1
EXHIBIT 1.1
3,000,000 Shares
Forward Air Corporation
Common Stock
UNDERWRITING AGREEMENT
April __, 1999
BT Alex. Xxxxx Incorporated
Xxxxxx Xxxxxx & Company, Inc.
Xxxxx and Xxxxxxxxxxxx, Inc.
As Representatives of the
Several Underwriters
c/o BT Alex. Xxxxx Incorporated
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Forward Air Corporation, a Tennessee corporation (the "Company"), and
Xxxxx X. Xxxxxxxxx (the "Selling Shareholder") propose to sell to the several
underwriters (the "Underwriters") named in Schedule I hereto, for whom you are
acting as representatives (the "Representatives"), an aggregate of 3,000,000
shares of the Company's Common Stock, $0.01 par value (the "Firm Shares"), of
which 1,000,000 shares will be sold by the Company and 2,000,000 shares will be
sold by the Selling Shareholder. Certain other shareholders of the Company's
Common Stock named in Schedule II hereto (the "Option Shareholders") also
propose to sell at the Underwriters' option an aggregate of up to 450,000
additional shares of the Company's Common Stock (the "Option Shares") as set
forth below. The Company, the Selling Shareholder and the Option Shareholders
are sometimes referred to herein collectively as the "Sellers." The respective
amounts of the Firm Shares to be so purchased by the several Underwriters are
set forth opposite their names in Schedule I hereto, and the amount to be sold
by each of the Option Shareholders is set forth opposite each of their names in
Schedule II hereto.
As the Representatives, you have advised the Company, the Selling
Shareholder and the Option Shareholders (a) that you are authorized to enter
into this Agreement on behalf of the several Underwriters and (b) that the
several Underwriters are willing, acting severally and not jointly, to purchase
the numbers of Firm Shares set forth opposite their respective names in
2
Schedule I, plus their pro rata portion of the Option Shares if you elect to
exercise the over-allotment option in whole or in part for the accounts of the
several Underwriters. The Firm Shares and the Option Shares (to the extent the
option is exercised) are herein collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY, THE SELLING SHAREHOLDER
AND THE OPTION SHAREHOLDERS.
(a) The Company represents and warrants to each of the Underwriters as
follows:
(i) A registration statement on Form S-3 (File No. 333-75853) with
respect to the Shares has been prepared by the Company in conformity in all
material respects with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the Rules and Regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder and has
been filed with the Commission. The Company has complied with the conditions for
the use of Form S-3. Copies of such registration statement, including any
amendments thereto, the preliminary prospectuses (meeting the requirements of
the Rules and Regulations in all material respects) contained therein and the
exhibits, financial statements and schedules, as finally amended and revised,
have heretofore been delivered by the Company to you. Such registration
statement, together with any registration statement filed by the Company
pursuant to Rule 462(b) of the Act, herein referred to as the "Registration
Statement," which shall be deemed to include all information omitted therefrom
in reliance upon Rule 430A and contained in the Prospectus referred to below,
has become effective under the Act, and no post-effective amendment to the
Registration Statement has been filed as of the date of this Agreement. As used
in this Agreement, "Prospectus" means (a) the form of prospectus first filed
with the Commission pursuant to Rule 424(b) or (b) the last preliminary
prospectus included in the Registration Statement filed prior to the time it
becomes effective or filed pursuant to Rule 424(a) under the Act that is
delivered by the Company to the Underwriters for delivery to purchasers of the
Shares, together with any term sheet or abbreviated term sheet filed with the
Commission pursuant to Rule 424(b)(7) under the Act. Each preliminary prospectus
included in the Registration Statement prior to the time it becomes effective is
herein referred to as a "Preliminary Prospectus." Any reference herein to the
Registration Statement, any Preliminary Prospectus or to the Prospectus shall be
deemed to refer to and include any documents incorporated by reference therein
as of the date hereof or the date of the Prospectus, and, in the case of any
reference herein to any Prospectus, also shall be deemed to include any
documents incorporated by reference therein as of the date of the Prospectus,
and any supplements or amendments thereto, filed with the Commission after the
date of filing of the Prospectus under Rules 424(b) or 430A, and prior to the
termination of the offering of the Shares by the Underwriters.
- 2 -
3
(ii) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Tennessee, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement. Each of the subsidiaries of
the Company listed in Schedule III hereto (collectively, the "Subsidiaries") has
been duly organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with corporate power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement. The Subsidiaries are the only
subsidiaries, direct or indirect, of the Company. The Company and each of the
Subsidiaries are duly qualified to transact business in all jurisdictions in
which the conduct of their business requires such qualification, except where
the failure to be so qualified would not have a material adverse effect on the
Company and the Subsidiaries, taken as a whole. The outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable and are owned by the Company or
another Subsidiary free and clear of all liens, encumbrances and equities and
claims, except as described in the Registration Statement, the Prospectus, on
Schedule III hereto or those liens, encumbrances, equities and claims that do
not materially affect the value of such securities; and except as described in
the Registration Statement, the Prospectus or on Schedule III hereto, no
options, warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into shares of capital stock
or ownership interests in the Subsidiaries are outstanding.
(iii) The outstanding shares of Common Stock of the Company, including
all shares to be sold by the Selling Shareholder and the Option Shareholders,
have been duly authorized and validly issued and are fully paid and
non-assessable; the portion of the Shares to be issued and sold by the Company
have been duly authorized and when issued and paid for as contemplated herein
will be validly issued, fully paid and non-assessable; and no preemptive rights
of stockholders exist with respect to any of the Shares or the issue and sale
thereof. Neither the filing of the Registration Statement nor the offering or
sale of the Shares as contemplated by this Agreement gives rise to any rights,
other than those which have been waived or satisfied, for or relating to the
registration of any shares of Common Stock.
(iv) The information set forth under the caption "Capitalization" in
the Prospectus is true and correct in all material respects. All of the Shares
conform in all material respects to the description thereof contained in the
Registration Statement. The form of certificates for the Shares conforms in all
material respects to the corporate law of the jurisdiction of the Company's
incorporation.
