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EXHIBIT 1.1
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REPUBLIC AIRWAYS HOLDINGS INC.
(a Delaware corporation)
/ / Shares of Common Stock
PURCHASE AGREEMENT
Dated: , 2002
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TABLE OF CONTENTS
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PURCHASE AGREEMENT............................................................................1
SECTION 1. Representations and Warranties....................................................3
(a) Representations and Warranties by the Company...............................3
(i) Compliance with Registration Requirements..............................3
(ii) Independent Accountants................................................4
(iii) Financial Statements...................................................4
(iv) No Material Adverse Change in Business.................................4
(v) Good Standing of the Company...........................................5
(vi) Good Standing of Subsidiaries..........................................5
(vii) Capitalization.........................................................5
(viii) Authorization of Agreement.............................................6
(ix) Authorization and Description of Securities............................6
(x) Absence of Defaults and Conflicts......................................6
(xi) Absence of Labor Dispute...............................................7
(xii) Absence of Proceedings.................................................7
(xiii) Accuracy of Exhibits...................................................7
(xiv) Possession of Intellectual Property....................................7
(xv) Absence of Further Requirements........................................8
(xvi) Possession of Licenses and Permits.....................................8
(xvii) Title to Property......................................................8
(xviii) Compliance with Cuba Act...............................................9
(xix) Investment Company Act.................................................9
(xx) Environmental Laws.....................................................9
(xxi) Registration Rights...................................................10
(xxii) Restricted Stockholders...............................................10
(xxiii) Statistical and Market-Related Data...................................10
(xxiv) Reserved Securities...................................................10
(xxv) ERISA.................................................................10
(xxvi) Tax Returns and Payment of Taxes......................................10
(xxvii) Insurance.............................................................11
(xxviii) No Stabilization or Manipulation......................................11
(xxix) Certain Transactions..................................................11
(xxx) Accounting and Other Controls.........................................12
(xxxi) Foreign Corrupt Practices Act.........................................12
(xxxii) Absence of Restrictions on Dividends by Subsidiaries..................12
(xxxiii) Air Carrier Authorization.............................................12
(b) Officer's Certificates.....................................................12
SECTION 2. Sale and Delivery to Underwriters; Closing.......................................13
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(a) Initial Securities.........................................................13
(b) Option Securities..........................................................13
(c) Payment....................................................................13
(d) Denominations; Registration................................................14
SECTION 3. Covenants of the Company.........................................................14
(a) Compliance with Securities Regulations and Commission Requests.............14
(b) Filing of Amendments.......................................................15
(c) Delivery of Registration Statements........................................15
(d) Delivery of Prospectuses...................................................15
(e) Continued Compliance with Securities Laws..................................16
(f) Blue Sky Qualifications....................................................16
(g) Rule 158...................................................................16
(h) Use of Proceeds............................................................17
(i) Listing....................................................................17
(j) Restriction on Sale of Securities..........................................17
(k) Reporting Requirements.....................................................17
(l) Compliance with NASD Rules.................................................17
(m) Compliance with Rule 463...................................................18
SECTION 4. Payment of Expenses..............................................................18
(a) Expenses...................................................................18
(b) Termination of Agreement...................................................19
SECTION 5. Conditions of Underwriters' Obligations............................................19
(a) Effectiveness of Registration Statement....................................19
(b) Opinion of Counsel for Company.............................................19
(c) Opinion of Counsel for Underwriters........................................20
(d) Officers' Certificate......................................................20
(e) Accountants' Comfort Letters...............................................20
(f) Bring-down Comfort Letter..................................................20
(g) Approval of Listing........................................................21
(h) No Objection...............................................................21
(i) Lock-up Agreements.........................................................21
(j) Conditions to Purchase of Option Securities................................21
(i) Officers' Certificate..............................................21
(ii) Opinion of Counsel for Company.....................................21
(iii) Opinion of Counsel for Underwriters................................21
(iv) Bring-down Comfort Letter..........................................21
(k) Additional Documents.......................................................22
(l) Termination of Agreement...................................................22
SECTION 6. Indemnification..................................................................22
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(a) Indemnification of Underwriters............................................22
(b) Indemnification of Company, Directors and Officers.........................24
(c) Actions Against Parties; Notification......................................24
(d) Settlement Without Consent if Failure to Reimburse.........................25
(e) Indemnification for Reserved Securities....................................25
SECTION 7. Contribution.....................................................................25
SECTION 8. Representations, Warranties and Agreements to Survive Delivery...................27
SECTION 9. Termination of Agreement.........................................................27
(a) Termination; General.......................................................27
(b) Liabilities................................................................27
SECTION 10. Default by One or More of the Underwriters.......................................27
SECTION 11. Notices..........................................................................28
SECTION 12. Parties..........................................................................28
SECTION 13. GOVERNING LAW AND TIME...........................................................29
SECTION 14. Effect of Headings...............................................................29
SCHEDULES
Schedule A - List of Underwriters..............................................Sch A-1
Schedule B - List of Persons Subject to Lock-up................................Sch B-1
Schedule C - Pricing Information...............................................Sch C-1
EXHIBITS
Exhibit A-1 - Form of Opinion of Fulbright & Jaworski L.L.P. .....................A-1-1
Exhibit A-2 - Form of Opinion of Arthur Amron, Esq................................A-2-1
Exhibit B - Form of Lock-up Letter................................................B-1
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REPUBLIC AIRWAYS HOLDINGS INC.
