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EXHIBIT 1.1
5,200,000 SHARES
TEAM RENTAL GROUP, INC.
CLASS A COMMON STOCK
UNDERWRITING AGREEMENT
April [ ], 1997
CREDIT SUISSE FIRST BOSTON CORPORATION
ABN AMRO CHICAGO CORPORATION
ALEX. XXXXX & SONS INCORPORATED
XxXXXXXX & COMPANY SECURITIES, INC.,
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Xxxxxxx Xxxxxx,
Xxx Xxxx, X.X. 00000.
Dear Sirs:
1. Introductory. Team Rental Group, Inc., a Delaware corporation
("Company"), proposes to issue and sell ("U.S. Offering") to the several
Underwriters named in Schedule A hereto ("Underwriters") 5,200,000 shares ("U.S.
Firm Securities") of its Class A Common Stock, par value $.01 per share ("Class
A Common Stock" or "Securities"). Credit Suisse First Boston Corporation
("CSFBC"), ABN AMRO Chicago Corporation, Alex. Xxxxx & Sons Incorporated and
XxXxxxxx & Company Securities, Inc. will act as representatives
("Representatives") of the Underwriters.
The Company is concurrently entering into a Subscription Agreement,
dated the date hereof ("Subscription Agreement"), with Credit Suisse First
Boston (Europe) Limited ("CSFBEL"), ABN AMRO Xxxxxxxxxx, Xxxx. Xxxxx & Sons
International, XxXxxxxx & Company Securities, Inc. and the other managers named
therein ("Managers") relating to the concurrent issuance and sale of 1,300,000
shares of Securities ("International Firm Securities") outside the United States
and Canada ("International Offering" and, together with the U.S. Offering, the
"Offerings").
In addition, as set forth below, the Company proposes to issue and sell
(i) to the Underwriters, at the option of the Underwriters, an aggregate of not
more than 780,000 additional shares of Securities ("U.S. Optional Securities")
and (ii) to the Managers, at the option of the Managers, an aggregate of not
more than 195,000 additional shares of Securities ("International
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Optional Securities"). The U.S. Firm Securities and the U.S. Optional Securities
are hereinafter called the "U.S. Securities"; the International Firm Securities
and the International Optional Securities are hereinafter called the
"International Securities"; the U.S. Firm Securities and the International Firm
Securities are hereinafter called the "Firm Securities"; the U.S. Optional
Securities and the International Optional Securities are hereinafter called the
"Optional Securities". The U.S. Securities and the Inter national Securities are
collectively referred to as the "Offered Securities". To provide for the
coordination of their activities, the Underwriters and the Managers have entered
into an Agreement Between U.S. Underwriters and Managers which permits them,
among other things, to sell the Offered Securities to each other for purposes of
resale.
The Offered Securities are being issued and sold in connection with the
consummation of the transactions contemplated by stock purchase agreements, each
dated as of January 13, 1997 (the "Stock Purchase Agreements"), by and among the
Company, Ford Motor Company ("Ford"), Budget Rent a Car Corporation ("BRACC")
and the other stockholders of BRACC, pursuant to which the Company has agreed,
subject to certain conditions, to acquire all the capital stock of BRACC (the
"Acquisition"). In connection with the Acquisition and concurrently with the
consummation of the Offerings: (i) BRACC proposes to privately place $125.0
million aggregate principal amount of its __% Guaranteed Senior Notes due 2007
(the "Senior Notes"), (ii) the Company proposes to enter into new credit
facilities for fleet financings (the "New Fleet Financing Credit Agreements")
with an aggregate commitment of $1.3 billion, (iii) the Company proposes to
privately place $50.0 million aggregate principal amount of its __% Convertible
Subordinated Notes, Series B, due 2007 (the "Series B Notes") and (iv) the
Company will issue 4,500 shares of Series A Convertible Preferred Stock (the
"Series A Preferred Stock") to Ford as part of the consideration for the
Acquisition.