(v) The Commission has not issued an order preventing or suspending the
use of any Prospectus relating to the proposed offering of the Shares nor
instituted, to the knowledge of the Company, proceedings for that purpose. The
Registration Statement, when it was declared effective, the Prospectus, when it
is filed with the Commission pursuant to Rule 424(b) and any amendment or
supplement thereto, when it is filed with the Commission, contained or will
contain, all statements that are required to be stated therein by, and will
conform in all material
- 3 -
4
respects to the requirements of the Act and the Rules and Regulations. The
documents incorporated by reference in the Prospectus, at the time filed with
the Commission, conformed in all material respects, to the requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") or the Act, as applicable,
and the rules and regulations of the Commission thereunder. When declared
effective and as of the date hereof, the Registration Statement and any
amendment thereto did not contain, and does not contain, any untrue statement of
a material fact and did not omit, and does not omit, to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading. As of the date it is filed with the Commission pursuant to Rule
424(b) and as of the date hereof, the Prospectus and any amendments and
supplements thereto did not contain, and will not contain, any untrue statement
of material fact; and did not omit, and will not omit, to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company
makes no representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of the Selling Shareholder, any Option
Shareholder, or any Underwriter through the Representatives, specifically for
use in the preparation thereof.
(vi) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules as set forth in the
Registration Statement, present fairly the financial position and the results of
operations and cash flows of the Company and the consolidated Subsidiaries, at
the indicated dates and for the indicated periods. Such financial statements and
related schedules have been prepared in accordance with generally accepted
principles of accounting, consistently applied throughout the periods involved,
except as disclosed therein, and all adjustments necessary for a fair
presentation of results for such periods have been made. The summary financial
and statistical data included or incorporated by reference in the Registration
Statement presents fairly the information shown therein and such data has been
compiled on a basis consistent with the financial statements presented therein
and the books and records of the Company.
(vii) Ernst & Young L.L.P., who have certified certain of the financial
statements filed with the Commission as part of, or incorporated by reference
in, the Registration Statement, are independent public accountants as required
by the Act and the Rules and Regulations.
(viii) There is no action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of the
Subsidiaries before any court or administrative agency or otherwise that if
determined adversely to the Company or any of its Subsidiaries might result in
any material adverse change in the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company and of the Subsidiaries taken as a whole or to prevent the
consummation of the transactions contemplated hereby, except as set forth or
incorporated by reference in the Registration Statement.
- 4 -
5
(ix) The Company and the Subsidiaries have good and marketable title to
all of the properties and assets reflected in the financial statements (or as
described in the Registration Statement or any document incorporated therein by
reference) hereinabove described, subject to no lien, mortgage, pledge, charge
or encumbrance of any kind except those reflected in such financial statements
(or as described in the Registration Statement or any document incorporated
therein by reference) or which are not material in amount. The Company and the
Subsidiaries occupy their leased properties under valid and binding leases
conforming in all material respects to the description thereof set forth in the
Registration Statement or the documents incorporated therein by reference.
(x) The Company and the Subsidiaries have filed all Federal, state,
local and foreign income tax returns that have been required to be filed and
have paid all taxes indicated by said returns and all assessments received by
them or any of them to the extent that such taxes have become due and are not
being contested in good faith, except where the failure to file or pay would not
reasonably be expected to have a material adverse effect of the Company and the
Subsidiaries, taken as a whole. All tax liabilities have been adequately
provided for in the financial statements of the Company.
(xi) Since the respective dates as of which information is given in the
Registration Statement, as it may be amended or supplemented, there has not been
any material adverse change or any development involving a prospective material
adverse change in or affecting the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company and its Subsidiaries taken as a whole, whether or not occurring in
the ordinary course of business, and there has not been any material transaction
entered into or any material transaction that is probable of being entered into
by the Company or the Subsidiaries, other than transactions in the ordinary
course of business and changes and transactions described in the Registration
Statement, as it may be amended or supplemented. The Company and the
Subsidiaries have no material contingent obligations that are not disclosed in
the Company's financial statements that are included or incorporated by
reference in the Registration Statement.
(xii) Neither the Company nor any of the Subsidiaries is, or with the
giving of notice or lapse of time or both will be, in violation of or in default
under its Charter, as amended or restated, or By-Laws, as amended or restated,
or under any agreement, lease, contract, indenture or other instrument or
obligation to which it is a party or by which it, or any of its properties, is
bound and which violation or default would have a material adverse effect on the
condition (financial or otherwise) of the Company and its Subsidiaries taken as
a whole or the business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company and the
Subsidiaries taken as a whole. The execution and delivery of this Agreement and
the consummation of the transactions herein contemplated and the fulfillment of
the terms hereof will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any material indenture,
mortgage, deed of trust or other agreement or instrument to which the Company or
any Subsidiary is a party, or of the Charter, as amended or
- 5 -
6
restated, or By-Laws, as amended or restated, of the Company or any order, rule
or regulation applicable to the Company or any Subsidiary of any court or of any
regulatory body or administrative agency or other governmental body having
jurisdiction.
(xiii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the Commission
or the National Association of Securities Dealers, Inc. (the "NASD")) has been
obtained or made and is in full force and effect.
(xiv) The Company and each of the Subsidiaries holds all material
licenses, certificates and permits from governmental authorities that are
necessary to the conduct of their businesses; and neither the Company nor any of
the Subsidiaries has infringed any patents, patent rights, trade names,
trademarks or copyrights, which infringement is material to the business of the
Company and the Subsidiaries taken as a whole. The Company knows of no material
infringement by others of patents, patent rights, trade names, trademarks or
copyrights owned by or licensed to the Company.
(xv) Neither the Company, nor to the Company's best knowledge, any of
its affiliates, has taken or will take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which would
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of Common Stock to facilitate the sale or resale of the
Shares. The Company acknowledges that the Underwriters may engage in passive
market making transactions in the Shares on the Nasdaq National Market in
accordance with Rule 103 under Regulation M of the Exchange Act.
(xvi) Neither the Company nor any Subsidiary is an "investment company"
within the meaning of such term under the Investment Company Act of 1940, as
amended (the "1940 Act") and the rules and regulations of the Commission
thereunder.
(xvii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xviii) The Company and each of its Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as management of the
Company believes is adequate for the
- 6 -
7
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar industries.
(xix) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, that would cause the loss of
such qualification.
(b) The Selling Shareholder and each of the Option Shareholders,
severally and not jointly, represent and warrant as follows:
(i) The Selling Shareholder or such Option Shareholder at the Closing
Date (as such date is hereinafter defined) will have good and marketable title
to the Firm Shares or the Option Shares, as the case may be, to be sold by the
Selling Shareholder or such Option Shareholder, free and clear of any liens,
encumbrances, equities and claims, and full right, power and authority to effect
the sale and delivery of such Firm Shares or Option Shares, as the case may be;
and upon the delivery of, against payment for, such Firm Shares or Option
Shares, as the case may be, pursuant to this Agreement, the Underwriters will
acquire good and marketable title thereto, free and clear of any liens,
encumbrances, equities and claims.