(a Delaware corporation)
/ / Shares of Common Stock
(Par Value $.001 Per Share)
PURCHASE AGREEMENT
, 2002
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Raymond James & Associates
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Republic Airways Holdings Inc., a Delaware corporation (the
"COMPANY"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("MERRILL LYNCH") and each of the other
Underwriters named in Schedule A hereto (collectively, the "UNDERWRITERS," which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Merrill Lynch and Raymond James & Associates are
acting as representatives (in such capacity, the "REPRESENTATIVES"), with
respect to (i) the sale by the Company, and the purchase by the Underwriters,
acting severally and not jointly, of the respective numbers of shares of Common
Stock, par value $.001 per share, of the Company (the "COMMON STOCK") set forth
in Schedule A, and (ii) the grant by the Company to the Underwriters, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of [ ] additional shares of Common Stock to cover
over-allotments, if any. The aforesaid [ ] shares of Common Stock (the "INITIAL
SECURITIES") to be purchased by the Underwriters and all or any part of the [ ]
shares of Common Stock subject to the option described in Section 2(b) hereof
(the "OPTION SECURITIES") are hereinafter called, collectively, the
"SECURITIES."
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The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Company and the Underwriters agree that up to % of the Initial
Securities to be purchased by the Underwriters (the "RESERVED SECURITIES") shall
be reserved for sale by the Underwriters to certain eligible directors,
officers, employees and other persons having specified relationships with the
Company, as part of the distribution of the Securities by the Underwriters,
subject to the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. (the
"NASD") and all other applicable laws, rules and regulations. To the extent that
such Reserved Securities are not orally confirmed for purchase by such eligible
employees and persons having business relationships with the Company by the end
of the first business day after the date of this Agreement, such Reserved
Securities may be offered to the public as part of the public offering
contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-1 (No. 333-84092) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 ACT"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("RULE 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 ACT REGULATIONS") and paragraph (b) of Rule 424 ("RULE 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("RULE 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"TERM SHEET") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in any such prospectus or in any such Term Sheet, as the
case may be, that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective (a) pursuant to paragraph (b) of Rule 430A is
referred to as "RULE 430A INFORMATION" or (b) pursuant to paragraph (d) of Rule
434 is referred to as "RULE 434 INFORMATION." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement is herein called a "PRELIMINARY PROSPECTUS." Such registration
statement, including the exhibits thereto and schedules thereto, at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "REGISTRATION STATEMENT." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "RULE 462(b) REGISTRATION STATEMENT," and after
such filing the term "REGISTRATION STATEMENT" shall include the Rule 462(b)
Registration Statement. The final prospectus in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is herein
called the "PROSPECTUS." If Rule 434 is relied on, the term "PROSPECTUS" shall
refer to the preliminary
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Prospectus dated [ ], 2002 together with the Term Sheet and all references in
this Agreement to the date of such Prospectus shall mean the date of the
applicable Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof and agrees with each Underwriter, as
follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will 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
not misleading, and the Prospectus, any preliminary prospectus and any
supplement thereto or prospectus wrapper prepared in connection therewith,
at their respective times of issuance and at the Closing Time, complied and
will comply in all material respects with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus and such
preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the offer and sale of Reserved Securities.
Neither the Prospectus nor any amendments or supplements thereto (including
any prospectus wrapper), at the time the Prospectus or any amendments or
supplements thereto were issued and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
If Rule
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434 is used, the Company will comply with the requirements of Rule 434 and
the Prospectus shall not be "materially different," as such term is used in
Rule 434, from the prospectus included in the Registration Statement at the
time it became effective. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through the Representatives expressly for use in the
Registration Statement or the Prospectus.
Each preliminary prospectus and the prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(ii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement have advised the Company that they are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iii) FINANCIAL STATEMENTS. The financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiary at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiary for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved except as disclosed therein. The supporting schedules
included in the Registration Statement present fairly in accordance with
GAAP the information required to be stated therein. The selected financial
data, the summary financial information and the capitalization information
included in the Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. No financial statements
are required to be included in the Registration Statement that have not
been so included.
(iv) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs, business prospects or
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properties of the Company and its subsidiary considered as one enterprise,
whether or not arising in the ordinary course of business (a "MATERIAL
ADVERSE EFFECT"), (B) there have been no transactions entered into by the
Company or its subsidiary, other than those in the ordinary course of
business, which are material with respect to the Company and its subsidiary
considered as one enterprise, and (C) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(v) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
(vi) GOOD STANDING OF SUBSIDIARY. The subsidiary of the Company (the
"SUBSIDIARY") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus
and is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Prospectus, all of the issued and outstanding
capital stock of each such subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of the subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of such
subsidiary. The only subsidiary of the Company is the subsidiary listed on
Exhibit 21.1 to the Registration Statement.
(vii) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" and, after giving
effect to the offering will be as set forth in the column entitled "As
Adjusted" under the caption "Capitalization" (except, in each case, for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or options
referred to in the Prospectus). The
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shares of issued and outstanding capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable;
none of the outstanding shares of capital stock of the Company was issued
in violation of the preemptive or other similar rights of any
securityholder of the Company.
(viii) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company.
(ix) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The Securities to
be purchased by the Underwriters from the Company have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued,
fully paid and non-assessable; the Common Stock conforms to all statements
relating thereto contained in the Prospectus and such description conforms
to the rights set forth in the instruments defining the same; no holder of
the Securities will be subject to personal liability by reason of being
such a holder; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the Company.
