1
EXHIBIT 1.1
T&K DRAFT 2/7/97
1,547,758 Shares
EAGLE USA AIRFREIGHT, INC.
Common Stock
UNDERWRITING AGREEMENT
February ___, 1997
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
ALEX. XXXXX & SONS INCORPORATED
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
As representatives of the
several underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The shareholder of Eagle USA Airfreight, Inc., a Texas corporation
(the "Company"), named in Schedule II hereto (the "Selling Shareholder")
proposes to sell 1,547,758 shares of common stock, par value $.001 per share,
of the Company (the "Firm Shares"), to the several underwriters named in
Schedule I hereto (the "Underwriters"), and the Company and the Selling
Shareholder propose to make certain representations and warranties to each of
the Underwriters and enter into such other agreements as provided by this
Agreement. The Company proposes to issue and sell to the several Underwriters
not more than 232,164 additional shares of its Common Stock, par value $.001
per share (the "Additional Shares"), if requested by the Underwriters as
provided in Section 2 hereof. The Firm Shares and the Additional Shares are
herein collectively called the Shares. The shares of common stock of the
Company to be outstanding after giving effect to the sales contemplated hereby
are hereinafter referred to as the Common Stock.
1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions
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of the Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively called the "Act"), a registration statement
on Form S-3 including a prospectus relating to the Shares, which may be
amended. The registration statement as amended at the time when it becomes
effective, including a registration statement (if any) filed pursuant to Rule
462(b) under the Act increasing the size of the offering registered under the
Act and information (if any) deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430A or Rule 434 under the Act, is
hereinafter referred to as the Registration Statement; and the prospectus
(including any prospectus subject to completion meeting the requirements of
Rule 434(a) under the Act provided by the Company with any term sheet meeting
the requirements of Rule 434(b) as the prospectus provided to meet the
requirements of Section 10(a) of the Act) in the form first used to confirm
sales of Shares is hereinafter referred as the Prospectus.
2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Selling Shareholder agrees to sell, and each
Underwriter agrees, severally and not jointly, to purchase from the Selling
Shareholder at a price per share of $_______ (the "Purchase Price") the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell up to 232,164 Additional Shares and the Underwriters shall have the
right to purchase, severally and not jointly, up to 232,164 Additional Shares
from the Company at the Purchase Price. Additional Shares may be purchased
solely for the purpose of covering over-allotments made in connection with the
offering of the Firm Shares. The Underwriters may exercise their right to
purchase Additional Shares in whole or in part from time to time by giving
written notice thereof to the Company within 30 days after the date of this
Agreement. You shall give any such notice on behalf of the Underwriters and
such notice shall specify the aggregate number of Additional Shares to be
purchased pursuant to such exercise and the date for payment and delivery
thereof. The date specified in any such notice shall be a business day (i) no
earlier than the Closing Date (as hereinafter defined), (ii) no later than ten
business days after such notice has been given and (iii) no earlier than two
business days after such notice has been given. If any Additional Shares are
to be purchased, each Underwriter, severally and not jointly, agrees to
purchase from the Company the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) which bears
the same proportion to the total number of Additional Shares to be purchased
from the Company as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I bears to the total number of Firm Shares.
The Company and the Selling Shareholder hereby agree, and the Company
shall, concurrently with the execution of this Agreement, deliver an agreement
executed by each of the directors and executive officers of the Company,
pursuant to which each such person agrees not to offer, sell, contract to sell,
grant any option to purchase, or otherwise dispose of any common stock of the
Company or any securities convertible into or exercisable or exchangeable for
such common stock or in any other manner transfer all or a portion of the
economic consequences associated with the ownership of any such common stock,
except to the Underwriters pursuant to this Agreement, for a period of 90 days
after the date of the Prospectus without the prior written consent of
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation.
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Notwithstanding the foregoing, during such period (i) the Company may grant
stock options pursuant to the Company's existing stock option plan, (ii) the
Company may issue shares of its common stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof, (iii)
the Company may issue shares of common stock in connection with the purchase by
the Company from time to time of any properties, assets or securities from a
third party, and (iv) any natural person may make intra-family transfers or
transfers to trusts for estate planning purposes.
3. Terms of Public Offering. The Selling Shareholder is advised
by you that the Underwriters propose (i) to make a public offering of the
Shares as soon after the effective date of the Registration Statement as in
your judgment is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and
payment for the Firm Shares shall be made at 10:00 A.M., New York City time, on
the third or fourth business day, unless otherwise permitted by the Commission
pursuant to Rule 15c6-1 of the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Exchange Act") (the "Closing Date"), following the date of the public
offering, at such place as you shall designate. The Closing Date and the
location of delivery of and the form of payment for the Firm Shares may be
varied by agreement among you, the Company and the Selling Shareholder.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at such place as you shall
designate at 10:00 A.M., New York City time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (an "Option
Closing Date"). Any such Option Closing Date and the location of delivery of
and the form of payment for such Additional Shares may be varied by agreement
among you and the Company.
Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date or an Option Closing Date, as the
case may be. Such certificates shall be made available to you for inspection
not later than 9:30 A.M., New York City time, on the business day next
preceding the Closing Date or the applicable Option Closing Date, as the case
may be. Certificates in definitive form evidencing the Shares shall be
delivered to you on the Closing Date or the applicable Option Closing Date, as
the case may be, with any transfer taxes thereon duly paid by the Selling
Shareholder, or the Company, as the case may be, for the respective accounts of
the several Underwriters, against payment of the Purchase Price therefor by
wire transfer of Federal (same day) funds to the account specified by the
Selling Shareholder or the Company, as the case may be, to the Underwriters.
5. Agreements of the Company. The Company agrees with you:
(a) To use its commercially reasonable efforts to cause
the Registration Statement to become effective at the earliest
possible time.
