foreign corporation or limited liability company
and is in good standing under the laws of the State of Texas;
(ii) all outstanding shares of Capital
Stock of the Material Guarantors are owned by the Company
either directly or through wholly owned Subsidiaries free and
clear of any perfected security interest, other than under the
Credit Agreement;
(iii) the statements in the Final
Memorandum under the headings "Description of Notes,"
"Exchange Offer; Registration Rights," "Certain U.S. Federal
Income Tax Consequences," "Notice to Investors" and
"Description of Certain Indebtedness" insofar as such
statements constitute a summary of the legal matters of
documents referred to therein, fairly present in all material
respects such legal matters and documents;
14
(iv) this Agreement has been duly
authorized, executed and delivered by the Company and the
Material Guarantors;
(v) the Indenture has been duly
authorized, executed and delivered by the Company and the
Subsidiary Guarantors, and assuming due authorization,
execution and delivery by the Trustee, constitutes a legal,
valid and binding agreement enforceable against the Company
and each of the Subsidiary Guarantors in accordance with its
terms;
(vi) the issuance of the Securities has
been duly and validly authorized by the Company and the
Material Guarantors and, when the Company and the Material
Guarantors have duly executed each global certificate
representing the Securities and such certificates representing
the Securities have been authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Initial Purchasers under this Agreement, such Securities
will constitute legal, valid, binding and enforceable
obligations of the Company and the Material Guarantors
entitled to the benefits of the Indenture;
(vii) the issuance of the Exchange
Securities has been duly and validly authorized by the Company
and the Material Guarantors and, when the Company and the
Material Guarantors have duly executed each global certificate
representing the Exchange Securities and such certificates
representing the Exchange Securities have been duly
authenticated and executed by the Trustee, in accordance with
the provisions of the Indenture and delivered to the holders
of Notes in exchange therefor as contemplated by the
Registration Rights Agreement and the Indenture, such Exchange
Securities will constitute legal, valid, binding and
enforceable obligations of the Company and the Material
Guarantors entitled to the benefits of the Indenture;
(viii) the Registration Rights Agreement
has been duly authorized, executed and delivered by the
Company and the Material Guarantors, and assuming due
authorization, executions and delivery by the Representatives,
constitutes a legal, valid, binding and enforceable agreement
of the Company and the Material Guarantors, except that rights
to indemnity and contribution thereunder may be so limited by
applicable law;
(ix) to the knowledge of such counsel,
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
Subsidiary Guarantors or its or their officers, directors or
property of a character required to be disclosed in a
registration statement on Form S-1 that is not that is not
adequately disclosed in the Final Memorandum, except in each
case for such proceedings that, if the subject of an
unfavorable decision, ruling or finding would not singly or in
the aggregate, result in a Material Adverse Effect;
(x) each of the Company and the
Material Guarantors has the requisite corporate or limited
liability company power and authority, and has
15
taken the requisite corporate or limited liability company
action, as is necessary to enter into and perform their
respective obligations under this Agreement, the Indenture,
the Securities, the Exchange Securities and the Registration
Rights Agreement;
(xi) no consent, approval, authorization
or order of or registration or qualification with any Federal
governmental agency or body is currently required for the
performance by the Company and the Material Guarantors of
their respective obligations under this Agreement, the
Indenture, the Securities, the Exchange Securities and the
Registration Rights Agreement, except such consents,
approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws or,
with respect to the Registration Rights Agreement and the
Exchange Securities, under federal or state securities laws or
the Trust Indenture Act;
(xii) neither the execution and delivery
of the Indenture, this Agreement, the Registration Rights
Agreement or the Credit Agreement Amendment, the issue and
sale of the Securities, nor the consummation of any other of
the transactions herein or therein contemplated, nor the
compliance with the terms hereof or thereof will conflict
with, result in a breach or violation of (i) the certificate
of incorporation, by-laws or other organizational documents of
the Company or any Material Guarantor; (ii) the terms of any
agreement listed on Schedule II to this Agreement ; or (iii)
any statute, law, rule, regulation, judgment, order or decree
applicable to the Company or any Material Guarantor of any
court, governmental body, agency or arbitrator having
jurisdiction over the Company, any Material Guarantors or any
of its or their properties, provided, that for purposes of
clause (iii) only, such opinion is limited to the Federal laws
of the United States, the laws of States of New York and Texas
and the General Corporation Law and Limited Liability Company
Act of the State of Delaware;
(xiii) assuming the accuracy of the
representations and warranties, and compliance with the
agreements and covenants, contained herein and in the
Indenture, and the accuracy of the statements in the Final
Memorandum under the caption "Plan of Distribution," it is not
necessary, in connection with the offer, sale and delivery of
the Securities to and by the Initial Purchasers under this
Agreement, to register the Securities under the Securities
Act, or to qualify an indenture under the Trust Indenture Act;
and
(xiv) 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
Final Memorandum, will not be an "investment company" as
defined in the Investment Company Act.