(x) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor its
subsidiary is in violation of its charter or by-laws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or its subsidiary is a party or by which it or any of
them may be bound, or to which any of the property or assets of the Company
or the subsidiary is subject (collectively, "AGREEMENTS AND INSTRUMENTS")
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated in this Agreement and in
the Registration Statement (including, but not limited to, [the
contemporaneous sale of Securities to American Airlines,] the issuance and
sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations under this
Agreement have been duly authorized by all necessary corporate action and
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or the subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter or by-laws of the Company or any subsidiary or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, gov-
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ernment instrumentality or court, domestic or foreign, having jurisdiction
over the Company or the subsidiary or any of their assets, properties or
operations. As used herein, a "REPAYMENT EVENT" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or the subsidiary.
(xi) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees
of the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or the
subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xii) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or the
subsidiary, which is required to be disclosed in the Registration Statement
(other than as disclosed therein), or which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be expected
to materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder; the aggregate of
all pending legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(xiii) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement which
have not been so described and filed as required.
(xiv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and the
subsidiary own or possess, or can acquire on reasonable terms, adequate
licenses, patents, patent rights, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property or
other rights or similar interests (collectively, "INTELLECTUAL PROPERTY")
to carry on the business now operated by them or to be operated by them as
described in the Prospectus except when the failure to possess such
licenses would not, singly or in the aggregate have a Material Adverse
Effect, and neither the Company nor the subsidiary has received any no-
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tice or is otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any facts
or circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or the subsidiary
therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, would result in a Material Adverse Effect.
(xv) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities under this Agreement or the consummation of the transactions
contemplated by this Agreement, except (i) such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities or blue sky laws and (ii) such as have been
obtained under the laws and regulations of jurisdictions outside the United
States in which the Reserved Securities are offered.
(xvi) POSSESSION OF LICENSES AND PERMITS. The Company and the
subsidiary possess such permits, licenses, approvals, consents and other
authorizations (collectively, "LICENSES") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies and third
parties, governmental or otherwise, necessary to conduct the business now
operated by them as described in the Prospectus except where the failure to
possess such licenses would not, singly or in the aggregate, have a
Material Adverse Effect; the Company and its subsidiaries are in compliance
with the terms and conditions of all such Licenses, except where the
failure so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Licenses are valid and in full force and effect,
except when the invalidity of such Licenses or the failure of such Licenses
to be in full force and effect would not have a Material Adverse Effect;
and neither the Company nor the subsidiary has received any notice of
proceedings relating to the revocation or modification of any such Licenses
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(xvii) TITLE TO PROPERTY. The Company and the subsidiary have good
and marketable title to all real property owned by the Company and the
subsidiary and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or the
subsidiary; and all of the leases and subleases material to the business of
the Company and the subsidiary, considered as one enterprise, and under
which the Company or the subsidi-
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ary holds properties described in the Prospectus, are in full force and
effect, and neither the Company nor the subsidiary has any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or the subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or the subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xviii) COMPLIANCE WITH CUBA ACT. The Company has complied with the
provisions of that certain Florida act relating to disclosure of doing
business with Cuba, codified as Section 517.075 of the Florida statutes,
and the rules and regulations thereunder (collectively, the "CUBA ACT") or
is exempt therefrom.
(xix) INVESTMENT COMPANY ACT. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 ACT").
(xx) ENVIRONMENTAL LAWS. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor the subsidiary is in
violation of any applicable federal, state, local or foreign statute, law,
rule, regulation, ordinance, code or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment relating to pollution or
protection of human health, the environment (including without limitation,
ambient air, surface water, ground water, land surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "HAZARDOUS MATERIALS") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "ENVIRONMENTAL
LAWS"), (B) the Company and the subsidiary have all permits, authorizations
and approvals required under any applicable Environmental Laws and are each
in compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating to any Environmental Law against the
Company or the subsidiary and (D) there are no events or circumstances that
might reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or the
subsidiary relating to any Environmental Laws.
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(xxi) REGISTRATION RIGHTS. Except as disclosed in the Registration
Statement and the Prospectus, there are no persons with registration rights
or other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act.
(xxii) RESTRICTED STOCKHOLDERS. The persons listed on Schedule B
hereto include all directors and officers of the Company, the holders of 3%
or greater of the Common Stock of the Company and American Airlines, Inc.
(xxiii) STATISTICAL AND MARKET-RELATED DATA. The statistical and
market-related data included in the Prospectus are based on or derived from
sources which the Company believes to be reliable and accurate in all
material respects or represent the Company's good faith estimates that are
made on the basis of data derived from such sources.
(xxiv) RESERVED SECURITIES. Neither the Company nor any of its
affiliates has offered, or caused the Underwriters to offer, any Reserved
Securities with the intent to unlawfully influence such purchaser of
Reserved Securities.