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(b) To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) when the Registration Statement
has become effective (if the Registration Statement shall not have
become effective prior to the execution and delivery of this
Agreement) and when any post-effective amendment to it becomes
effective, (ii) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus
or for additional information, (iii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction, or the initiation of any
proceeding for such purposes, and (iv) of the happening of any event
during the period referred to in paragraph (e) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus in order to
make the statements therein not misleading in any material respect.
If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, the Company will use
commercially reasonable efforts to obtain the withdrawal or lifting of
such order at the earliest possible time.
(c) To furnish to you, without charge, four signed copies
of the Registration Statement as first filed with the Commission and
of each amendment to it, including all exhibits, and to furnish to you
and each Underwriter designated by you such number of conformed copies
of the Registration Statement as so filed and of each amendment to it,
without exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to the
Registration Statement, whether before or after the time when it
becomes effective, or to make any amendment or supplement to the
Prospectus (including the issuance or filing of any term sheet within
the meaning of Rule 434) of which you shall not previously have been
advised or to which you shall reasonably object; and to prepare and
file with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or supplement to the
Prospectus (including the issuance or filing of any term sheet within
the meaning of Rule 434) which may be necessary or advisable in
connection with the distribution of the Shares by you, and to use its
commercially reasonable best efforts to cause the same to become
promptly effective.
(e) Promptly after the Registration Statement becomes
effective, and from time to time thereafter for such period as in the
opinion of counsel for the Underwriters a prospectus is required by
law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish to each Underwriter and dealer as many copies of
the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any
event shall occur as a result of which, in the opinion of counsel for
the Underwriters it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of
the circumstances when the Prospectus is delivered to a purchaser, not
misleading in any material respect, or if it is necessary to amend or
supplement the Prospectus to
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comply with any law, forthwith to prepare and file with the Commission
an appropriate amendment or supplement to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will not
in the light of the circumstances when it is so delivered, be
misleading in any material respect, or so that the Prospectus will
comply with law, and to furnish to each Underwriter and to such
dealers as you shall specify, such number of copies thereof as such
Underwriter or dealers may reasonably request.
(g) Prior to any public offering of the Shares, to
cooperate with you and counsel for the Underwriters in connection with
the registration or qualification of the Shares for offer and sale by
the several Underwriters and by dealers under the state securities or
Blue Sky laws of such jurisdictions as you may request, to continue
such qualification in effect so long as required for distribution of
the Shares and to file such as may be necessary in order to effect
such registration or qualification provided, however, that the Company
shall not be obligated (i) to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified, (ii) to take any action
that would subject it to taxation in any jurisdiction or (iii) to
execute a consent to service of process under the laws of any
jurisdiction (except service of process with respect to the offering
and sale of the Shares).
(h) To make generally available to its stockholders as
soon as reasonably practicable an earnings statement covering a period
of at least twelve months after the effective date of the Registration
Statement (which availability must in any event commence no later than
90 days after the end of such twelve month period) which shall satisfy
the provisions of Section 11(a) of the Act, and to advise you in
writing when such statement has been so made available.
(i) During the period of five years after the date of
this Agreement, (i) to mail as soon as reasonably practicable after
the end of each fiscal year to the record holders of its Common Stock
a financial report of the Company and its subsidiaries on a
consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to
include a consolidated balance sheet, a consolidated statement of
operations, a consolidated statement of cash flows and a consolidated
statement of stockholders' equity as of the end of and for such fiscal
year, together with comparable information as of the end of and for
the preceding year, certified by independent certified public
accountants, and (ii) to mail and make generally available as soon as
practicable after the end of each quarterly period (except for the
last quarterly period of each fiscal year) to such holders who request
them, a consolidated balance sheet, a consolidated statement of
operations and a consolidated statement of cash flows (and similar
financial reports of all unconsolidated subsidiaries, if any) as of
the end of and for such period, and for the period from the beginning
of such year to the close of such quarterly period, together with
comparable information for the corresponding periods of the preceding
year.
(j) During the period referred to in paragraph (i), to
furnish to you as soon as available a copy of each report or other
publicly available information of the Company mailed to the holders of
Common Stock or filed with the Commission and such other
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publicly available information concerning the Company and its
subsidiaries as you may reasonably request.
(k) To pay all costs, expenses, fees and taxes incident
to (i) the preparation, printing, filing and distribution under the
Act of the Registration Statement (including financial statements and
exhibits), each preliminary prospectus and all amendments and
supplements to any of them prior to or during the period specified in
paragraph (e), (ii) the printing and delivery of the Prospectus and
all amendments or supplements to it during the period specified in
paragraph (e), (iii) the printing or reproduction and delivery of this
Agreement, the Preliminary and Supplemental Blue Sky Memoranda and all
other agreements, memoranda, correspondence and other documents
printed and delivered in connection with the offering of the Shares
(including in each case any disbursements of counsel for the
Underwriters relating to such printing, reproduction and delivery),
(iv) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of the several states and
Canadian provinces (including in each case the fees and disbursements
of counsel for the Underwriters relating to such registration or
qualification and memoranda relating thereto), (v) filings and
clearance with the National Association of Securities Dealers, Inc. in
connection with the offering, (vi) the listing of the Additional
Shares on the National Association of Securities Dealers Automated
Quotation system ("NASDAQ") National Market, (vii) furnishing such
copies of the Registration Statement, the Prospectus and all
amendments and supplements thereto as may be requested in accordance
with the provisions of this Agreement for use in connection with the
offering or sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold and (viii) the performance by the Company and
the Selling Shareholder of their other obligations under this
Agreement. The Company and the Selling Shareholder may agree as
between themselves and without limiting the rights of the Underwriters
under this Agreement as to the respective amount of such costs,
expenses, fees and taxes for which each of them will be responsible.
(l) To use its commercially reasonable efforts to
maintain the inclusion of such Common Stock in the NASDAQ National
Market (or on a national securities exchange) for a period of five
years after the effective date of the Registration Statement.
(m) To use its commercially reasonable efforts to do and
perform all things required or necessary to be done and performed
under this Agreement by the Company prior to the Closing Date or any
Option Closing Date, as the case may be, and to satisfy all conditions
precedent to the delivery of the Shares.