(ii) The Selling Shareholder or such Option Shareholder has full right,
power and authority to execute and deliver this Agreement and to perform its
obligations under this Agreement. The execution and delivery of this Agreement
and the consummation by the Selling Shareholder or such Option Shareholder of
the transactions herein contemplated and the fulfillment by the Selling
Shareholder or such Option Shareholder of the terms hereof will not require any
consent, approval, authorization, or other order of any court, regulatory body,
administrative agency or other governmental body (except as may be required
under the Act) and will not result in a breach of any of the terms and
provisions of, or constitute a default under, any material indenture, mortgage,
deed of trust or other agreement or instrument to which the Selling Shareholder
or such Option Shareholder is a party, or of any order, rule or regulation
applicable to the Selling Shareholder or such Option Shareholder of any court or
of any regulatory body or administrative agency or other governmental body
having jurisdiction.
(iii) The Selling Shareholder or such Option Shareholder has not taken
and will not take, directly or indirectly, any action designed to, or which has
constituted, or which would reasonably
- 7 -
8
be expected to cause or result in the stabilization or manipulation of the price
of the Common Stock of the Company and, other than as permitted by the Act, the
Selling Shareholder or any Option Shareholder will not distribute any prospectus
or other offering material in connection with the offering of the Shares.
(iv) Without having undertaken to determine independently the accuracy
or completeness of the information contained or incorporated by reference in the
Registration Statement, the Selling Shareholder or such Option Shareholder is
familiar with the Registration Statement and has no knowledge of any material
fact, condition or information not disclosed or incorporated by reference in the
Registration Statement that has adversely affected or will adversely affect the
business of the Company or any of the Subsidiaries taken as a whole; and the
sale of the Firm Shares or Option Shares, as the case may be, by the Selling
Shareholder or such Option Shareholder pursuant hereto is not prompted by any
information concerning the Company or any of the Subsidiaries that is not set
forth in the Registration Statement or the documents incorporated by reference
therein. The information pertaining to the Selling Shareholder or such Option
Shareholder under the captions "Principal and Selling Shareholders" and
"Underwriting" in the Prospectus is complete and accurate in all material
respects.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Company
and the Selling Shareholder agree to sell to the Underwriters and each
Underwriter agrees, severally and not jointly, to purchase, at a price of $_____
per share, the number of Firm Shares set forth opposite the name of each
Underwriter in Schedule I hereof, subject to adjustments in accordance with
Section 9 hereof. The number of Firm Shares to be purchased by each Underwriter
from each Seller shall be as nearly as practicable in the same proportion to the
total number of Firm Shares being sold by each Seller as the number of Firm
Shares being purchased by each Underwriter bears to the total number of Firm
Shares to be sold hereunder. The obligations of the Company and of the Selling
Shareholder shall be several and not joint.
(b) Certificates in negotiable form for the total number of the Shares
to be sold hereunder by the Selling Shareholder have been placed in custody with
Bass, Xxxxx & Xxxx PLC as custodian (the "Custodian") pursuant to the Custody
Agreement and Power of Attorney executed by the Selling Shareholder for delivery
of all Firm Shares to be sold hereunder by the Selling Shareholder. The Selling
Shareholder specifically agrees that the Firm Shares represented by the
certificates held in custody for the Selling Shareholder under the Custody
Agreement and Power of Attorney are subject to the interests of the Underwriters
hereunder, that the arrangements made by the Selling Shareholder for such
custody are to that extent irrevocable, and that the obligations of the Selling
Shareholder hereunder shall not be terminable by any act or deed of the Selling
Shareholder (or by any other person, firm or corporation including the Company,
the Custodian or the Underwriters) or by operation of law (including the death
of the Selling
- 8 -
9
Shareholder) or by the occurrence of any other event or events, except as set
forth in the Custody Agreement and Power of Attorney. If any such event should
occur prior to the delivery to the Underwriters of the Firm Shares hereunder,
certificates for the Firm Shares shall be delivered by the Custodian in
accordance with the terms and conditions of this Agreement as if such event has
not occurred. The Custodian is authorized to receive and acknowledge receipt of
the proceeds of sale of the Shares held by it against delivery of such Shares.
(c) Payment for the Firm Shares to be sold hereunder is to be made in
same day funds via wire transfer to the order of the Company for the shares to
be sold by it and to the order of Bass, Xxxxx & Xxxx PLC as Custodian for the
Selling Shareholder for the shares to be sold by the Selling Shareholder, in
each case against delivery of the Firm Shares to the Representatives for the
several accounts of the Underwriters. Such payment and delivery are to be made
at the offices of BT Alex. Xxxxx Incorporated, 0 Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx, at 10:00 a.m., Baltimore time, on the third business day after the
date of this Agreement or at such other time and date not later than five
business days thereafter as you and the Company shall agree upon, such time and
date being herein referred to as the "Closing Date." As used herein, "business
day" means a day on which the New York Stock Exchange is open for trading and on
which banks in New York are open for business and not permitted by law or
executive order to be closed.
(d) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Option Shareholders listed on Schedule II hereto hereby grant an option to the
several Underwriters to purchase the Option Shares at the price per share as set
forth in the first paragraph of this Section 2. The maximum number of Option
Shares to be sold by the Option Shareholders is set forth opposite their
respective names on Schedule II hereto. The option granted hereby may be
exercised in whole or in part by giving written notice (i) at any time before
the Closing Date and (ii) only once thereafter within 30 days after the date of
this Agreement, by you, as Representatives of the several Underwriters, to the
Company and the Option Shareholders setting forth the number of Option Shares as
to which the several Underwriters are exercising the option, the names and
denominations in which the Option Shares are to be registered and the time and
date at which such certificates are to be delivered. The time and date at which
certificates for Option Shares are to be delivered shall be determined by the
Representatives but shall not be earlier than three nor later than 10 full
business days after the exercise of such option, nor in any event prior to the
Closing Date (such time and date being herein referred to as the "Option Closing
Date"). If the date of exercise of the option is three or more days before the
Closing Date, the notice of exercise shall set the Closing Date as the Option
Closing Date. The number of Option Shares to be purchased by each Underwriter
shall be in the same proportion to the total number of Option Shares being
purchased as the number of Firm Shares being purchased by such Underwriter bears
to the total number of Firm Shares, adjusted by you in such manner as to avoid
fractional shares. The option with respect to the Option Shares granted
hereunder may be exercised only to cover over-allotments in the sale of the Firm
Shares by the Underwriters. You, as Representatives of the several Underwriters,
may cancel such
- 9 -
10
option at any time prior to its expiration by giving written notice of such
cancellation to the Company and the Option Shareholders. To the extent, if any,
that the option is exercised, payment for the Option Shares shall be made on the
Option Closing Date in same day funds via wire transfer to the order of the
custodian for the Option Shareholders against delivery of the Option Shares at
the offices of BT Alex. Xxxxx Incorporated, 0 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx.