(xxv) ERISA. Each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), that is maintained, administered or contributed to by
the Company or any of its subsidiaries for employees or former employees of
the Company and its subsidiaries has been maintained in compliance with its
terms and the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal Revenue
Code of 1986, as amended (the "CODE"), except to the extent that any
failure to maintain, administer or contribute to any such plan would not
reasonably be expected to result in a Material Adverse Effect. No
prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code, has occurred with respect to any such plan
excluding transactions effected pursuant to a statutory or administrative
exemption, except to the extent that any such occurrence would not
reasonably be expected to result in a Material Adverse Effect. For each
such plan which is subject to the funding rules of Section 412 of the Code
or Section 302 of ERISA, no "accumulated funding deficiency" as defined in
Section 412 of the Code has been incurred, whether or not waived, and the
fair market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions) exceeds the present value of all
benefits accrued under such plan determined using reasonable actuarial
assumptions;
(xxvi) TAX RETURNS AND PAYMENT OF TAXES. The Company and its
subsidiaries have timely filed all federal, state, local and foreign tax
returns that are required to be filed or have duly requested extensions
thereof and all such tax returns are true, correct
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and complete, except to the extent that any failure to file or request an
extension, or any incorrectness would not reasonably be expected to result
in a Material Adverse Effect. The Company and its subsidiaries have timely
paid all taxes shown as due on such filed tax returns (including any
related assessments, fines or penalties), except to the extent that any
such taxes are being contested in good faith and by appropriate
proceedings, or to the extent that any failure to pay would not reasonably
be expected to result in a Material Adverse Effect; and adequate charges,
accruals and reserves have been provided for in the financial statements
referred to in Section 1(a)(iii) above in accordance with GAAP in respect
of all federal, state, local and foreign taxes for all periods as to which
the tax liability of the Company or any of its subsidiaries has not been
finally determined or remains open to examination by applicable taxing
authorities, except to the extent that any failure to create adequate
charges, accruals and reserves would not reasonably be expected to result
in a Material Adverse Effect.
(xxvii) INSURANCE. The Company and the subsidiary are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as the Company reasonably believes are prudent
and customary in the businesses in which they are engaged; and neither the
Company nor any of its subsidiaries has any reason to believe that any of
them 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 except where the failure to
renew or maintain such coverage would not reasonably be expected to result
in a Material Adverse Effect. The officers and directors of the Company are
insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are reasonably believed to be
prudent and customary for officers and directors liability insurance of a
public company and as would cover claims which could be made in connection
with the issuance of the Securities; and the Company has no reason to
believe that it will not be able to renew its existing directors and
officers liability insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
cover its officers and directors.
(xxviii) NO STABILIZATION OR MANIPULATION. Neither the Company nor,
to the knowledge of the Company, any of its directors, officers or
affiliates has taken nor will take, directly or indirectly, any action
designed to, or that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Securities in violation
of Regulation M under the 1934 Act.
(xxix) CERTAIN TRANSACTIONS. Except as disclosed in the Prospectus,
there are no outstanding loans, advances, or guarantees of indebtedness by
the Company to or for the benefit of any of the executive officers or
directors of the Company or any of the members of the families of any of
them, other than those not reasonably required to be disclosed in the
Prospectus.
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(xxx) ACCOUNTING AND OTHER CONTROLS. The Company has established for
itself and each subsidiary a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions were
executed in accordance with management's general or specific authorization;
(ii) transactions were recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets was permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets was
compared with existing assets at reasonable intervals and appropriate
action was taken with respect to any differences.
(xxxi) FOREIGN CORRUPT PRACTICES ACT. Neither the Company, nor the
subsidiary, nor to the knowledge of the Company any director, officer,
agent, employee or other person associated with or acting on behalf of the
Company or any such subsidiary has, directly or indirectly: used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; made any unlawful payment
to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or made
any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(xxxii) ABSENCE OF RESTRICTIONS ON DIVIDENDS BY SUBSIDIARIES. No
subsidiary of the Company is currently prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other
distributions on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary or from transferring any
of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as disclosed in the Prospectus.
(xxxiii) AIR CARRIER CERTIFICATION. Chautauqua Airlines, Inc., a
wholly owned subsidiary of the Company, is a "citizen of the United States"
(as defined in Section 40102(a)(15) of Title 49 of the United States Code,
as amended) and is an air carrier operating under a certificate of public
convenience and necessity issued by the Secretary of Transportation
pursuant to Section 41102 of Title 49, United States Code. There is in
force with respect to Chautauqua Airlines, Inc. an air carrier operating
certificate issued by the Federal Aviation Administration pursuant to 14
C.F.R. Part 119.
(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
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SECTION 2. SALE AND DELIVERY TO UNDERWRITERS;
CLOSING.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule C, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) OPTION SECURITIES. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an additional [ ]
shares of Common Stock, as set forth in Schedule A, at the price per share set
forth in Schedule C, less an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial Securities but
not payable on the Option Securities. The option hereby granted will expire 30
days after the date hereof and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Securities upon
notice by the Representatives to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and delivery for such Option Securities. Any
such time and date of delivery for the Option Securities (a "DATE OF DELIVERY")
shall be determined by the Representatives, but shall not be later than seven
full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all
or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the total
number of Initial Securities, subject in each case to such adjustments as the
Representatives in their discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Cahill
Gordon & Reindel, 80 Pine Street, New York, New York 10005, or at such other
place as shall be agreed upon by the Representatives and the Company, at 9:00
A.M. (Eastern time) on, 2002 (unless postponed in accordance with the provisions
of Section 10), or such other time not later than ten business days after such
date as shall be agreed upon by the Representatives and the Company (such time
and date of payment and delivery being herein called "CLOSING TIME").
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In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company, but in any event not later than
_______________, 2002.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Merrill Lynch, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with
each Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable, and will notify the Representatives
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus,
or of the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of
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any proceedings for any of such purposes. The Company will promptly effect
the filings necessary pursuant to Rule 424(b) and will take such steps as
it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or
to the Prospectus, will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters,
without charge, two signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(d) DELIVERY OF PROSPECTUSES. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period
when the Prospectus is required to be delivered under the 1933 Act or the
Securities Exchange of 1934 (the "1934 ACT"), such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto furnished
to the Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
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(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is
required by the 1933 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or
for the Company, to amend the Registration Statement or amend or supplement
the Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to
amend the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company
will furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representatives may designate
and to maintain such qualifications in effect for a period of ending on the
earlier of (i) one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement and (ii)
as long as may be necessary to complete distribution of the Securities;
PROVIDED, HOWEVER, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for a
period ending on the earlier of (i) one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement and (ii)
as long as may be necessary to complete distribution of the Securities.