6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has or will become
effective; no stop order suspending the effectiveness of the
Registration Statement is or will be in effect, and no proceedings for
such purpose are pending before or threatened by the Commission.
(b) (i) The Registration Statement, when it becomes or
became effective, will or did not contain and, as amended or
supplemented, if applicable, will not contain any
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untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, (ii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Act and (iii) the Prospectus
does not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this
paragraph (b) do not apply to statements or omissions in the
Registration Statement or the Prospectus (or any supplement or
amendment to them) based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) Any term sheet and prospectus subject to completion
provided by the Company to the Underwriters for use in connection with
the offering and sale of the Shares pursuant to Rule 434 under the Act
together are not materially different from the prospectus included in
the Registration Statement (exclusive of any information deemed to be
a part thereof by virtue of Rule 434(d)).
(d) Except for those matters amended or included in the
Prospectus, the preliminary prospectus filed as part of the
Registration Statement or filed thereafter as part of a subsequent
amendment or pursuant to Rule 424 of the Act complied when so filed in
all material respects with the Act; and did not contain an untrue
statement of a material fact or omit to state 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.
(e) The Company and each of its subsidiaries has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has
the corporate power and authority to carry on its business as it is
currently being conducted and to own, lease and operate its
properties, and each is duly qualified and is in good standing as a
foreign corporation authorized to do business in each jurisdiction in
which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be
so qualified would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(f) All of the outstanding shares of capital stock of, or
other ownership interests in, each of the Company's subsidiaries have
been duly authorized and validly issued and are fully paid and
non-assessable, and at the Closing will be owned by the Company, free
and clear of any security interest, claim, lien, encumbrance or
adverse interest of any nature.
(g) All the outstanding shares of capital stock of the
Company (including the Shares to be sold by the Selling Shareholder)
have been duly authorized and validly issued and are fully paid,
non-assessable and were not issued in violation of or subject to any
preemptive or other similar rights to subscribe for or purchase the
same; and the Additional Shares, if any, to be issued and sold by the
Company hereunder have been
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duly authorized and, when issued and delivered to the Underwriters
against payment therefor as provided by this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of
such Additional Shares will not be subject to any preemptive or
similar rights.
(h) The authorized capital stock of the Company,
including the Common Stock, conforms as to legal matters in all
material respects to the description thereof contained in the
Prospectus.
(i) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
other agreement, indenture or instrument material to the conduct of
the business of the Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a party or by which it
or any of its subsidiaries or their respective property is bound,
except for any such violation or default that would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole.
(j) The execution, delivery and performance of this
Agreement, compliance by the Company with all the provisions hereof
and the consummation of the transactions contemplated hereby will not
require any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental
body (except as such may be required under (i) the Act, (ii) the
Exchange Act, or (iii) the securities or Blue Sky laws of the various
states) and will not conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the charter or by-laws
of the Company or any of its subsidiaries or any agreement, indenture
or other instrument to which it or any of its subsidiaries is a party
or by which it or any of its subsidiaries or their respective property
is bound, or violate or conflict with any existing laws,
administrative regulations or rulings or court decrees applicable to
the Company, any of its subsidiaries or their respective property.
(k) Except as otherwise set forth in the Prospectus,
there are no material legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which
any of their respective property is the subject, and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated. No contract or document of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement is not so described
or filed as required.
(l) Neither the Company nor any of its subsidiaries has
violated any existing foreign, federal, state or local law or
regulation relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), nor any federal or state law
relating to discrimination in the hiring, promotion or pay of
employees nor any applicable federal or state wages and hours laws,
nor any provisions of the Employee Retirement Income Security Act or
the rules and regulations promulgated thereunder, which in each case
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might result in any material adverse change in the business,
prospects, financial condition or results of operation of the Company
and its subsidiaries, taken as a whole.
(m) Except as disclosed in the Prospectus, the Company
and each of its subsidiaries has such permits, licenses, franchises
and authorizations of governmental or regulatory authorities
("permits"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate its
respective properties and to conduct its business, except where the
failure to have such permits would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole; the Company and
each of its subsidiaries has fulfilled and performed all of its
material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit, except
where such revocation, termination or impairment would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole; and, except as described in the Prospectus, such permits
contain no restrictions that are materially burdensome to the Company
or any of its subsidiaries.
(n) Except as otherwise set forth in the Prospectus or
such as are not material to the business, prospects, financial
condition or results of operation of the Company and its subsidiaries,
taken as a whole, the Company and each of its subsidiaries has good
and defensible title, free and clear of all liens, claims,
encumbrances and restrictions except liens for taxes not yet due and
payable, to all property and assets described in the Registration
Statement as being owned by it. All leases to which the Company or
any of its subsidiaries is a party are valid and binding and no
default has occurred or is continuing thereunder, which might result
in any material adverse change in the business, prospects, financial
condition or results of operation of the Company and its subsidiaries
taken as a whole, and the Company and its subsidiaries enjoy peaceful
and undisturbed possession under all such leases to which any of them
is a party as lessee with such exceptions as do not materially
interfere with the use made by the Company or such subsidiary.
(o) The Company and each of its subsidiaries maintains
reasonably adequate insurance.
(p) Price Waterhouse LLP are independent public
accountants with respect to the Company as required by the Act.
(q) The financial statements, together with related
schedules and notes forming part of the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly
in all material respects the consolidated financial position, results
of operations and changes in financial position of the Company and its
subsidiaries on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply;
such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed therein;
and the other financial and statistical information and data set forth
in the Registration Statement and the Prospectus
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(and any amendment or supplement thereto) is, in all material
respects, accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Company.