As used in Section 2 and Section 6(e) only of this Agreement,
references to (i) the term "Budget Group" mean Team Rental Group, Inc.,
including its subsidiaries after giving effect to the Acquisition (as defined
below); (ii) the term "Company" mean Team Rental Group, Inc. prior to the
Acquisition, on a stand-alone basis and excluding any subsidiaries; (iii) the
term "BRACC" mean Budget Rent a Car Corporation, prior to the Acquisition, on a
stand-alone basis and excluding any subsidiaries; (iv) the term "Resulting
Company" mean Team Rental Group, Inc. after giving effect to the Acquisition, on
a stand-alone basis and excluding any subsidiaries; and (v) the term
"Subsidiaries" mean all significant subsidiaries of the Resulting Company, as
defined in Rule 1-02(w) of Regulation S-X promulgated under the Securities Act
of 1933 (each of the Subsidiaries referred to in this clause (v), a
"Subsidiary").
The Company hereby agrees with the several Underwriters as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333-21691) relating to the
Offered Securities, including a form of prospectus relating to the U.S.
Securities and a form of prospectus relating to the International
Securities, has been filed with the Securities and Exchange Commission
("Commission") and either (i) has been declared effective under the
Securities Act of 1933 ("Act") and is not proposed to be amended or
(ii) is proposed to be amended
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by amendment or post-effective amendment. If such registration
statement (the "initial registration statement") has been declared
effective, either (A) an additional registration statement (the
"additional registration statement") relating to the Offered Securities
may have been filed with the Commission pursuant to Rule 462(b) ("Rule
462(b)") under the Act and, if so filed, has become effective upon
filing pursuant to such Rule and the Offered Securities all have been
duly registered under the Act pursuant to the initial registration
statement and, if applicable, the additional registration statement or
(B) such an additional registration statement is proposed to be filed
with the Commission pursuant to Rule 462(b) and will become effective
upon filing pursuant to such Rule and upon such filing the Offered
Securities will all have been duly registered under the Act pursuant to
the initial registration statement and such additional registration
statement. If the Company does not propose to amend the initial
registration statement or if an additional registration statement has
been filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has been
filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the
Act or, in the case of the additional registration statement, Rule
462(b). For purposes of this Agreement, "Effective Time" with respect
to the initial registration statement or, if filed prior to the
execution and delivery of this Agreement, the additional registration
statement means (i) if the Company has advised the Representatives that
it does not propose to amend such registration statement, the date and
time as of which such registration statement, or the most recent
post-effective amendment thereto (if any) filed prior to the execution
and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c),
or (ii) if the Company has advised the Representatives that it proposes
to file an amendment or post-effective amendment to such registration
statement, the date and time as of which such registration statement,
as amended by such amendment or post-effective amendment, as the case
may be, is declared effective by the Commission. If an additional
registration statement has not been filed prior to the execution and
delivery of this Agreement but the Company has advised the
Representatives that it proposes to file one, "Effective Time" with
respect to such additional registration statement means the date and
time as of which such registration statement is filed and becomes
effective pursuant to Rule 462(b). "Effective Date" with respect to the
initial registration statement or the additional registration statement
(if any) means the date of the Effective Time thereof. The initial
registration statement, as amended at its Effective Time, including all
information contained in the additional registration statement (if any)
and deemed to be a part of the initial registration statement as of the
Effective Time of the additional registration statement pursuant to the
General Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b) ("Rule
430A(b)") under the Act, is hereinafter referred to as the "Initial
Registration Statement". The additional registration statement (if
any), as amended at its Effective Time, including the contents of the
initial registration statement incorporated by reference therein and
including all information (if any) deemed to be a part of the
additional registration statement as of its Effective Time pursuant to
Rule 430A(b), is hereinafter referred to as the "Additional
Registration Statement". The Initial Registration Statement and the
Additional Registration Statement are hereinafter referred
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to collectively as the "Registration Statements" and individually as a
"Registration Statement". The form of prospectus relating to the U.S.