Such opinion also shall contain language to the effect that
although such counsel have not undertaken, except with respect to the matters
set forth in, but only to the extent provided, in paragraph (iii) above, to
determine independently, and do not assume any responsibility for, the accuracy
or completeness of the statements in the Final Memorandum,
16
they have participated in the preparation of the Final Memorandum, including
review and discussion of the contents thereof, and nothing has come to their
attention that has caused them to believe that the Final Memorandum as of its
date or as of the Closing Date, in each case including documents incorporated by
reference therein, 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, in the light of the circumstances under
which they were made. Notwithstanding the foregoing, such counsel need not
express any belief with respect to (i) the financial statements and the notes
and schedules thereto, (ii) any financial, statistical or industry data
contained in or incorporated by reference in the Final Memorandum or (iii) the
information provided by the Representatives or the Initial Purchasers for
inclusion in the Final Memorandum, as set forth in Section 8(b).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
jurisdiction of incorporation of the Company and the Subsidiary Guarantors, the
State of New York 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, who are satisfactory to counsel
for the Initial Purchasers and upon whom the Initial Purchasers can rely; and
(B) as to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. References to the
Final Memorandum in this Section 6(a) include any amendment or supplement
thereto at the Closing Date.
(b) The Representatives shall have received from
Weil, Gotshal & Xxxxxx LLP, counsel for the Initial Purchasers, 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 Rights Agreement, the Final
Memorandum (as amended or supplemented at the Closing Date) 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.
(c) The Company and each Subsidiary Guarantor
shall have furnished to the Representatives a certificate of the
Company and each Subsidiary Guarantor, signed by the principal
financial or accounting officer and a senior vice president of the
Company and each Subsidiary Guarantor, dated the Closing Date, to the
effect that the signers of such certificate have reviewed the Final
Memorandum, any amendment or supplement to the Final Memorandum and
this Agreement and that to the knowledge of such signers after
reasonable investigation, the representations and warranties of the
Company and the Subsidiary Guarantors in this Agreement are true and
correct 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
its or their part to be performed or satisfied hereunder at or prior to
the Closing Date.