(g) RULE 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement covering the
twelve-month period ending ____________, 2003 for the purposes of, and to
provide the benefits contemplated by, the last paragraph of Section 11(a)
of the 1933 Act.
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(h) USE OF PROCEEDS. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds".
(i) LISTING. The Company will use its best efforts to effect and
maintain the quotation of the Common Stock on the Nasdaq National Market
and will file with the Nasdaq National Market all documents and notices
required by the Nasdaq National Market of companies that have securities
that are traded in the over-the-counter market and quotations for which are
reported by the Nasdaq National Market.
(j) RESTRICTION ON SALE OF SECURITIES. During the period ending 180
days after the date of the Prospectus, the Company will not, without the
prior written consent of Merrill Lynch, (i) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of any share of Common Stock
or any securities convertible into or exercisable or exchangeable for
Common Stock or file any registration statement under the 1933 Act with
respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Stock or other securities, in cash
or otherwise. The foregoing sentence shall not apply to (A) the Securities
to be sold hereunder, (B) any shares of Common Stock issued by the Company
upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof and referred to in the Prospectus, (C) any
shares of Common Stock issued or options to purchase Common Stock granted
pursuant to existing employee benefit plans of the Company referred to in
the Prospectus or (D) any shares of Common Stock issued pursuant to any
non-employee director stock plan or dividend reinvestment plan.
(k) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods and rules and regulations of the
Commission thereunder.
(l) COMPLIANCE WITH NASD RULES. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the
NASD or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of this
Agreement. The Underwriters will notify the Company as to which persons
will need to be so restricted. At the request of the Underwriters, the
Company will direct the transfer agent to place a stop transfer restriction
upon such securities for such period of time. Should the Company release,
or
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seek to release, from such restrictions any of the Reserved Securities, the
Company agrees to reimburse the Underwriters for any reasonable expenses
(including, without limitation, legal expenses) they incur in connection
with such release.
(m) COMPLIANCE WITH RULE 463. The Company will file with the
Commission such reports on Form SR as may be required pursuant to Rule 463
of the 1933 Act Regulations.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including, without limiting
the generality of the foregoing, (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities, (ix) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the NASD of the terms of the sale of the
Securities, (x) the fees and expenses incurred in connection with the inclusion
of the Securities in the Nasdaq National Market, (xi) all costs and expenses of
the Underwriters, including the fees and disbursements of counsel for the
Underwriters, in connection with matters related to the Reserved Securities
which are designated by the Company for sale to directors, officers and
employees and others having specified relationships with the Company and (xii)
the Company's pro rata costs and expenses of meetings with prospective investors
and the road show (including road show consultants, venues, and travel and
accommodation for its directors and employees) and 50% of the costs and expenses
incurred for chartered air travel in connection with the road show. It is
understood, however, that except as provided in this Section 4, and Section 6
and Section 7 hereof, the Underwriters will pay all of their own costs and
expenses including fees and disbursements of their counsel, stock transfer taxes
payable on resale of
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any of the Securities by them and any advertising expenses connected with any
offers they may make.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section 9(a)
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rule 430A)
or, if the Company has elected to rely upon Rule 434, a Term Sheet shall
have been filed with the Commission in accordance with Rule 424(b).
(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of each of Fulbright & Jaworski L.L.P., counsel for the
Company, and Arthur Amron, Esq., General Counsel of Wexford Capital LLC,
each in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters to the effect set forth in Exhibits A-1 and A-2 hereto,
respectively, and to such further effect as counsel to the Underwriters may
reasonably request. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the
State of New York, the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
its subsidiaries and certificates of public officials.
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(c) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Cahill Gordon & Reindel, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters, in form and substance satisfactory to the
Representatives. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the
State of New York, the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
its subsidiaries and certificates of public officials.
(d) OFFICERS' CERTIFICATE. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information
is given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or properties
of the Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business, and the Representatives
shall have received a certificate of the President or a Vice President of
the Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending or
are contemplated by the Commission.
(e) ACCOUNTANTS' COMFORT LETTERS. At the time of the execution of this
Agreement, the Representatives shall have received from Deloitte & Touche
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter
for each of the other Underwriters containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(f) BRING-DOWN COMFORT LETTER. At Closing Time, the Representatives
shall have received from Deloitte & Touche LLP a letter, dated as of
Closing Time, to the effect that it reaffirms the statements made in the
letter furnished pursuant to subsection (g) of this Section, except that
the specified date referred to shall be a date not more than three business
days prior to Closing Time.
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(g) APPROVAL OF QUOTATION. At Closing Time, the Securities shall have
been approved for quotation on the Nasdaq National Market, subject only to
official notice of issuance.
(h) NO OBJECTION. The NASD has confirmed to the Representatives or
their counsel that it has not raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(i) LOCK-UP AGREEMENTS. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form
of Exhibit B hereto signed by the persons listed on Schedule B hereto.
(j) CONDITIONS TO PURCHASE OF OPTION SECURITIES. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations
and warranties of the Company contained herein and the statements in any
certificates furnished by the Company and any subsidiary of the Company
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Representatives shall have received:
(i) OFFICERS' CERTIFICATE. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) OPINION OF COUNSEL FOR COMPANY. The favorable opinion of
each of Fulbright & Jaworski L.L.P., counsel for the Company, and
Arthur Amron, Esq., General Counsel of Wexford Capital LLC, each in
form and substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinions required by Section 5(b) hereof.