The obligations of the Option Shareholders shall be several and not joint.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a public
offering of the Firm Shares as soon as the Representatives deem it advisable to
do so. The Firm Shares are to be initially offered to the public at the initial
public offering price set forth in the Prospectus. The Representatives may from
time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased pursuant
to Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
It is further understood that you will act as the Representatives for
the Underwriters in the offering and sale of the Shares in accordance with a
Master Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. COVENANTS OF THE COMPANY, THE SELLING SHAREHOLDER AND THE OPTION
SHAREHOLDERS.
(a) The Company covenants and agrees with the several Underwriters
that:
(i) The Company will (A) use its reasonable best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule 430A of
the Rules and Regulations is followed, to prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations a Prospectus in a form
approved by the Representatives containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rule 430A of
the Rules and Regulations, (B) not file any amendment to the Registration
Statement or supplement to the Prospectus or document incorporated by reference
therein of which the Representatives shall not previously have been advised and
furnished with a copy or to which the Representatives shall have reasonably
objected in writing or that is not in compliance in all material respects with
the Rules and Regulations and (C) file on a timely basis all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission subsequent to the date of the Prospectus and prior to the
termination of the offering of the Shares by the Underwriters.
(ii) The Company will advise the Representatives promptly (A) when the
Registration Statement or any post-effective amendment thereto shall have become
effective, (B) of receipt of any comments from the Commission, (C) of any
request of the Commission for amendment of the
- 10 -
11
Registration Statement or for supplement to the Prospectus or for any additional
information and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use of the
Prospectus or of the institution of any proceedings for that purpose. The
Company will use its reasonable best efforts to prevent the issuance of any such
stop order preventing or suspending the use of the Prospectus and to obtain as
soon as possible the lifting thereof, if issued.
(iii) The Company will cooperate with the Representatives in
endeavoring to qualify or exempt the Shares for sale under the securities laws
of such jurisdictions as the Representatives may reasonably have designated in
writing and will make such applications, file such documents and furnish such
information as may be reasonably required for that purpose, provided the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is not now so
qualified or required to file such a consent. The Company will, from time to
time, prepare and file such statements, reports, and other documents, as are or
may be required to continue such qualifications or exemptions in effect for so
long a period as the Representatives may reasonably request for distribution of
the Shares.
(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary Prospectus
as the Representatives may reasonably request. The Company will deliver to, or
upon the order of, the Representatives during the period when delivery of a
Prospectus is required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the Representatives may
reasonably request. The Company will deliver to the Representatives at or before
the Closing Date, four (4) signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will deliver to
the Representatives such number of copies of the Registration Statement
(including such number of copies of the exhibits filed therewith that may
reasonably be requested), including documents incorporated by reference therein,
and of all amendments thereto, as the Representatives may reasonably request.
(v) The Company will comply with the Act and the Rules and Regulations,
and the Exchange Act, and the rules and regulations of the Commission
thereunder, so as to permit the completion of the distribution of the Shares as
contemplated in this Agreement and the Prospectus. If during the period in which
a prospectus is required by law to be delivered by an Underwriter or dealer, any
event shall occur as a result of which, in the judgment of the Company, it
becomes necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading, or, if it is necessary
at any time to amend or supplement the Prospectus to comply with any law, the
Company promptly will either (i) prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement to the
Prospectus or (ii) prepare and file with the Commission an appropriate filing
under the Exchange Act that shall be incorporated by reference in the Prospectus
so that the Prospectus as so
- 11 -
12
amended or supplemented will not, in the light of the circumstances existing
when it is so delivered, be misleading, or so that the Prospectus will comply
with the law.
(vi) The Company will make generally available to its security holders,
as soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earnings statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earnings statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 of the Rules and Regulations and will advise you
in writing when such statement has been so made available.
(vii) The Company will, for a period of five years from the Closing
Date, deliver to the Representatives copies of annual reports and copies of all
other documents, reports and information furnished by the Company to its
shareholders or filed with any securities exchange pursuant to the requirements
of such exchange or with the Commission pursuant to the Act or the Exchange Act.
The Company will deliver to the Representatives similar reports with respect to
significant subsidiaries, as that term is defined in the Rules and Regulations,
that are not consolidated in the Company's financial statements.
(viii) No offering, sale or other disposition of any shares of Common
Stock of the Company or other securities convertible into or exchangeable or
exercisable for shares of Common Stock or derivatives of Common Stock (or any
agreement for such) will be made for a period of 90 days after the date of this
Agreement, directly or indirectly, by the Company otherwise than hereunder or
with the prior written consent of BT Alex. Xxxxx Incorporated, except for (i)
shares issued pursuant to the Company's stock incentive and stock purchase plans
approved by the Board of Directors of the Company prior to the date hereof, (ii)
shares issued as consideration for the Company's acquisition of businesses or
(iii) shares issued to the extent necessary to comply with the Internal Revenue
Service Private Letter Ruling issued to the Company in connection with the
spin-off of the Company's truckload carrier business in September 1998.
(ix) The Company will use its reasonable best efforts to list, subject
to notice of issuance, the Shares on the Nasdaq National Market.
(x) The Company will apply the net proceeds of its sale of the Shares
as set forth in the Prospectus.
(xi) The Company will not invest or otherwise use the proceeds received
by it from its sale of the Shares in such a manner as would require the Company
or any of the Subsidiaries to register as an investment company under the 0000
Xxx.
- 12 -
13
(xii) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar for the
Common Stock.
(xiii) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or would reasonably be
expected to constitute, the stabilization or manipulation of the price of any
securities of the Company.
(b) The Selling Shareholder and each of the Option Shareholders,
severally and not jointly, covenant and agree with the several Underwriters
that:
(i) No offering, sale, short sale, transfer, hypothecation, pledge or
other disposition of any shares of Common Stock of the Company or other capital
stock of the Company or other securities convertible, exchangeable or
exercisable for Common Stock or derivative of Common Stock owned by the Selling
Shareholder or the Option Shareholder either of record or beneficially or
request for registration for the offer or sale of any of the foregoing (or as to
which the Selling Shareholder or such Option Shareholder has the right to direct
the disposition of) will be made for a period of 90 days after the date of this
Agreement, directly or indirectly, by the Selling Shareholder or such Option
Shareholder, other than bona fide gifts of shares of Common Stock if the first
donee agrees in writing to be bound by the terms of this Section 4(b)(i),
otherwise than hereunder or with the prior written consent of BT Alex. Xxxxx
Incorporated.