(d) At the Execution Time and at the Closing
Date, the Company shall have requested and caused
PricewaterhouseCoopers, LLP to furnish to the Representatives letters,
dated respectively as of the Execution Time and as of the Closing
17
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, that they have
performed a review of the unaudited interim financial information of
the Company for the three-month period ended March 31, 2003 and as at
March 31, 2003 in accordance with the Statement on Auditing Standards
No. 100, and stating in effect that:
(i) in their opinion the audited
financial statements and financial statement schedules
included in the Final Memorandum and reported on by them
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the related
rules and regulations adopted by the Commission thereunder;
(ii) on the basis of a reading of the
latest unaudited financial statements made available by the
Company and its Subsidiaries; their limited review in
accordance with the standards established under Statement on
Auditing Standards No. 100, of the unaudited interim financial
information for the three-month period ended March 31, 2003,
and as at March 31, 2003, as indicated in their report
included in the Final Memorandum; carrying out certain
specified procedures (but not an examination in accordance
with generally accepted auditing standards) that 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 audit
committees of the Company and the Subsidiaries; and inquiries
of certain members of management of the Company who have
responsibility for financial and accounting matters of the
Company and its Subsidiaries as to transactions and events
subsequent to March 31, 2003, nothing came to their attention
that caused them to believe that:
(1) any unaudited interim
financial statements included in the Final Memorandum
do not comply in form in all material respects with
applicable accounting requirements and with the
related rules and regulations of the Commission with
respect to financial statements included 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 consistent with that of the audited
financial statements included in the Final
Memorandum; or
(2) with respect to the period
subsequent to March 31, 2003, there were any changes,
at a specified date not more than five days prior to
the date of the letter, in the long-term debt of the
Company and its Subsidiaries or Capital Stock of the
Company or decreases in the shareholders' equity of
the Company as compared with the amounts shown on the
March 31, 2003 consolidated balance sheet included in
the Final Memorandum, or for the period from April 1,
2003 to such specified date there were any decreases,
as compared with the corresponding period in the
preceding year in net earnings from continuing
operations before income taxes or in total or per
share amounts of net earnings of the
18
Company and its 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; or
(3) the information included
under the heading "Selected Consolidated Financial
Data" is not in conformity with the disclosure
requirements of Regulation S-K; and
(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 its Subsidiaries) set forth in the
Final Memorandum, including the information set forth under
the captions "Selected Consolidated Financial Data" and
"Summary Historical Consolidated Financial Data" in the Final
Memorandum, agrees with the accounting records of the Company
and its Subsidiaries, excluding any questions of legal
interpretation.
References to the Final Memorandum in this Section 6(e)
include any amendment or supplement thereto at the date of the
applicable letter.
(e) Subsequent to the Execution Time or, if earlier the
dates as of which information is given in the Final Memorandum
(provided that such date shall be no earlier than March 31, 2003),
there shall not have occurred (except as contemplated in the Final
Memorandum) (i) any change or decrease specified in the letter or
letters referred to in paragraph (d) of this Section 6; or (ii) any
change, or any development involving a prospective change in the
condition (financial or otherwise) prospects, business, properties or
results of operations of the Company and its Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business, the effect of which, in any case referred to in clause (i)
or (ii) above, is, in the judgment of the Representatives, so material
and adverse as to make it impractical or inadvisable to proceed with
the completion of the offer and sale of the Securities as contemplated
by the Final Memorandum.
(f) The Notes shall have been designated as
PORTAL-eligible securities in accordance with the rules and regulations
of the NASD, and the Notes shall be eligible for clearance and
settlement through The Depository Trust Company.
(g) Subsequent to the Execution Time, there shall not
have been any decrease in the rating of any of the Company's debt
securities (including the Notes) by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Act) or any notice given to the Company or publicly of
any surveillance or review for an 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.
19
(h) The Company and the Subsidiary Guarantors shall have
entered into the Credit Agreement Amendment, and there shall not exist
at and as of the Closing Date any conditions that would constitute a
default (or an event that with notice or the lapse of time, or both,
would constitute a default) under the Credit Agreement.
(i) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further material information,
certificates and documents as the Representatives may reasonably
request.
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 Initial Purchasers,
this Agreement and all obligations of the Initial Purchasers hereunder may be
cancelled 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 Initial Purchasers, at 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing Date.
The Representatives may in their sole discretion waive on
behalf of the Initial Purchasers compliance with any of the conditions to the
obligations of the Initial Purchasers under this Agreement.