(r) The election by the Company, and the consent to such
election by its stockholders (and, if applicable, by the spouses of
such stockholders), to cause the Company to be taxed as an S
corporation as provided in Section 1362 of the Internal Revenue Code
of 1986, as amended (and the predecessor Code) (the "Code"), was valid
and effective at all times from October 1, 1992 through December 4,
1995, and neither the Internal Revenue Service nor any other person or
entity has challenged or indicated a present intention to challenge
the prior status of the Company as an S corporation during any portion
of such period; the Company has incurred no liability for taxes under
Section 1374 or 1375 of the Code during or for any year in such
period; and the Company has validly adopted a fiscal year as provided
in Sections 444 and 1378 of the Code and Revenue Procedure 83-25,
1983-1, C.B. 689.
(s) The Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(t) No holder of any security of the Company has any
right that has not been waived to require registration of shares of
Common Stock or any other security of the Company in the Registration
Statement.
(u) The Firm Shares are listed on the NASDAQ National
Market. The Company has filed an application to list the Additional
Shares on the NASDAQ National Market and has received notification
that the listing has been approved, subject to notice of issuance of
the Additional Shares.
(v) Except as otherwise disclosed in the Registration
Statement, as of the date set forth therein, there were no outstanding
subscriptions, rights, warrants, options, calls, convertible
securities, commitments of sale or liens related to or entitling any
person to purchase or otherwise to acquire from the Company any shares
of the capital stock of, or other ownership interest in, the Company
or any subsidiary thereof.
(w) Except as disclosed in the Prospectus, there are no
material business relationships or related party transactions required
to be disclosed or incorporated by reference therein by Item 404 of
Regulation S-K of the Commission.
(x) The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with 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
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the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(y) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been
filed, other than those filings being contested in good faith, and all
material taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due pursuant to such returns or
pursuant to any assessment received by the Company or any of its
subsidiaries have been paid, other than those being contested in good
faith and for which adequate reserves have been provided or the
failure of which to file or to be paid would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
7. Representations and Warranties of the Selling Shareholder.
The Selling Shareholder represents and warrants to each Underwriter that:
(a) The Selling Shareholder (together with his spouse) is
the lawful owner of the Shares to be sold by him pursuant to this
Agreement and has, and on the Closing Date (and Option Closing Date,
if applicable) will have, good and clear title to such Shares, free of
all restrictions on transfer, liens, encumbrances, security interests
and claims whatsoever, other than pursuant to the Shareholders'
Agreement dated October 1, 1994 (the "Shareholders' Agreement") and
this Agreement.
(b) Upon delivery of and payment for such Shares pursuant
to this Agreement, good and marketable title to such Shares will pass
to the Underwriters, free and clear of all restrictions on transfer,
liens, encumbrances, security interests and claims whatsoever other
than pursuant to the Shareholders' Agreement, which, with respect to
the Firm Shares, will be terminated concurrently therewith.
(c) The Selling Shareholder has, and on the Closing Date
will have, full legal right and authority to enter into this Agreement
and the Custody Agreement between the Selling Shareholder and American
Securities Transfer & Trust, Inc., as Custodian (the "Custody
Agreement"), and to sell, assign, transfer and deliver such Shares in
the manner provided herein and therein, and this Agreement and the
Custody Agreement have been duly authorized, executed and delivered by
the Selling Shareholder and each of this Agreement and the Custody
Agreement is a valid and binding agreement of the Selling Shareholder
enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited by applicable law
or public policy grounds, and except as enforcement (i) may be limited
by bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and (ii) is subject to general
principles of equity and public policy (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(d) Other than as contemplated by this Agreement, the
Selling Shareholder has not taken, and will not take, directly or
indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Shares pursuant to the distribution contemplated by this
Agreement, and other than as permitted
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by the Act, the Selling Shareholder has not distributed and will not
distribute any prospectus or other offering material in connection
with the offering and sale of the Shares.
(e) The execution, delivery and performance of this
Agreement by the Selling Shareholder, compliance by the Selling
Shareholder with all the provisions hereof and the consummation of the
transactions contemplated hereby will not require any consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as such may
be required under (i) the Act, (ii) the Exchange Act of 1934, or (iii)
the securities or Blue Sky laws of the various states) and will not
conflict with or constitute a breach of any of the terms or provisions
of, or a default under, or any agreement, indenture or other
instrument to which the Selling Shareholder is a party or by which the
Selling Shareholder or property of the Selling Shareholder is bound,
or violate or conflict with any laws, administrative regulation or
ruling or court decree applicable to the Selling Shareholder or
property of the Selling Shareholder.
(f) Such parts of the Registration Statement under the
caption "Principal and Selling Shareholders" which specifically relate
to the Selling Shareholder do not, and will not on the Closing Date
(and any Option Closing Date, if applicable), 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 light of circumstances under which they were made, not
misleading.
(g) At any time during the period described in paragraph
5(e) hereof, if there is any change in the information referred to in
paragraph 7(f) above, except as contemplated in the Prospectus, the
Selling Shareholder will immediately notify you of such change.
(h) To the best knowledge of the Selling Shareholder, the
representations and warranties of the Company contained in Section 6
hereof are true and correct; the Selling Shareholder has reviewed and
is familiar with the Registration Statement as filed with the
Commission and any preliminary prospectuses contained therein and has
no knowledge of any material fact, condition or information not
disclosed in such preliminary prospectus which has adversely affected
or could adversely affect the condition, financial or otherwise, or
the earnings, business affairs, or business prospects of the Company
and its subsidiaries considered as one enterprise; to the best
knowledge of the Selling Shareholder, such preliminary prospectuses do
not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not
misleading.
8. Indemnification. (a) The Company and the Selling
Shareholder, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, liabilities and judgments caused
by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (as amended or
supplemented if the Company shall
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have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriters furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use therein; provided, however, that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, the indemnification provided for
herein shall not apply to any loss, claim, damage, liability or judgment to the
extent that the same results from the fact that a copy of the Prospectus was
not sent or given to a person to whom any Shares were sold at or prior to the
confirmation of the sale of Shares and if the untrue statement or omission was
corrected in the Prospectus. Notwithstanding the foregoing, the aggregate
liability of the Selling Shareholder pursuant to the provisions of this
paragraph shall be limited to an amount equal to the aggregate purchase price
received by the Selling Shareholder from the sale of the Selling Shareholder's
Shares hereunder. The Company and the Selling Shareholder may agree as between
themselves and without limiting the rights of the Underwriters under this
Agreement as to the respective amount of such liability for which each of them
will be responsible.