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 and the Interest and Dividend Tax Compliance Act of 1983 with
respect to the transactions herein contemplated, the Selling Shareholder and
each of the Option Shareholders agree to deliver to you prior to or at the
Closing Date a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
(iii) The Selling Shareholder and each of the Option Shareholders will
not take, directly or indirectly, any action designed to cause or result in, or
that has constituted or would reasonably be expected to constitute, the
stabilization or manipulation of the price of any securities of the Company.
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Sellers under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting fees
of the Company; the fees and disbursements of counsel for the Company, the
Selling Shareholder and the Option Shareholders; the cost of printing and
delivering to, or as requested by, the Underwriters copies of the Registration
Statement, Preliminary Prospectuses, the Prospectus, and this Agreement; the
filing fees of the Commission;
- 13 -
14
the filing fee of the NASD; and the Listing Fee of the Nasdaq National Market.
To the extent, if at all, that any of the Option Shareholders engage special
legal counsel to represent them in connection with this offering, the fees and
expenses of such counsel shall be borne by such Option Shareholder. Any transfer
taxes imposed on the sale of the Shares to the several Underwriters will be paid
by Sellers pro rata. The Sellers shall not, however, be required to pay for any
of the Underwriters' expenses (other than those related to qualification under
the NASD's regulations), except that, if this Agreement shall not be consummated
because the conditions in Section 6 hereof are not satisfied, or because this
Agreement is terminated by the Representatives pursuant to Section 11 hereof, or
by reason of any failure, refusal or inability on the part of the Sellers to
perform any undertaking or satisfy any condition of this Agreement or to comply
with any of the terms hereof on their part to be performed, unless such failure
to satisfy said condition or to comply with said terms be due to the default or
omission of any Underwriter, then the Company shall reimburse the several
Underwriters for their reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of performing
their obligations hereunder; but the Sellers shall not in any event be liable to
any of the several Underwriters for damages on account of loss of anticipated
profits from the sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the Firm Shares
on the Closing Date and the Option Shares, if any, on the Option Closing Date
are subject to the accuracy in all material respects, as of the Closing Date or
the Option Closing Date, as the case may be, of the representations and
warranties of the Company, the Selling Shareholder and the Option Shareholders
contained herein, and to the performance by the Company, the Selling Shareholder
and the Option Shareholders of their covenants and obligations hereunder and to
the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule 424
and Rule 430A of the Rules and Regulations shall have been made, and any request
of the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall have been taken or,
to the knowledge of the Company or the Selling Shareholder or any of the Option
Shareholders, shall be contemplated by the Commission and no injunction,
restraining order, or order of any nature by a Federal or state court of
competent jurisdiction shall have been issued as of the Closing Date that would
prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Bass, Xxxxx & Xxxx PLC,
counsel for the Company, the
- 14 -
15
Selling Shareholder and certain of the Option Shareholders, the opinion of
Woolf, McClane, Xxxxxx, Xxxxx & Xxxxxxxxx, PLLC, counsel for the East Tennessee
Foundation, one of the Option Shareholders, and the opinion of Xxxxxxx X.
Xxxxxxx, Esq., Senior Vice President, General Counsel and Secretary of the
Company as to certain matters described in this Section 6, dated the Closing
Date or the Option Closing Date, as the case may be, addressed to the
Underwriters (and both stating that such opinion may be relied upon by counsel
to the Underwriters) to the effect that:
(i) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Tennessee, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement; each of the Subsidiaries
has been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, with corporate
power and authority to own or lease its properties and conduct its business as
described in the Registration Statement; the Company and each of the
Subsidiaries are duly qualified to transact business in all jurisdictions in
which the conduct of their business requires such qualification, or in which the
failure to qualify would have a materially adverse effect upon the business of
the Company and the Subsidiaries taken as a whole; and the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable and are owned by the Company or a
Subsidiary; and, to the best of such counsel's knowledge, except as set forth in
the Registration Statement and the Prospectus or on Schedule III hereto, the
outstanding shares of capital stock of each of the Subsidiaries is owned free
and clear of all perfected liens, encumbrances, equities and claims, and no
options, warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into any shares of capital
stock or of ownership interests in the Subsidiaries are outstanding.
(ii) As of the date specified therein, the Company had authorized and
outstanding capital stock as set forth under the caption "Capitalization" in the
Prospectus; the authorized shares of the Company's Common Stock have been duly
authorized; the outstanding shares of the Company's Common Stock, including the
Shares to be sold by the Option Shareholders, have been duly authorized and
validly issued and are fully paid and non-assessable; all of the Shares conform
in all material respects to the description thereof contained or incorporated by
reference in the Prospectus; the certificates for the Shares, assuming they are
in the form filed with the Commission, are in due and proper form; the shares of
Common Stock to be sold by the Company pursuant to this Agreement have been duly
authorized and will be validly issued, fully paid and non-assessable when issued
and paid for as contemplated by this Agreement; and no preemptive rights of
shareholders exist with respect to any of the Shares or the issue or sale
thereof.
(iii) Except as described in or contemplated by the Prospectus, to the
knowledge of such counsel, there are no outstanding securities of the Company
convertible or exchangeable into or evidencing the right to purchase or
subscribe for any shares of capital stock of the Company and there are no
outstanding or authorized options, warrants or rights of any character
obligating the
- 15 -
16
Company to issue any shares of its capital stock or any securities convertible
or exchangeable into or evidencing the right to purchase or subscribe for any
shares of such stock; and except as described in the Prospectus, to the
knowledge of such counsel, no holder of any securities of the Company or any
other person has the right, contractual or otherwise, that has not been
satisfied or effectively waived, to cause the Company to sell or otherwise issue
to them, or to permit them to underwrite the sale of, any of the Shares or the
right to have any Common Stock or other securities of the Company included in
the Registration Statement or the right, as a result of the filing of the
Registration Statement, to require registration under the Act of any shares of
Common Stock or other securities of the Company.
(iv) The Registration Statement has become effective under the Act,
and, to the best of the knowledge of such counsel, no stop order proceedings
with respect thereto have been instituted or are pending or threatened under the
Act.
(v) The Registration Statement, the Prospectus and each amendment or
supplement thereto and document incorporated by reference therein, as of their
respective effective or filing dates, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as applicable,
and the applicable rules and regulations thereunder (except that such counsel
need express no opinion as to the financial statements and related schedules
included or incorporated by reference therein). The conditions for the use of
Form S-3, set forth in the General Instructions thereto, have been satisfied.
(vi) Such counsel does not know of any contracts or documents required
to be filed as exhibits to or incorporated by reference in the Registration
Statement or described in the Registration Statement or the Prospectus that are
not so filed, incorporated by reference or described as required, and such
contracts and documents as are summarized in the Registration Statement or the
Prospectus are accurately summarized in all material respects.