Securities and the form of prospectus relating to the International
Securities, each as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no
such filing is required) as included in the Registration Statement, are
hereinafter referred to as the "U.S. Prospectus" and the "International
Prospectus", respectively, and collectively as the "Prospectuses". No
document has been or will be prepared or distributed in reliance on
Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement: (i)
on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all material respects to
the requirements of the Act and the rules and regulations of the
Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (ii) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement conformed,
or will conform, in all material respects to the requirements of the
Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and (iii)
on the date of this Agreement, the Initial Registration Statement and,
if the Effective Time of the Additional Registration Statement is prior
to the execution and delivery of this Agreement, the Additional
Registration Statement each conforms, and at the time of filing of each
of the Prospectuses pursuant to Rule 424(b) or (if no such filing is
required) at the Effective Date of the Additional Registration
Statement in which the Prospectuses are included, each Registration
Statement and each of the Prospectuses will conform, in all material
respects to the requirements of the Act and the Rules and Regulations,
and none of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of
this Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and each of the
Prospectuses will conform in all material respects to the requirements
of the Act and the Rules and Regulations, none of such documents will
include any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading, and no Additional Registration
Statement has been or will be filed. The two preceding sentences do not
apply to statements in or omissions from a Registration Statement or
either of the Prospectuses based upon written information furnished to
the Company by any Underwriter through the Representatives or by any
Manager through CSFBEL specifically for use therein, it being
understood and agreed that the only such information is that described
as such in Section 7(b).
(c) Each of the Company, BRACC and each Subsidiary has been
duly incorporated 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 its properties and conduct
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its business as described in the Registration Statement and the
Prospectuses, and is duly qualified to do business as a foreign
corporation in good standing (to the extent such concepts are
recognized in such jurisdictions) in all other jurisdictions in which
it owns or leases substantial properties or in which the conduct of its
business requires such qualification, except where the failure to so
qualify would not have a material adverse effect upon the condition
(financial or other), results of operations, business affairs or
business prospects of the Budget Group (a "Material Adverse Effect").
The Subsidiaries are listed on Schedule B hereto.
(d) All of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued and is fully
paid and nonassessable; and the capital stock of each Subsidiary owned
by the Company or BRACC, directly or through subsidiaries, is owned
free from liens, encumbrances and defects.
(e) The Company's authorized capitalization is as set forth in
the Registration Statement and the Prospectuses; the Offered
Securities, the Series A Preferred Stock, and all the outstanding
shares of Class A Common Stock and Class B Common Stock of the Company,
par value $.01 per share ("Class B Common Stock") , have been duly
authorized; all outstanding shares of such capital stock of the Company
are, and, when the Offered Securities have been delivered and paid for
in accordance with this Agreement and the Subscription Agreement on
each Closing Date (as defined below), such Offered Securities will have
been, validly issued, fully paid and nonassessable and will conform to
the description thereof contained in the Prospectuses; and the Offered
Securities have been approved for listing on the New York Stock
Exchange subject to notice of issuance.
(f) Except for (i) the 4,500 shares of Series A Preferred
Stock, which are convertible into 4,500,000 shares of Class A Common
Stock, (ii) the 1,936,600 shares of Class B Common Stock, which are
convertible into 1,936,600 shares of Class A Common Stock, (iii) the
warrant held by BRACC to purchase 175,000 shares of Class A Common
Stock (the "BRACC Warrant"), (iv) the warrant held by NationsBank,
National Association (South) to purchase 187,500 shares of Class A
Common Stock (the "NationsBank Warrant"), (v) the options to purchase
729,850 shares of Class A Common Stock and Class B Common Stock issued
under the Company's 1994 Incentive Stock Option Plan (the "1994 Option
Plan"), (vi) the options to purchase 70,000 shares of Class A Common
Stock issued under the Company's 1994 Directors' Stock Option Plan (the
"1994 Directors' Plan"), (vii) the $80.0 million aggregate principal
amount of Series A Convertible Subordinated Notes of the Company (the
"Series A Notes"), which are convertible into 3,986,049 shares of Class
A Common Stock and (viii) the $50.0 million aggregate principal amount
of Series B Notes, which are convertible into 1,428,571 shares of Class
A Common Stock, each as described in the Registration Statement and the
Prospectuses, and except for the conditional rights to acquire
additional shares of Class A Common Stock contained in the agreement
dated October 20, 1995 among the Company, Team Rental of Southern
California, Inc., BRAC-OPCO, Inc., and Budget Rent a Car of Southern
California (the "OPCO Agreement"), there are no, and as of each Closing
Date (as defined in Section 3) there will be no, outstanding securities
or obligations (together, "Convertible Securities") of the Company, the
Resulting Company or any Subsidiary convertible into or exchangeable
for any capital stock of the
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Company, the Resulting Company or any Subsidiary, respectively, rights,
warrants or options (together, "Rights") to subscribe for or purchase
from the Company, the Resulting Company or any Subsidiary any such
capital stock or any such Convertible Securities or obligations, or
obligations of the Company, the Resulting Company or any Subsidiary to
issue Convertible Securities or Rights.