(b) In case any action shall be brought against any
Underwriter or any person controlling such Underwriter, based upon any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement thereto and with respect to which indemnity may be
sought against the Company and the Selling Shareholder, such Underwriter shall
promptly notify the Company and the Selling Shareholder in writing and the
Company and the Selling Shareholder shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses. Any Underwriter or any such controlling
person shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or such controlling person unless
(i) the employment of such counsel shall have been specifically authorized in
writing by the Company, (ii) the Company and the Selling Shareholder shall have
failed to assume the defense and employ counsel within a reasonably prompt
period following the receipt of notification in writing from the Underwriters
or (iii) the named parties to any such action (including any impleaded parties)
include both such Underwriter or such controlling person and the Company or the
Selling Shareholder, as the case may be, and such Underwriter or such
controlling person shall have been advised by such counsel that there may be
one or more legal defenses available to it which are different from or
additional to those available to the Company or the Selling Shareholder, as the
case may be, (in which case the Company and the Selling Shareholder shall not
have the right to assume such different or additional defense on behalf of such
Underwriter or such controlling person, it being understood, however, that the
Company and the Selling Shareholder shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all such Underwriters and controlling
persons, which firm shall be designated in writing by Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation and that the reasonable fees and expenses of
such counsel shall be reimbursed as they are incurred). Neither the Company
nor the Selling Shareholder shall be liable for any settlement of any such
action effected without
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the written consent of such party but if settled with the written
consent of such party, such party agrees to indemnify and hold harmless any
Underwriter and any such controlling person from and against any loss or
liability by reason of such settlement. If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for reasonable fees and expenses of counsel as contemplated by the second
sentence of this paragraph and such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request within 30
business days after receipt by such indemnifying party of the aforesaid
request, the indemnifying party agrees that it shall pay interest on such
unreimbursed amount from the date of such request at the indemnifying party's
borrowing rate for funds borrowed from its principal lender plus 2% per annum.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(c) Each Underwriter agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement, any person controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, the Selling
Shareholder and each person, if any, controlling such Selling Shareholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
to the same extent as the foregoing indemnity from the Company and the Selling
Shareholder to each Underwriter but only with reference to information relating
to such Underwriter furnished in writing by or on behalf of such Underwriter
through you expressly for use in the Registration Statement, the Prospectus or
any preliminary prospectus. In case any action shall be brought against the
Company, any of its directors, any such officer or any person controlling the
Company or the Selling Shareholder or any person controlling the Selling
Shareholder based on the Registration Statement, the Prospectus or any
preliminary prospectus and in respect of which indemnity may be sought against
any Underwriter, the Underwriter shall have the rights and duties given to the
Company and the Selling Shareholder (except that if the Company and/or the
Selling Shareholder shall have assumed the defense thereof, such Underwriter
shall not be required to do so, but may employ separate counsel therein and
participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of such Underwriter), and the Company, its directors,
any such officers and any person controlling the Company and the Selling
Shareholder and any person controlling the Selling Shareholder shall have the
rights and duties given to the Underwriter, by Section 8(b) hereof.
(d) If the indemnification provided for in this Section 8
is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities and judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholder on the one hand and the Underwriters on the other hand from
the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Selling Shareholder and the
Underwriters in connection with the statements
-14-
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or omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Shareholder and the
Underwriters shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
and the Selling Shareholder, and the total underwriting discounts and
commissions received by the Underwriters, bear to the total price to the public
of the Shares, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and the Selling Shareholder and
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Company, the Selling Shareholder or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company, the Selling Shareholder and the Underwriters
agree that it would not be just and equitable if contribution 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 in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
judgments referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 8(d) are several in proportion to the respective number of Shares
purchased by each of the Underwriters hereunder and not joint. The obligations
of the Selling Shareholder to contribute to this Section 8(d) shall be subject
to the limitation contained in paragraph 8(a) above with respect to the maximum
aggregate liability of the Selling Shareholder under or in connection with this
Agreement.
(e) The Selling Shareholder hereby designates Eagle USA
Airfreight, Inc., 0000 Xxxxxxxx, Xxxxxxx, Xxxxx 00000, (a Texas corporation)
as its authorized agent, upon which process may be served in any action, suit
or proceeding which may be instituted in any state or federal court in the
State of New York by any Underwriter or person controlling an Underwriter
asserting a claim for indemnification or contribution under or pursuant to this
Section 8, and the Selling Shareholder and the Company will accept the
jurisdiction of such court in such action, and waive, to the fullest extent
permitted by applicable law, any defense based upon lack of personal
jurisdiction or venue, provided that a copy of any such process shall be sent
or given to the Company and/or the Selling Shareholder, as appropriate, at the
address for notices specified in Section 12 hereof.
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9. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the
Closing Date.
(b) The Registration Statement shall have become
effective not later than 5:00 P.M. (and in the case of a Registration
Statement filed under Rule 462(b) of the Act, not later than 10:00
P.M.), New York City time, on the date of this Agreement or at such
later date and time as you may approve in writing, and at the Closing
Date no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall have been commenced or shall be pending before or contemplated
by the Commission.
(c) (i) Since the date of the latest balance sheet included
in the Registration Statement and the Prospectus, there shall not have
been any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or
otherwise, or in the earnings except as disclosed in the Prospectus,
affairs, business or prospects, whether or not arising in the ordinary
course of business, of the Company, (ii) except as disclosed in the
Prospectus, since the date of the latest balance sheet included in the
Registration Statement and the Prospectus there shall not have been
any change, or any development involving a prospective material
adverse change, in the capital stock or in the long-term debt of the
Company from that set forth in the Registration Statement and
Prospectus, (iii) the Company and its subsidiaries shall have no
liability or obligation, direct or contingent, which is material to
the Company and its subsidiaries, taken as a whole, other than those
reflected in the Registration Statement and the Prospectus and (iv) on
the Closing Date you shall have received a certificate dated the
Closing Date, signed by Xxxxx X. Xxxxx and Xxxxxxx X. Xxxxxx, in their
capacities as the President and Secretary of the Company, confirming
the matters set forth in paragraphs (a), (b), and (c) of this Section
9.