(vii) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the Subsidiaries
except as set forth or incorporated by reference in the Prospectus.
(viii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, the Charter or By-Laws of the Company, as amended or
restated, or any material agreement or instrument known to such counsel to which
the Company or any of the Subsidiaries is a party or by which the Company or any
of the Subsidiaries may be bound.
(ix) This Agreement has been duly authorized, executed and delivered by
the Company.
- 16 -
17
(x) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body is necessary in connection with the execution and delivery of
this Agreement and the consummation of the transactions herein contemplated
(other than as may be required by the NASD), except such as have been obtained
or made.
(xi) The Company is not, and will not become, as a result of the
consummation of the transactions contemplated by this Agreement, and application
of the net proceeds therefrom as described in the Prospectus, required to
register as an investment company under the 1940 Act.
(xii) This Agreement has been duly authorized, executed and delivered
by or on behalf of the Selling Shareholder and the Option Shareholders.
(xiii) To the knowledge of such counsel, the Selling Shareholder and
each of the Option Shareholders has full legal right, power and authority, and
any approval required by law, to sell, assign, transfer and deliver the portion
of the Shares to be sold by the Selling Shareholder or the Option Shareholder.
(xiv) The Underwriters (assuming that they are bona fide purchasers
within the meaning of the Uniform Commercial Code) have acquired good and
marketable title to the Shares being sold by the Selling Shareholder on the
Closing Date and the Option Shareholders on the Option Closing Date, as the case
may be, free and clear of all liens, encumbrances, equities and claims.
In rendering such opinion, such counsel may rely as to matters governed
by the laws of states other than Tennessee, Delaware or Federal laws on local
counsel in such jurisdictions, provided that in each case Bass, such counsel
shall state that they believe that they and the Underwriters are justified in
relying on such other counsel. In addition to the matters set forth above, the
opinion of Bass, Xxxxx & Xxxx PLC shall also include a statement to the effect
that nothing has come to the attention of such counsel which leads them to
believe that (i) the Registration Statement, at the time it became effective
under the Act (but after giving effect to any modifications incorporated therein
pursuant to Rule 430A under the Act) and as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (ii) the
Prospectus, or any supplement thereto, on the date it was filed pursuant to the
Rules and Regulations and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements, in the light of
the circumstances under which they are made, not misleading (except that such
counsel need express no view as to financial statements, financial schedules or
statistical information therein). With respect to such statement, Bass, Xxxxx &
Xxxx PLC may state that their belief is based upon the procedures set forth
therein, but is without independent check and verification.
- 17 -
18
(c) The Representatives shall have received from Piper & Marbury
L.L.P., counsel for the Underwriters, an opinion dated the Closing Date or the
Option Closing Date, as the case may be, substantially to the effect specified
in subparagraphs (ii), (iii), (iv), (ix) and (xii) of Paragraph (b) of this
Section 6, and that the Company is a duly organized and validly existing
corporation under the laws of the State of Tennessee. In rendering such opinion,
Piper & Marbury L.L.P. may rely as to all matters governed other than by the
laws of Maryland or Delaware or Federal laws on the opinion of counsel referred
to in Paragraph (b) of this Section 6. In addition to the matters set forth
above, such opinion shall also include a statement to the effect that nothing
has come to the attention of such counsel that leads them to believe that (i)
the Registration Statement, or any amendment thereto, as of the time it became
effective under the Act (but after giving effect to any modifications
incorporated therein pursuant to Rule 430A under the Act) as of the Closing Date
or the Option Closing Date, as the case may be, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (ii) the
Prospectus, or any supplement thereto, on the date it was filed pursuant to the
Rules and Regulations and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or omitted to
state a material fact, necessary in order to make the statements, in the light
of the circumstances under which they are made, not misleading (except that such
counsel need express no view as to financial statements, financial schedules or
statistical information therein). With respect to such statement, Piper &
Marbury L.L.P. may state that their belief is based upon the procedures set
forth therein, but is without independent check and verification.
(d) You shall have received, on each of the date hereof, the Closing
Date or the Option Closing Date, as the case may be, a letter dated the date
hereof, the Closing Date or the Option Closing Date, as the case may be, in form
and substance satisfactory to you, of Ernst & Young LLP confirming that they are
independent public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating that in their opinion the
financial statements and schedules examined by them and included in the
Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Act and the related published Rules
and Regulations; and containing such other statements and information as is
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial and statistical
information contained in the Registration Statement and Prospectus.
(e) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
President and the Chief Financial Officer of the Company to the effect that, as
of the Closing Date or the Option Closing Date, as the case may be, each of them
severally represents as follows:
(i) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registration Statement
has been issued, and no
- 18 -
19
proceedings for such purpose have been taken or are, to his knowledge,
contemplated by the Commission;
(ii) The representations and warranties of the Company
contained in Section 1 hereof are true and correct in all material respects as
of the Closing Date or the Option Closing Date, as the case may be;
(iii) All filings required to have been made pursuant to Rules
424 or 430A under the Act have been made;
(iv) He has carefully examined the Registration Statement and
the Prospectus and, in his opinion, as of the effective date of the Registration
Statement and the date the Prospectus was filed with the Commission pursuant to
Rule 424(b), the Registration Statement and the Prospectus, respectively, did
not contain an untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, and since the effective date of the Registration
Statement, no event has occurred that should have been set forth in a supplement
to or an amendment of the Prospectus that has not been so set forth in such
supplement or amendment; and
(v) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been any
material adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of the
Company and its Subsidiaries taken as a whole or the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and the Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business.
(f) The Company, the Selling Shareholder and the Option Shareholders
shall have furnished to the Representatives such further certificates and
documents confirming the representations and warranties, covenants and
conditions contained herein and related matters as the Representatives may
reasonably have requested.
(g) The Firm Shares have been approved for designation upon notice of
issuance on the Nasdaq National Market.
(h) The Company has caused each officer and director to furnish to you,
on or prior to the date of this agreement, a letter or letters, in form and
substance satisfactory to the Underwriters, pursuant to which each such person
has agreed not to offer, sell, sell short, contract to sell, transfer,
hypothecate, pledge or otherwise dispose of any shares of Common Stock of the
Company or other capital stock of the Company, or any other securities
convertible, exchangeable or exercisable for shares of Common Stock or
derivative of shares of Common Stock owned by such person or request the
registration for the offer or sale of any of the foregoing (or as to
- 19 -
20
which such person has the right to direct the disposition of) for a period of 90
days after the date of this Agreement, directly or indirectly, other than gifts
of shares of the Company's common stock if the donee agrees in writing to be
bound by the terms of this Agreement, except with the prior written consent of
BT Alex. Xxxxx Incorporated ("Lockup Agreements"). The Lockup Agreements shall
be in full force and effect.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects reasonably satisfactory to the Representatives and to Piper &
Marbury L.L.P., counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Representatives by notifying the Company, the Selling Shareholder and the
Option Shareholders of such termination in writing at or prior to the Closing
Date or the Option Closing Date, as the case may be.