(g) Except for (i) the rights of first refusal set forth in
the Share Exchange Agreement dated April 25, 1994, as amended on June
13, 1994 and July 5, 1994, among the Company, Xxxxx Xxxxxxx, Xxxxxxx
Xxxxxxx, Xxxxxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx and Xxxxxxx
Xxxxx, (ii) the rights of Xxxxx Xxxxxxx and Xxxxxx Xxxxxxx to receive
additional shares of Class A Common Stock, as set forth in the
agreement, dated March 8, 1995, among the Company, Team Rental of
Connecticut, Inc., Rental Car Resources, Inc., Xxxxx Xxxxxxx and Xxxxxx
Xxxxxxx, (iii) the put right set forth in the BRACC Warrant, (iv) the
rights of first refusal held by BRACC pursuant to certain of its
franchise agreements with the Company, (v) the rights of the parties to
the OPCO Agreement and (vi) the rights of Ford under the Stock Purchase
Agreements, there are no preemptive or other rights to subscribe for or
purchase any shares of capital stock issued by the Company, the
Resulting Company or any Subsidiary. Except for the transfer
restrictions set forth in the Registration Rights Agreements (as
defined below), Section 5(i) of this Agreement, BRACC's right to
approve certain transfers of capital stock held by Messrs. Miller,
Kennedy, Congdon, Britton, Xxxxxx and Xxxxx pursuant to the letter
agreement dated May 5, 1994 among such officers and BRACC and the
voting restrictions set forth in the Shareholders' Agreement dated
October 20, 1995 among the Company, the holders of Class B Common Stock
and Budget Rent a Car of Southern California ("SOCAL"), there are, and
after giving effect to the Acquisition there will be, no restrictions
to which the Company or the Resulting Company is a party upon the
voting or transfer of, and no restrictions on the declaration or
payment of any dividend or distribution on, any shares of capital stock
of the Company, the Resulting Company, BRACC or any Subsidiary.
(h) No broker, finder, consultant or other person or entity is
entitled to any brokerage, finder's or other fee or commission in
connection with the issuance and sale of the Offered Securities, except
such fee or commission as may be provided to the Underwriters or the
Managers by the express terms of this Agreement.
(i) Except for certain agreements regarding registration
rights described in each of the Prospectuses and filed as exhibits to
the Registration Statement (collectively, the "Registration Rights
Agreements"), there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company or the Resulting Company to file a registration
statement under the Act with respect to any securities of the Company
or the Resulting Company owned or to be owned by such person or to
require the Company or the Resulting Company to include such securities
in the securities registered pursuant to a registration statement or in
any securities being registered pursuant to any other registration
statement filed by the Company or the Resulting Company under the Act;
and the Company has given proper notice to, or received written waivers
or demand notices from, each person holding such registration rights
pursuant to the Registration Rights Agreements.
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(j) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this Agreement
or the Subscription Agreement in connection with the issuance and sale
of the Offered Securities by the Company, except such as have been
obtained and made under the Act and the Rules and Regulations and such
as may be required under state securities laws.
(k) The execution, delivery and performance of this Agreement
and the Subscription Agreement, and the issuance and sale of the
Offered Securities will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under (i) any
statute, rule, regulation or order of any governmental agency or body
or any court, domestic or foreign, having jurisdiction over the
Company, the Resulting Company or any Subsidiary or any of their
properties, (ii) any agreement or instrument to which the Company, the
Resulting Company or any such Subsidiary is a party or by which the
Company, the Resulting Company or any such Subsidiary is bound or to
which any of the properties of the Company, the Resulting Company or
any such Subsidiary is subject, or (iii) the charter or by-laws of the
Company or any such Subsidiary, except in the case of clause (i) or
(ii), such breaches, violations or defaults that, individually or in
the aggregate, would not have a Material Adverse Effect. The Company
has full power and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement and the Subscription
Agreement, respectively.
(l) This Agreement and the Subscription Agreement have been
duly authorized, executed and delivered by the Company.