(d) All the representations and warranties of the Selling
Shareholder contained in this Agreement shall be true and correct on
the Closing Date with the same force and effect as if made on and as
of the Closing Date and you shall have received a certificate to such
effect, dated the Closing Date, from the Selling Shareholder.
(e) You shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Underwriters), dated
the Closing Date, of Xxxxx & Xxxxx, L.L.P., counsel for the Company,
to the effect that:
(i) each of the Company and Eagle Freight
Services, Inc. ("EFS") has been duly incorporated, is validly
existing as a corporation in good standing under the laws of
its jurisdiction of incorporation and has all corporate power
and authority required to carry on its business as described
in the Prospectus;
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(ii) all of the outstanding shares of capital
stock of, or other ownership interests in, EFS have been duly
and validly authorized and issued and are fully paid and non-
assessable;
(iii) all the outstanding shares of Common Stock
(including the Shares to be sold by the Selling Shareholder)
have been duly authorized and validly issued and are fully
paid, non-assessable and to such counsel's knowledge, none of
the outstanding shares of Common Stock (including the Shares
to be sold by the Selling Shareholder) were issued in
violation of or subject to any preemptive rights or other
similar rights to subscribe for or purchase the same;
(iv) the Additional Shares, if any, to be issued
and sold by the Company hereunder have been duly authorized,
and when issued and delivered to the Underwriters against
payment therefor as provided by this Agreement, will have been
validly issued and will be fully paid and non-assessable, and
the issuance of such shares is not subject to any preemptive
rights or other similar rights to subscribe for or purchase
the same;
(v) this Agreement has been duly authorized,
executed and delivered by the Company and is a valid and
binding agreement of the Company enforceable in accordance
with its terms (except as rights to indemnity and contribution
hereunder may be limited by applicable law or public policy
grounds, and except as enforcement (i) may be limited by
bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and (ii) is subject to
general principles of equity and public policy (regardless of
whether such enforceability is considered in a proceeding in
equity or at law);
(vi) the Registration Statement has become
effective under the Act, and to such counsel's knowledge no
stop order suspending its effectiveness has been issued and no
proceedings for that purpose have been instituted or
threatened by the Commission;
(vii) the statements under the caption "Description
of Capital Stock" in the Prospectus and Item 15 of Part II of
the Registration Statement insofar as such statements
constitute a summary of documents or proceedings referred to
therein, fairly present in all material respects the
information called for with respect to such documents and
proceedings;
(viii) the execution, delivery and performance of
this Agreement by the Company, compliance by the Company with
all the provisions hereof and the consummation by the Company
of the transactions contemplated hereby (i) will not require
any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other
governmental body of the United States of America or the State
of Texas or, except for any such consent, approval,
authorization, or order, which, if not obtained, would not
prevent or adversely affect in any material respect the
performance of this Agreement or have a material adverse
effect on the Company and its subsidiaries, taken as a whole,
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and except for such as have been made or obtained under the
Act and the Exchange Act and such as may be required under
applicable Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters and the
clearance of such offering with the NASD and (ii) will not
conflict with or constitute a breach of any of the terms or
provisions of, or a default under, (A) the charter or by-laws
of the Company or EFS or to such counsel's knowledge, any
agreement, indenture or other instrument to which the Company
or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or their respective properties are
bound, that is filed as an exhibit to the Registration
Statement or (iii) violate or conflict with any federal
securities laws or, to such counsel's knowledge, any other
existing laws, administrative regulations or rulings or court
decrees of the United States of America or the State of Texas
which rulings or decrees specifically name the Company or are
directed at its property (provided, however, that such counsel
need express no opinion with respect to compliance with any
federal or state securities or antifraud law, rule or
regulation except as otherwise specifically stated in the
opinion of such counsel), except for any such violation,
breach or conflict referred to in clause (ii) or (iii) above
which would not prevent or adversely affect in any material
respect the performance of this Agreement or have a material
adverse effect on the Company and its subsidiaries, taken as a
whole;
(ix) such counsel does not know of any legal or
governmental proceeding pending or threatened to which the
Company or any of its subsidiaries is a party or to which any
of their respective property is subject which is required to
be described in the Registration Statement or the Prospectus
and is not so described, or of any contract or other document
which is required to be described in the Registration
Statement or the Prospectus or is required to be filed as an
exhibit to the Registration Statement which is not described
or filed as required;
(x) the Company is not an "investment company" or
a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended;
(xi) to the best of such counsel's knowledge,
after due inquiry, no holder of any security of the Company
has any right to require registration in the Registration
Statement of shares of Common Stock or any other security of
the Company that has not been waived; and
(xii) the Registration Statement (including any
Registration Statement filed under Rule 462(b) of the Act, if
any) and the Prospectus and any supplement or amendment
thereto (except for (i) the financial statements and schedules
(including the notes thereto and the auditors' reports
thereon) included therein, (ii) the other financial and
statistical information included therein and (iii) the
exhibits thereto as to which no opinion need be expressed)
comply as to form in all material respects with the Act.
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In rendering such opinion, such counsel may rely as to matters
of fact on certificates of officers of the Company and of governmental
officials, in which case their opinion is to state that they are so doing.
Such counsel shall also be entitled to state that its opinion is limited to the
laws of the United States of America and the State of Texas.