In such event, the Selling Shareholder, the Option Shareholders, the
Company and the Underwriters shall not be under any obligation to each other
(except to the extent provided in Sections 5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE SELLERS.
The obligations of the Sellers to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date or the Option Closing Date,
as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company and the Selling Shareholder agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act, against any losses, claims, damages or
liabilities to which such Underwriter or any such controlling person may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made; and will reimburse each Underwriter
and each such controlling person upon demand for any legal or other expenses
reasonably incurred by such Underwriter or such controlling person in connection
with investigating or defending any such
- 20 -
21
loss, claim, damage or liability, action or proceeding or in responding to a
subpoena or governmental inquiry related to the offering of the Shares, whether
or not such Underwriter or controlling person is a party to any action or
proceeding; provided, however, that the Company and the Selling Shareholder will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement, or omission or alleged omission made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or through the Representatives specifically for use
in the preparation thereof. The foregoing indemnity agreement with respect to
any Preliminary Prospectus or the Prospectus shall not inure to the benefit of
any Underwriter from whom the person asserting any such losses, claims, damages
or liabilities purchased Shares, or any person controlling such Underwriter, if
a copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage or liability. In
no event, however, shall the liability of the Selling Shareholder for
indemnification under this Section 8(a) exceed the lesser of (i) that proportion
of the total of such losses, claims, damages or liabilities indemnified against
equal to the proportion of the total Shares sold hereunder that is being sold by
the Selling Shareholder, or (ii) the proceeds received by the Selling
Shareholder from the Underwriters in the offering. This indemnity agreement will
be in addition to any liability which the Company and the Selling Shareholder
may otherwise have.
(b) Each of the Option Shareholders, severally and not jointly, agree
to indemnify the Underwriters and each person, if any, who controls any
Underwriter within the meaning of the Act, against any losses, claims, damages
or liabilities to which such Underwriter or controlling person may become
subject under the Act or otherwise, insofar as such losses, claims, damages and
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon (i) any untrue statement of any material fact concerning such Option
Shareholder contained in the Registration Statement, any Preliminary Prospectus,
the Prospectus, or any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact concerning such Option
Shareholder required to be stated therein or necessary to make the statement
therein not misleading in light of the circumstances under which they were made;
and will reimburse each Underwriter and each such controlling person upon demand
for any legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage or liability, action or proceeding or in responding to a subpoena
or governmental inquiry related to the offering of the Shares, whether or not
such Underwriter or controlling person is a party to any action or proceeding;
provided, however, that the Company and such Option Shareholder will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an
- 21 -
22
untrue statement or alleged untrue statement, or omission or alleged omission
made in the Registration Statement, any Preliminary Prospectus, the Prospectus,
or such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for use in the preparation thereof. The foregoing indemnity
agreement with respect to any Preliminary Prospectus or the Prospectus shall not
inure to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
amended or supplemented) would have cured the defect giving rise to such loss,
claim, damage or liability. In no event, however, shall the liability of any
Option Shareholder for indemnification under this Section 8(b) exceed the
proceeds received by such Option Shareholder from the Underwriters in the
offering. This indemnity obligation will be in addition to any liability which
any Option Shareholder may otherwise have.
(c) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, the Selling Shareholder, the Option
Shareholders and each person, if any, who controls the Company within the
meaning of the Act, against any losses, claims, damages or liabilities to which
the Company or any such director, officer, the Selling Shareholder, Option
Shareholder or controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances under which
they were made; and will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, the Selling Shareholder,
Option Shareholder or controlling person upon demand for any legal or other
expenses reasonably incurred by the Company or any such director, officer,
Option Shareholder or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding or in
responding to a subpoena or governmental inquiry relating to the offering of the
Shares, whether or not the Company or any such director, officer, the Selling
Shareholder, Option Shareholder or controlling person is a party to any action
or proceeding; provided, however, that each Underwriter will be liable in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the
- 22 -
23
Company by or through the Representatives specifically for use in the
preparation thereof. This indemnity agreement will be in addition to any
liability that such Underwriter may otherwise have.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 8, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
8(a), (b) or (c) shall be available to any party who shall fail to give notice
as provided in this Section 8(d) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability that it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 8(a), (b) or (c). In case
any such proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party and shall pay as incurred the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred (or within 30 days of
presentation) the fees and expenses of the counsel retained by the indemnified
party in the event (i) the indemnifying party and the indemnified party shall
have mutually agreed to the retention of such counsel, (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them or (iii) the indemnifying party shall have failed to
assume the defense and employ counsel reasonably acceptable to the indemnified
party within a reasonable period of time after notice of commencement of the
action. It is understood that the indemnifying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by you in the case
of parties indemnified pursuant to Section 8(a) or (b) and by the Company and
the Option Shareholders in the case of parties indemnified pursuant to Section
8(c). The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or
- 23 -
24
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action or proceeding.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company, the
Selling Shareholder and the Option Shareholders on the one hand and the
Underwriters on the other hand from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company, the Selling Shareholder and the Option Shareholders on the one hand and
the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, (or
actions or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Selling Shareholder and the Option Shareholders on the one hand and the
Underwriters on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company, the Selling Shareholder and the Option Shareholders bear to the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Selling Shareholder or the Option Shareholders on the one hand or
the Underwriters on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Selling Shareholder, each of the Option Shareholders
and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 8(e) 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 that does not take account of the
equitable considerations referred to above in this Section 8(e). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in
this Section 8(e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (e), (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter, (ii) no person guilty of
- 24 -
25
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation and (iii) the Selling Shareholder or any of the
Option Shareholders shall not be required to contribute any amount in excess of
the lesser of (A) that proportion of the total of such losses, claims, damages
or liabilities indemnified or contributed against equal to the proportion of the
total Shares sold hereunder that are being sold by the Selling Shareholder or
the Option Shareholders or (B) the proceeds received by the Selling Shareholder
or any of the Option Shareholders from the Underwriters in the offering. The
Underwriters' obligations in this Section 8(e) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(f) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any persons
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder and (iii) any termination of this Agreement. A successor to any
Underwriter, or to the Company, the Selling Shareholder, the Option
Shareholders, its directors or officers, or any person controlling the Company,
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 8.