7. Reimbursement of Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Initial Purchasers set forth in Section 6 hereof (other than
Section 6(b)) 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 or any Subsidiary Guarantor to perform any agreement herein or comply
with any provision hereof other than by reason of a breach or default by any of
the Initial Purchasers, the Company will reimburse the Initial Purchasers
severally through Citigroup on demand for all reasonable 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 each of the Subsidiary
Guarantors, jointly and severally, agrees to indemnify and hold
harmless each Initial Purchaser, the directors, officers, employees and
agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of Section 15 of the Exchange Act
against any 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 Preliminary
20
Memorandum or the Final Memorandum (or in any supplement or amendment
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, in the light of the
circumstances under which they were made, 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 in the Preliminary Memorandum or the Final
Memorandum, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Initial Purchasers through the
Representatives specifically for inclusion therein. This indemnity
agreement will be in addition to any liability that the Company and the
Subsidiary Guarantors may otherwise have.
(b) Each Initial Purchaser severally and not
jointly agrees to indemnify and hold harmless the Company, the
Subsidiary Guarantors, each of its or their directors, each of its or
their officers, and each person who controls the Company or any
Subsidiary Guarantor within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the
Company and the Subsidiary Guarantors to each Initial Purchaser, but
only with reference to written information relating to such Initial
Purchaser furnished to the Company and the Subsidiary Guarantors by or
on behalf of such Initial Purchaser through the Representatives
specifically for inclusion in the Preliminary Memorandum or the Final
Memorandum (or in any amendment or supplement thereto) 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. This indemnity agreement will be in addition to any liability
that any Initial Purchaser may otherwise have. The parties hereto
acknowledge that the statements set forth in the last paragraph of the
cover page regarding the delivery of the Securities, and, under the
heading "Plan of Distribution," (i) the sentences related to
concessions and reallowances; (ii) the list of Initial Purchasers; and
(iii) the paragraph related to over-allotment, covering and
stabilization transactions in the Preliminary Memorandum and the Final
Memorandum, constitute the only information furnished in writing by or
on behalf of the Initial Purchasers for inclusion in the Preliminary
Memorandum or the Final Memorandum (or in any amendment or supplement
thereto).
(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
21
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 reasonably 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 that 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 (which consent shall not be unreasonably withheld),
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.
(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 Initial Purchasers 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 or any Subsidiary Guarantor and one or more of the Initial
Purchasers may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company and the
Subsidiary Guarantors on the one hand and by the Initial Purchasers on
the other from the offering of the Securities; provided, however, that
in no case shall any Initial Purchaser (except as may be provided in
any agreement among the Initial Purchasers relating to the offering of
the Securities) be responsible for any amount in excess of the purchase
discount or commission applicable to the Securities purchased by such
Initial Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the
Company, the Subsidiary Guarantors and the Initial Purchasers 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 on the one hand and of the Initial Purchasers
on the other in connection with the statements or omissions that
resulted in such Losses, as well as any other relevant equitable
considerations. Benefits
22
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 the Subsidiary
Guarantors, and benefits received by the Initial Purchasers shall be
deemed to be equal to the total purchase discounts and commissions in
each case set forth under "Plan of Distribution" in the Final
Memorandum. 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 or any Subsidiary
Guarantor on the one hand or the Initial Purchasers on the other, 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 and the Initial Purchasers agree that it would
not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation that 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 Initial Purchaser within the meaning of either
the Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to
contribution as such Initial Purchaser, and each person who controls
the Company or any Subsidiary Guarantor within the meaning of either
the Act or the Exchange Act and each officer and director of the
Company and any 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 Initial Purchaser. If any one or more
Initial Purchasers shall fail to purchase and pay for any of the Securities
agreed to be purchased by such Initial Purchaser hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Initial Purchasers shall be
obligated severally to take up and pay for (in the respective proportions which
the amount of Securities set forth opposite their names in Schedule I hereto
bears to the aggregate amount of Securities set forth opposite the names of all
the remaining Initial Purchasers) the Securities that the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of Securities that the
defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase
shall exceed 10% of the aggregate amount of Securities set forth in Schedule I
hereto, the remaining Initial Purchasers shall have the right to purchase all,
but shall not be under any obligation to purchase any, of the Securities, and if
such nondefaulting Initial Purchasers do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Initial
Purchaser or the Company or the Subsidiary Guarantors. In the event of a default
by any Initial Purchaser as set forth in this Section 9, the Closing Date shall
be postponed for such period, not exceeding five Business Days, as the
Representatives and the Company shall determine in order that the required
changes in the Final Memorandum or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Initial Purchaser of its liability, if any, to the Company, the Subsidiary
Guarantors or any nondefaulting Initial Purchaser for damages occasioned by its
default hereunder.