(iii) OPINION OF COUNSEL FOR UNDERWRITERS. The favorable
opinion of Cahill Gordon & Reindel, counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(c) hereof.
(iv) BRING-DOWN COMFORT LETTER. A letter from Deloitte &
Touche LLP, in form and substance satisfactory to the Representatives
and dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Representatives pursuant to
Section 5(f) hereof, except that the
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"specified date" in the letter furnished pursuant to this paragraph
shall be a date not more than five days prior to such Date of
Delivery.
(k) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection
with the issuance and sale of the Securities as herein contemplated shall
be satisfactory in form and substance to the Representatives and counsel
for the Underwriters.
(l) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the
Company at any time at or prior to Closing Time or such Date of Delivery,
as the case may be, and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in
full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF UNDERWRITERS. The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of (A) the violation of any applicable
laws or regulations
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of foreign jurisdictions where Reserved Securities have been offered and
(B) any untrue statement or alleged untrue statement of a material fact
included in the material distributed in foreign jurisdictions in connection
with the reservation and sale of the Reserved Securities to eligible
directors, officers, employees and other persons having specified
relationships with the Company or the omission or alleged omission
therefrom of a material fact necessary to make the statements therein, when
considered in conjunction with the Prospectus or preliminary prospectus,
not misleading;
(iii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission or in connection with any violation of
the nature referred to in Section 6(a)(ii)(A) hereof; provided that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the Company; and
(iv) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission or
in connection with any violation of the nature referred to in Section
6(a)(ii)(A) hereof, to the extent that any such expense is not paid under
clause (i), (ii) or (iii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) and PROVIDED FURTHER that
the Company will not be liable to any Underwriter with respect to any Prospectus
to the extent that the Company shall sustain the burden of proving that any such
loss, liability, claim, damage or expense resulted from the fact that such
Underwriter, in contravention of a requirement of this Agreement or applicable
law, sold Securities to a person to whom such Underwriter failed to send or
give, at or prior to the Closing Date, a copy of the Final Prospectus, as then
amended or supplemented if: (i) the Company has previously furnished copies
thereof (sufficiently in advance of the Closing Date to allow for distribution
by the Closing Date) to the Underwriter and the loss, liability, claim, damage
or expense of such Underwriter resulted from an untrue statement or omission of
a material fact contained in or omitted from the Preliminary Pro-
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<Page>
spectus which was corrected in the Final Prospectus as, if applicable, amended
or supplemented prior to the Closing Date and such Final Prospectus was required
by law to be delivered at or prior to the written confirmation of sale to such
person and (ii) such failure to give or send such Final Prospectus by the
Closing Date to the party or parties asserting such loss, liability, claim,
damage or expense would have constituted the sole defense to the claim asserted
by such person.
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS . Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 6(a)
above, counsel to the indemnified parties shall be selected by Merrill Lynch,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto),
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<Page>
unless such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(iii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) INDEMNIFICATION FOR RESERVED SECURITIES. In connection with the
offer and sale of the Reserved Securities, the Company agrees, promptly upon a
request in writing to indemnify and hold harmless the Underwriters from and
against any and all losses, liabilities, claims, damages and expenses incurred
by them as a result of the failure of eligible directors, officers and employees
and other persons having specified relationships with the Company to pay for and
accept delivery of Reserved Securities which, by the end of the first business
day following the date of this Agreement, were subject to a properly confirmed
agreement to purchase.
SECTION 7. CONTRIBUTION. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities pursuant to this Agreement or (ii) if the allocation provided
by clause (i) 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 on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions,
or in connection with any violation of the nature referred to in Section
6(a)(ii)(A) hereof, which resulted in such losses, liabilities, claims, damages
or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds
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<Page>
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received
by the Underwriters, in each case as set forth on the cover of the Prospectus,
or, if Rule 434 is used, the corresponding location on the Term Sheet, bear to
the aggregate initial public offering price of the Securities as set forth on
such cover.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission or any violation of the nature referred to in Section
6(a)(ii)(A) hereof.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include, subject to the limitations set forth in Section 6 hereof, any legal or
other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities 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 any 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 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
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<Page>
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time or
at any time prior to the Date of Delivery, in the case of Option Securities,
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs, business prospects or properties of the Company and
its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representatives, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a banking moratorium has
been declared by either Federal or New York authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or
more of the Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "DEFAULTED SECURITIES"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for
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one or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to
any Date of Delivery which occurs after the Closing Time, the obligation of
the Underwriters to purchase and of the Company to sell the Option
Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the Underwriters to purchase and the Company to sell the relevant Option
Securities, as the case may be, either the Representatives or the Company shall
have the right to postpone Closing Time or the relevant Date of Delivery, as the
case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives c/o Merrill Lynch, Pierce,
Fenner & Smith Incorporated, at North Tower, World Financial Center, New York,
New York 10281-1209, attention of [ ]; notices to the Company shall be
directed to it at 2500 S. High School Road, Suite 160, Indianapolis, Indiana
46241, attention of Bryan K. Bedford.
SECTION 12. PARTIES. This Agreement shall each inure to the benefit
of and be binding upon the Underwriters, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any per-
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son, firm or corporation, other than the Underwriters, the Company and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
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<Page>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
REPUBLIC AIRWAYS HOLDINGS INC.