Such counsel shall also include, in a separate paragraph of
its opinion, statements to the following effect: Such counsel has participated
in conferences with officers and other representatives of the Company, the
Selling Shareholder, representatives of the independent public accountants of
the Company and your representatives at which the contents of the Registration
Statement and Prospectus and related matters were discussed. Although such
counsel is not passing upon, and does not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus, such counsel advises you that, on
the basis of the foregoing (relying as to materiality to a large extent upon
officers and other representatives of the Company and your representatives), no
facts have come to the attention of such counsel which lead such counsel to
believe that the Registration Statement (other than (i) the financial
statements and schedules (including the notes thereto and the auditors' reports
thereon) included therein, (ii) the other financial and statistical information
included therein and (iii) the exhibits thereto, as to which such counsel has
not been asked to comment), as of the time it became effective, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus (other than (i) the financial statements
(including the notes thereto and the auditors' report thereon) including
therein and (ii) the other financial and statistical information included
therein, as to which such counsel has not been asked to comment), as of issue
date thereof, contained any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
The opinion of Xxxxx & Xxxxx, L.L.P. described in paragraph (e) above
shall be rendered to you at the request of the Company and shall so state
therein.
(f) You shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Underwriters), dated
the Closing Date, of Xxxxxx X. Xxxxxxxxx, general counsel for the
Company, to the effect that:
(i) the Company and each of its subsidiaries has
been duly incorporated, is validly existing as a corporation
in good standing under the laws of its jurisdiction of
incorporation and has all corporate power and authority
required to carry on its business as it is currently being
conducted and to own, lease and operate its properties;
(ii) the Company and each of its subsidiaries is
duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in
which the nature of its business or its ownership or leasing
of property requires such qualification, including each state
in which the Prospectus indicates a Company terminal is
located, except where the failure to be so
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qualified would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(iii) to such counsel's knowledge, neither the
Company nor any of its subsidiaries has violated any
Environmental Laws, nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees
nor any applicable federal or state wages and hours laws, nor
any provisions of the Employee Retirement Income Security Act
or the rules and regulations promulgated thereunder, which in
each case might result in any material adverse change in the
business, prospects, financial condition or results of
operation of the Company and its subsidiaries, taken as a
whole;
(iv) the Company and each of its subsidiaries has
such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("permits"), including,
without limitation, under any applicable Environmental Laws,
as are necessary to own, lease and operate its respective
properties and to conduct its business in the manner described
in the Prospectus; to the best of such counsel's knowledge,
after due inquiry, the Company and each of its subsidiaries
has fulfilled and performed all of its material obligations
with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such
permit, subject in each case to such qualification as may be
set forth in the Prospectus; and, except as described in the
Prospectus, such permits contain no restrictions that are
materially burdensome to the Company or any of its
subsidiaries;
(g) You shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Underwriters), dated
the Closing Date, of Xxxxxx and Xxxxx, L.L.P., counsel for the Selling
Shareholder, to the effect that:
(i) this Agreement has been duly authorized,
executed and delivered by the Selling Shareholder and is a
valid and binding agreement of the Selling Shareholder
enforceable in accordance with its terms (except as rights to
indemnity and contribution hereunder may be limited by
applicable law or public policy grounds, and except as
enforcement (i) may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting creditors'
rights generally and (ii) is subject to general principles of
equity and public policy (regardless of whether such
enforceability is considered in a proceeding in equity or at
law);
(ii) the execution, delivery and performance of
this Agreement by the Selling Shareholder, compliance by the
Selling Shareholder with the provisions hereof and the
consummation of the transactions contemplated hereby (i) will
not to such counsel's knowledge require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body of the United
States of America or the State of Texas or, except for any
such consent, approval, authorization, or order, which, if not
obtained, would not
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prevent or adversely affect in any material respect the
performance of this Agreement or have a material adverse
effect on the Company and its subsidiaries, taken as a whole,
and except for such as have been made or obtained under the
Act and the Exchange Act and such as may be required under
applicable Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters and the
clearance of such offering with the NASD and (ii) will not
conflict with or constitute a breach of any of the terms or
provisions of, or a default under, (A) to such counsel's
knowledge, any agreement, indenture or other instrument to
which the Selling Shareholder is a party or by which the
Selling Shareholder or his properties are bound, that is filed
as an exhibit to the Registration Statement or (iii) violate
or conflict with, to such counsel's knowledge, any existing
laws, administrative regulations or rulings or court decrees
of the United States of America or the State of Texas which
rulings or decrees specifically name the Selling Shareholder
or are directed at his property, except for any such
violation, breach or conflict referred to in clause (ii) or
(iii) above which would not prevent or adversely affect in any
material respect the performance of this Agreement by the
Selling Shareholder;
(iii) the Custody Agreement has been duly
authorized, executed and delivered by the Selling Shareholder
and is a valid and binding agreement of the Selling
Shareholder enforceable in accordance with its terms (except
as enforcement (i) may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting creditors'
rights generally and (ii) is subject to general principles of
equity and public policy (regardless of whether such
enforceability is considered in a proceeding in equity or at
law));
(iv) the Selling Shareholder has full legal right
and, to such counsel's knowledge, any approval required by law
(other than any approval imposed by the applicable state
securities and Blue Sky laws) to sell, assign, transfer and
deliver the Shares to be sold by him in the manner provided in
this Agreement and the Custody Agreement; and
(v) to such counsel's knowledge, the Selling
Shareholder has good and marketable title to the certificate
or certificates for the Shares to be sold by him and upon
delivery thereof, and payment therefor pursuant hereto, each
of the Underwriters will receive good and marketable title,
free and clear of all restrictions on transfer, liens,
encumbrances, security interests and claims whatsoever.
In rendering such opinion, such counsel may rely as to matters of fact
on a certificate of the Selling Shareholder. Such counsel shall also be
entitled to state that its opinion is limited to the laws of the United States
of America and the State of Texas.
The opinion of Xxxxxx and Xxxxx, L.L.P. described in paragraph (g)
above shall be rendered to you at the request of the Selling Shareholder and
shall so state therein.