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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 the financial markets is such as
to make it, in the judgment of the Representatives, impracticable or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Memorandum.
11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company, the Subsidiary Guarantors or its or their officers
and of the Initial Purchasers 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 the Initial Purchasers or the Company, the Subsidiary Guarantors or
any of the officers, employees, agents, directors or controlling persons
referred to in Section 8 hereof, and will survive delivery of and payment for
the Securities. The provisions of Sections 7, 8 and 9 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 Citigroup Global Markets Inc. General
Counsel (fax no.: (000) 000-0000) and confirmed to the General Counsel,
Citigroup Global Markets Inc. at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel; or, if sent to the Company, will be mailed,
delivered or telefaxed to (000) 000-0000 and confirmed to it at 0000 Xxxxxx
Xxxxxxxxx, XXX Xxxxxxx, Xxxxx 00000, attention of Xxxx Xxxxxx, Esq.
13. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
the officers, employees, agents, directors and controlling persons referred to
in Section 8 hereof, and, except as expressly set forth in Section 5(g) hereof,
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 executed in one
or more counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same instrument.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
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17. Definitions. The terms that 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.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"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 The City of New York.
"Capital Stock" means, with respect to any Person, any shares
or other equivalents (however designated) of any class of corporate stock or
partnership interests or any other participations, rights, warrants, options or
other interests in the nature of an equity interest in such Person, including
preferred stock, but excluding any debt security convertible or exchangeable
into such equity interest.
"Citigroup" shall mean Citigroup Global Markets Inc.
"Commission" shall mean the Securities and Exchange
Commission.
"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.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Person" shall mean any individual, corporation, company
(including any limited liability company), association, partnership, joint
venture, trust, unincorporated organization, government or any agency or
political subdivision thereof or any other entity.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Subsidiary" shall mean in respect of any Person, any
corporation, company (including any limited liability company), association,
partnership, joint venture, trust, unincorporated organization or other business
entity of which a majority of the total voting power of all classes of Capital
Stock of then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof, is at the time owned or controlled, directly or indirectly,
by:
25
(a) such Person,
(b) such Person and one or more Subsidiaries of such
Person, or
(c) one or more Subsidiaries of such Person.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission promulgated
thereunder.
26
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
between the Company and the several Initial Purchasers.
Very truly yours,
AVIALL, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President and Chief
Financial Officer
SUBSIDIARY GUARANTORS:
AVIALL SERVICES, INC.
AVIALL PRODUCT REPAIR SERVICES, INC.
AVIALL JAPAN LIMITED
INVENTORY LOCATOR SERVICE, LLC
INVENTORY LOCATOR SERVICE-UK, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and
Secretary
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
CITIGROUP GLOBAL MARKETS INC.
CREDIT SUISSE FIRST BOSTON LLC
WACHOVIA SECURITIES, LLC
By: CITIGROUP GLOBAL MARKETS INC.
By: /s/ Xxxx Xxxxxx
------------------------------
Name: Xxxx Xxxxxx
Title: Director
For themselves and the other several Initial
Purchasers named in Schedule I to
the foregoing Agreement.
27