By:
--------------------------------
Name:
Title:
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<Page>
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
RAYMOND JAMES & ASSOCIATES
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
--------------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
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<Page>
SCHEDULE A
<Table>
<Caption>
Maximum
Number of Number of
Initial Option
Name of Underwriter Securities Securities
- ------------------- ---------- ----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................
Raymond James & Associates..................
Deutsche Bank Securities Inc................
Total.......................................
</Table>
Schedule A-1
<Page>
SCHEDULE B
List of persons and entities
subject to lock-up(1)
Wexford Capital LLC
[Wexford Funds]
[D&Os, principal stockholders]
[American Airlines, Inc.]
[America West]
- ----------
(1) Wexford to confirm list.
Schedule B-1
<Page>
SCHEDULE C
REPUBLIC AIRWAYS HOLDINGS INC.
/ / Shares of Common Stock
(Par Value $.001 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $[ ].
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[ ], being an amount equal to the initial
public offering price set forth above less $[ ] per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option Securities.
Schedule C-1
<Page>
Exhibit A-1
FORM OF OPINION OF FULBRIGHT & JAWORSKI L.L.P.
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(iii) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus in the column entitled "Actual"
under the caption "Capitalization" and, after giving effect to the offering will
be as set forth in the column entitled "As Adjusted" under the caption
"Capitalization" (except, in each case, for subsequent issuances, if any,
pursuant to the Purchase Agreement or pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or pursuant to the exercise
of convertible securities or options referred to in the Prospectus); the shares
of issued and outstanding capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable; and to our knowledge
none of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any securityholder of the
Company.
(iv) The Securities to be purchased by the Underwriters from
the Company have been duly authorized for issuance and sale to the Underwriters
pursuant to the Purchase Agreement and, when issued and delivered by the Company
pursuant to the Purchase Agreement against payment of the consideration set
forth in the Purchase Agreement, will be validly issued and fully paid and
non-assessable and no holder of the Securities is or will be subject to personal
liability by reason of being such a holder.
(v) To our knowledge the issuance and sale of the Securities
by the Company are not subject to the preemptive or other similar rights of any
securityholder of the Company.
(vi) The Purchase Agreement has been duly authorized, executed
and delivered by the Company.
(vii) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the best of
our knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued
Exhibit A-1-1
<Page>
under the 1933 Act and no proceedings for that purpose have been instituted or
are pending or threatened by the Commission.
(viii) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434 Information,
as applicable, the Prospectus and each amendment or supplement to the
Registration Statement and the Prospectus as of their respective effective or
issue dates (other than the financial statements, other financial data and
supporting schedules included therein or omitted therefrom, as to which we need
express no opinion) complied as to form in all material respects with the
requirements of the 1933 Act andzx the 1933 Act Regulations.
(ix) If Rule 434 has been relied upon, the Prospectus was not
"materially different," as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective.
(x) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory requirements,
with any applicable requirements of the charter and by-laws of the Company and
the requirements of the Nasdaq National Market.
(xi) Except as described in the Prospectus, there is not
pending or, to the best of our knowledge, threatened any action, suit,
proceeding, inquiry or investigation, to which the Company or any subsidiary is
a party, or to which the property of the Company or any subsidiary is subject,
before or brought by any court or governmental agency or body, domestic or
foreign, which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the transactions
contemplated in the Purchase Agreement or the performance by the Company of its
obligations thereunder.
(xii) The information in the Prospectus under "Description of
Capital Stock" and "Certain Relationships and Related Transactions" and in the
Registration Statement under Item 14, to the extent that it constitutes matters
of law, summaries of legal matters, the Company's charter and bylaws or legal
proceedings, or legal conclusions, has been reviewed by us and is correct in all
material respects.
(xiii) There are no statutes or regulations that are required
to be described in the Prospectus that are not described as required.
(xiv) All descriptions in the Registration Statement of
contracts and other documents to which the Company or its subsidiaries are a
party are accurate in all material respects. To the best of our knowledge, no
contract or agreement is required to be filed as an exhibit to the Registration
Statement that is not so filed.
(xv) To the best of our knowledge, the Company is not in
violation of its charter or by-laws and no default by the Company or any
subsidiary exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in
Exhibit A-1-2
<Page>
any contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the Registration
Statement or the Prospectus or filed or incorporated by reference as an exhibit
to the Registration Statement.
(xvi) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under the 1933
Act and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states, as to
which we need express no opinion) is necessary or required in connection with
the due authorization, execution and delivery of the Purchase Agreement or for
the offering, issuance, sale or delivery of the Securities and the other
transactions contemplated by the Purchase Agreement.
(xvii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the Purchase
Agreement and in the Registration Statement (including the issuance and sale of
the Securities, and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use Of Proceeds") and compliance
by the Company with its obligations under the Purchase Agreement do not and will
not, whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(x) of the Purchase Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or the subsidiary pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument, known to us, to which the Company or the subsidiary is
a party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or the subsidiary is subject (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
have a Material Adverse Effect), nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any subsidiary, or
any applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to us, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any subsidiary or any of their
respective properties, assets or operations.
(xviii) To the best of our knowledge, there are no persons
with registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise registered by the
Company under the 1933 Act who have not waived such right.