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case may be,
any Underwriter shall fail to purchase and pay for the portion of the Shares
that such Underwriter has agreed to purchase and pay for on such date (otherwise
than by reason of any default on the part of the Company, the Selling
Shareholder or any Option Shareholder), you, as Representatives of the
Underwriters, shall use your reasonable efforts to procure within 36 hours
thereafter one or more of the other Underwriters, or any others, to purchase
from the Company, the Selling Shareholder and each of the Option Shareholders
such amounts as may be agreed upon and upon the terms set forth herein, the Firm
Shares or Option Shares, as the case may be, that the defaulting Underwriter or
Underwriters failed to purchase. If during such 36 hours you, as such
- 25 -
26
Representatives, shall not have procured such other Underwriters, or any others,
to purchase the Firm Shares or Option Shares, as the case may be, agreed to be
purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of shares with respect to which such default shall occur does
not exceed 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the other Underwriters shall be obligated, severally, in proportion to
the respective numbers of Firm Shares or Option Shares, as the case may be, that
they are obligated to purchase hereunder, to purchase the Firm Shares or Option
Shares, as the case may be, that such defaulting Underwriter or Underwriters
failed to purchase or (b) if the aggregate number of Firm Shares or Option
Shares, as the case may be, with respect to which such default shall occur
exceeds 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the Company, the Selling Shareholder and the Option Shareholders or you
as the Representatives of the Underwriters will have the right, by written
notice given within the next 36-hour period to the parties to this Agreement, to
terminate this Agreement without liability on the part of the non-defaulting
Underwriters or of the Company or of the Selling Shareholder or of the Option
Shareholders except to the extent provided in Section 8 hereof. In the event of
a default by any Underwriter or Underwriters, as set forth in this Section 9,
the Closing Date or Option Closing Date, as the case may be, may be postponed
for such period, not exceeding seven days, as you, as Representatives, may
determine in order that the required changes in the Registration Statement or in
the Prospectus or in any other documents or arrangements may be effected. The
term "Underwriter" includes any person substituted for a defaulting Underwriter.
Any action taken under this Section 9 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or telegraphed
and confirmed as follows: if to the Underwriters, to BT Alex. Xxxxx
Incorporated, 0 Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxx,
Managing Director; with a copy to BT Alex. Xxxxx Incorporated, 0 Xxxxx Xxxxxx,
Xxxxxxxxx, XX 00000, Attention: General Counsel; if to the Company, the Selling
Shareholder or the Option Shareholders, to Forward Air Corporation, 000 Xxxxxxx
Xxxx, Xxxxxxxxxx, XX 00000 Attention: Xxxxxxx X. Xxxxxxx, Senior Vice President;
with a copy to Bass, Xxxxx & Xxxx PLC, 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, XX
00000, Attention: Xxxxx Xxxxxx, Esq.
11. TERMINATION.
This Agreement may be terminated by you by notice to the Sellers as
follows:
(a) at any time prior to the earlier of (i) the time the Shares are
released by you for sale by notice to the Underwriters or (ii) 11:30 a.m. on the
date of this Agreement;
- 26 -
27
(b) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or any
development involving a prospective material adverse change in or affecting the
condition, financial or otherwise, of the Company and its Subsidiaries taken as
a whole or the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
its Subsidiaries taken as a whole, whether or not arising in the ordinary course
of business; (ii) any outbreak or escalation of hostilities or declaration of
war or national emergency or other national or international calamity or crisis
or change in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in your reasonable judgment would make it
impracticable to market the Shares or to enforce contracts for the sale of the
Shares; (iii) trading generally shall have been suspended or materially limited
on or by, as the case may be, any of the New York Stock Exchange, the American
Stock Exchange, the NASD, the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade; (iv) the enactment,
publication, decree or other promulgation of any statute, regulation, rule or
order of any court or other governmental authority which in your opinion
materially and adversely affects or may materially and adversely affect the
business or operations of the Company; (v) declaration of a banking moratorium
by United States or New York State authorities; (vi) any downgrading in the
rating of the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Exchange Act); (vii) the suspension of trading of the Company's Common Stock
on the Nasdaq National Market; or (viii) the taking of any action by any
governmental body or agency in respect of its monetary or fiscal affairs that in
your reasonable opinion has a material adverse effect on the securities markets
in the United States or would make it impracticable to market the Shares or to
enforce contracts for the sale of the Shares; or
(c) as provided in Sections 6 and 9 of this Agreement.
12. SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Company, the Selling Shareholder and each of the Option
Shareholders and their respective successors, executors, administrators, heirs
and assigns, and the officers, directors and controlling persons referred to
herein, and no other person will have any right or obligation hereunder. No
purchaser of any of the Shares from any Underwriter shall be deemed a successor
or assign merely because of such purchase.
13. INFORMATION PROVIDED BY UNDERWRITERS.
The Company, the Selling Shareholder, each of the Option Shareholders
and the Underwriters acknowledge and agree that the only information furnished
or to be furnished by any
- 27 -
28
Underwriter to the Company for inclusion in any Prospectus or the Registration
Statement consists of the information set forth in the last paragraph on the
front cover page (insofar as such information relates to the Underwriters),
legends required by Item 502(d) of Regulation S-K under the Act and the
information under the caption "Underwriting" in the Prospectus.
14. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers, the Selling Shareholder or the Option Shareholders
and (c) delivery of and payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Maryland.
- 28 -
29
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Option Shareholders, the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
FORWARD AIR CORPORATION
By:
---------------------------------
Name:
----------------
Title:
---------------
XXXXX X. XXXXXXXXX
By:
---------------------------------
Attorney-In-Fact
OPTION SHAREHOLDERS
By:
---------------------------------
Attorney-In-Fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
BT ALEX. XXXXX INCORPORATED
XXXXXX XXXXXX & COMPANY, INC.
XXXXX AND XXXXXXXXXXXX, INC.
As Representatives of the several
Underwriters listed on Schedule I
By: BT Alex. Xxxxx Incorporated
By:
------------------------------
Authorized Officer
- 29 -
30
SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------
BT Alex. Xxxxx Incorporated
Xxxxxx Xxxxxx & Company, Inc.
Xxxxx and Xxxxxxxxxxxx, Inc.
----------
Total 3,000,000
==========
- 30 -
31
SCHEDULE II
SCHEDULE OF OPTION SHARES
Maximum Number Percentage of
of Option Shares Total Number of
Name of Seller to be Sold Option Shares
-----------------------------------------------------------------------
Total 450,000 100%
=======
- 31 -
32
SCHEDULE III
SCHEDULE OF SUBSIDIARIES AND ENCUMBRANCES
- 32 -