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(h) You shall have received on the Closing Date an
opinion, dated the Closing Date, of Xxxxxxxx & Knight, P.C., counsel
for the Underwriters, as to the matters referred to in clauses (iv),
(v) (but only with respect to the Company), (vi) and (vii) (but only
with respect to the statements under the captions "Description of
Capital Stock" and "Underwriting") and in the second to last
subparagraph of the foregoing paragraph (e). In giving such opinion
with respect to the matters covered by such subparagraph such counsel
may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check
or verification except as specified.
(i) You shall have received a letter on and as of the
Closing Date, in form and substance satisfactory to you, from Price
Waterhouse, independent public accountants, with respect to the
financial statements and certain financial information contained in
the Registration Statement and the Prospectus and substantially in the
form and substance of the letter delivered to you by Price Waterhouse
on the date of this Agreement.
(j) The Company and the Selling Shareholder shall not
have failed at or prior to the Closing Date to perform or comply with
any of the agreements herein contained and required to be performed or
complied with by the Company at or prior to the Closing Date.
The several obligations of the Underwriters to purchase any Additional Shares
hereunder are subject to the delivery to you on the applicable Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of such Additional
Shares and other matters related to the issuance of such Additional Shares.
10. Effective Date of Agreement and Termination. This Agreement
shall become effective upon the later of (i) execution of this Agreement and
(ii) when oral notification of the effectiveness of the Registration Statement
has been released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company and the Selling Shareholder 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, except
as disclosed in the Prospectus, any adverse change or development involving a
prospective adverse change in the condition, financial or otherwise, of the
Company and its subsidiaries taken as a whole or the earnings, affairs, or
business prospects of the Company and its subsidiaries taken as a whole,
whether or not arising in the ordinary course of business, which would, in your
judgment, make it impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus, (ii) any outbreak or escalation of
hostilities or other national or international calamity or crisis or change in
economic conditions or in the financial markets of the United States or
elsewhere that, in your judgment, is material and adverse and would, in your
judgment, make it impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus, (iii) the suspension or material
limitation of trading in securities on the New York Stock Exchange, the
American Stock
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Exchange or the NASDAQ National Market or limitation on prices for securities
on any such exchange or National Market, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business or operations of the Company and its Subsidiaries taken as a whole,
(v) the declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
If on the Closing Date or on the applicable Option Closing Date, as
the case may be, any one or more of the Underwriters shall fail or refuse to
purchase the Firm Shares or Additional Shares, as the case may be, which it or
they have agreed to purchase hereunder on such date and the aggregate number of
Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused
to purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused
to purchase on such date; provided that in no event shall the number of Firm
Shares or Additional Shares, as the case may be, which any Underwriter has
agreed to purchase pursuant to Section 2 hereof be increased pursuant to this
Section 9 by an amount in excess of one-ninth of such number of Firm Shares or
Additional Shares, as the case may be, without the written consent of such
Underwriter. If on the Closing Date or on an Option Closing Date, as the case
may be, any Underwriter or Underwriters shall fail or refuse to purchase Firm
Shares, or Additional Shares, as the case may be, and the aggregate number of
Firm Shares or Additional Shares, as the case may be, with respect to which
such default occurs is more than one-tenth of the aggregate number of Shares to
be purchased on such date by all Underwriters and arrangements satisfactory to
you and the Company for purchase of such Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter and the Company and the Selling Shareholder.
In any such case which does not result in termination of this Agreement, either
you, the Company or the Selling Shareholder shall have the right to postpone
the Closing Date or the applicable Option Closing Date, as the case may be, but
in no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
any such Underwriter under this Agreement.
11. Agreements of the Selling Shareholder. The Selling
Shareholder agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes with
respect to the Shares to be sold by the Selling Shareholder; and
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(b) To take all commercially reasonable actions in
cooperation with the Company and the Underwriters to cause the
Registration Statement to become effective at the earliest possible
time and to do and perform all things required by this Agreement to be
done and performed by them under this Agreement prior to the Closing
Date.
12. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (a) if to the Company, to Eagle
USA Airfreight, Inc., 0000 Xxxxxxxx, Xxxxxxx, Xxxxx 00000, (b) if to the
Selling Shareholder, to Xxxxxx X. Xxxxxxx, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxxxxxxx,
Xxxxx 00000, and (c) if to any Underwriter or to you, to you c/x Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Syndicate Department, or in any case to such other address
as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Selling Shareholder, the Company, its
officers and directors and of the several Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Shares, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter or by or on behalf of the Selling Shareholder, the Company, the
officers or directors of the Company or any controlling person of the Company,
(ii) acceptance of the Shares and payment for them hereunder and (iii)
termination of this Agreement.
If this Agreement shall be terminated by the Underwriters (other than
pursuant to Section 10 (ii), (iii) and (iv)) because of any failure or refusal
on the part of the Company or the Selling Shareholder to comply with the terms
or to fulfill any of the conditions of this Agreement, the Company and the
Selling Shareholder agree to reimburse the several Underwriters for all
out-of-pocket expenses (including the fees and disbursements of counsel)
reasonably incurred by them in connection with the proposed offering of the
Shares.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Selling Shareholder,
the Company, the Underwriters, any controlling persons referred to herein and
their respective successors and assigns, all as and to the extent provided in
this Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include
a purchaser of any of the Shares from any of the several Underwriters merely
because of such purchase.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CHOICE OF LAWS
PROVISIONS THEREOF.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
EAGLE USA AIRFREIGHT, INC.
By:
------------------------------
Title:
SELLING SHAREHOLDER
----------------------------------
Xxxxxx X. Xxxxxxx
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
ALEX. XXXXX & SONS INCORPORATED
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By: XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:
----------------------------------------
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SCHEDULE I
NUMBER OF
FIRM SHARES
Underwriters TO BE PURCHASED
------------ ---------------
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Alex. Xxxxx & Sons Incorporated
The Xxxxxxxx-Xxxxxxxx Company, Inc.
___________
Total 1,547,758
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SCHEDULE II
SELLING SHAREHOLDER
Number of
Firm Shares
Name Being Sold
---- ----------
Xxxxxx X. Xxxxxxx 1,547,758
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