(xix) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
Although we have not undertaken, except as otherwise indicated
in this opinion, to determine independently, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements in
the Registration Statement or any amendment thereto, we have participated in the
preparation of the Registration Statement and the Pro-
Exhibit A-1-3
<Page>
spectus, including review and discussion of the contents thereof. Nothing has
come to our attention that has caused us to believe that the Registration
Statement or any amendment thereto, at the time the Registration Statement or
any amendment thereto became effective, 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, or that the
Prospectus, as of its date and as of the Closing Time, as the case may be,
contained an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or that any amendment
or supplement to the Prospectus, as of its date, and as of the Closing Time, as
the case may be, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that we do not express any opinion with
respect to the financial statements and the schedules and other financial data
included in the Registration Statement or the Prospectus).
In rendering such opinion, such counsel may rely as to matters
of fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
Exhibit A-1-4
<Page>
Exhibit A-2
FORM OF OPINION OF ARTHUR AMRON, ESQ.
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect.
(ii) The subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus
and is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Prospectus, all of the issued and outstanding
capital stock of the subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and, to the best of our knowledge,
is owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of the subsidiary
was issued in violation of the preemptive or similar rights of any
securityholder of the subsidiary.
(iii) Except as described in the Prospectus, there is not pending or,
to the best of my knowledge, threatened any action, suit, proceeding,
inquiry or investigation, to which the Company or any subsidiary is a
party, or to which the property of the Company or any subsidiary is
subject, before or brought by any court or governmental agency or body,
domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the Purchase Agreement or
the performance by the Company of its obligations thereunder.
(iv) To the best of my knowledge, the subsidiary is not in violation
of its charter or by-laws and no default by the Company or any subsidiary
exists in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument that
is described or referred to in the Registration Statement or the Prospectus
or filed or incorporated by reference as an exhibit to the Registration
Statement.
Exhibit A-2-1
<Page>
Although I have not undertaken, except as otherwise indicted in this
opinion, to determine independently, and do not assume any responsibility for,
the accuracy, completeness or fairness of the statements in the Registration
Statement or any amendment thereto, I have participated in the preparation of
the Registration Statement and the Prospectus, including review and discussion
of the contents thereof. Nothing has come to my attention that has caused me to
believe that the Registration Statement or any amendment thereto, at the time
the Registration Statement or any amendment thereto became effective, 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, or that the Prospectus, as of its date and as of the Closing Time,
as the case may be, contained an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or that any amendment or supplement to the Prospectus, as of its
date, and as of the Closing Time, as the case may be, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that I do not
express any opinion with respect to the financial statements and the schedules
and other financial data included in the Registration Statement or the
Prospectus).
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent he deems proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
Exhibit A-2-2
<Page>
Exhibit B
, 2002
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Raymond James & Associates
Deutsche Bank Securities Inc.
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering
of Common Stock by
REPUBLIC AIRWAYS HOLDINGS INC.
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Purchase Agreement (the "PURCHASE AGREEMENT"), between Republic Airways Holdings
Inc., a Delaware corporation (the "COMPANY"), each of you as representatives of
a group of Underwriters named therein and any other parties thereto, relating to
an underwritten public offering of Common Stock, $0.001 par value, of the
Company.
In order to induce you and the other Underwriters to enter into the
Purchase Agreement and in recognition of the benefit that such an offering will
confer upon the undersigned, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the undersigned agrees
with you and each of the Underwriters named in the Purchase Agreement that the
undersigned will not, without the prior written consent of Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("MERRILL LYNCH"), (i) offer, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, pledge or otherwise dispose of (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due
to cash settlement or otherwise) by the Company or any affiliate of the Company
or any person in privity with the Company or any affiliate of the Company),
directly or indirectly, including the filing (or participation in the filing) of
a registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of any class of common stock of the Company (the "COMMON STOCK") or any
securities convertible into or exercisable or exchangeable for shares of Common
Stock, or publicly announce an
B-1
<Page>
intention to effect any such transaction, or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence or ownership of the Common Stock,
whether any such swap or transaction is settled by delivery of Common Stock or
other securities, in cash or otherwise, in each case, for the period ending 180
days after the date of the Purchase Agreement.
Notwithstanding the foregoing, the undersigned may transfer Common
Stock either during his or her lifetime as a bona fide gift or gifts or on death
by will or intestacy to his or her immediate family or to a trust the
beneficiaries of which are exclusively the undersigned and/or a member or
members of his or her immediate family or to a charitable organization;
PROVIDED, HOWEVER, that it shall be a condition to the transfer that prior to
the transfer the transferee execute and deliver an agreement to Merrill Lynch
(on behalf of the Underwriters) stating that the transferee will receive and
hold the Common Stock subject to this letter, and there shall be no further
transfer of such Common Stock except in accordance with this letter. For the
purpose of this paragraph, "immediate family" shall mean a spouse, lineal
descendant, parent or sibling of the transferor and a "charitable organization"
shall mean an organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
In addition, notwithstanding the foregoing, if the undersigned is a
partnership, the partnership may transfer any Common Stock to a partner of such
partnership or a retired partner of such partnership who retires after the date
hereof, or to the estate of any such partner or retired partner, and any partner
who is an individual may transfer Common Stock as a bona fide gift or gifts as
provided in the immediately preceding paragraph; PROVIDED, HOWEVER, that it
shall be a condition to the transfer that prior to the transfer the transferee
execute and deliver an agreement to Merrill Lynch (on behalf of the
Underwriters) stating that the transferee will receive and hold the Common Stock
subject to this letter, and there shall be no further transfer of such Common
Stock except in accordance with this letter.
B-2
<Page>
If for any reason the Purchase Agreement shall be terminated prior to
the Closing Time (as defined in the Purchase Agreement), the agreement set forth
above shall likewise be terminated.
Yours very truly,
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Signature
Name:
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Address:
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B-3