(m) The execution, delivery and performance by the Company,
the Resulting Company, BRACC and their respective subsidiaries of the
Stock Purchase Agreements, the New Fleet Financing Credit Agreements,
the purchase agreement and indenture for the Senior Notes (the "Senior
Notes Agreements") and the purchase agreement and indenture for the
Series B Notes (the "Series B Agreements") (to the extent a party
thereto) and the issuance and sale of the Senior Notes and the Series B
Notes will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (i) any statute, rule,
regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company, the
Resulting Company, BRACC or any Subsidiary or any of their respective
properties, (ii) any agreement or instrument to which the Company, the
Resulting Company, BRACC or any such Subsidiary is a party or by which
the Company, the Resulting Company, BRACC or any such Subsidiary is
bound or to which any of the respective properties of the Company, the
Resulting Company, BRACC or any such Subsidiary is subject, or (iii)
the charter or by-laws of the Company, BRACC or any such Subsidiary,
except in the case of clause (i) or (ii), such breaches, violations or
defaults that, individually or in the aggregate, would not have a
Material Adverse Effect. BRACC has the power and authority to
authorize, issue and sell the Senior Notes pursuant to the Senior Notes
Agreements. The Company has the power and authority to authorize, issue
and sell the Series B Notes pursuant to the Series B Agreements.
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(n) The Stock Purchase Agreements have been duly authorized,
executed and delivered by each of the Company and BRACC and conform in
all material respects to the descriptions thereof in the Prospectuses.
The Senior Notes Agreements and the Series B Agreements have been duly
authorized, executed and delivered by BRACC and the Company,
respectively, and the parties thereto and conform in all material
respects to the descriptions thereof in the Prospectuses. The Stock
Purchase Agreements, the Senior Notes Agreements and the Series B
Agreements, assuming due execution and delivery by the other parties
thereto, constitute valid and legally binding obligations of the
Company and BRACC (as the case may be) and are enforceable in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, except that the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and the discretion of courts in
granting equitable remedies and except that the enforceability of any
rights to indemnity or contribution may be limited by federal or state
securities laws or by public policy.
(o) The Company has delivered to CSFBC true and correct copies
of the Stock Purchase Agreements, in each case, in the form as
originally executed, and there have been no amendments or waivers
thereto or in the exhibits or schedules thereto other than those as to
which CSFBC shall have been advised.
(p) The Company, BRACC and the Subsidiaries have (i) such
ownership and possession rights with respect to their respective assets
and properties as are necessary for the continuing conduct of their
respective businesses, as described in the Registration Statement and
the Prospectuses, except where the failure to possess any such rights
would not, individually or in the aggregate, have a Material Adverse
Effect, and (ii) peaceful and undisturbed possession under all material
leases to which the Company, BRACC or any such Subsidiary is a party as
lessee; and all material leases to which the Company, BRACC or any such
Subsidiary is a party are in full force and effect; none of the
Company, BRACC or any Subsidiary has been notified that a lease is
invalid or unenforceable, and no default by the Company, BRACC or such
Subsidiary has occurred and is continuing thereunder, except for any
defaults that would not, individually or in the aggregate, have a
Material Adverse Effect.
(q) The Company, BRACC and the Subsidiaries hold such
licenses, certificates and permits from governmental entities and
authorities as are necessary to the conduct of the business of the
Company, the Resulting Company, BRACC and the Subsidiaries as described
in the Registration Statement and the Prospectuses, the failure of
which to obtain would have a Material Adverse Effect; the Company,
BRACC and the Subsidiaries have fulfilled and performed all of the
material obligations necessary to maintain such licenses, certificates
and permits, except where the failure to perform such obligations would
not have a Material Adverse Effect; the Company, BRACC and the
Subsidiaries conduct their business in compliance with all applicable
federal, state and local laws and regulations, except where the failure
to perform such obligations would not have a Material Adverse Effect;
and there is no pending or, to the knowledge of the Company, threatened
action, suit,
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proceeding or investigation that could lead to the revocation,
termination or suspension of any such license, certificate or permit.
(r) To the knowledge of the Company, none of the Company,
BRACC or any Subsidiary is engaged in any unfair labor practice that
would have a Material Adverse Effect. There is no unfair labor practice
complaint pending or, to the best knowledge of the Company, threatened
against the Company, BRACC or any Subsidiary before the National Labor
Relations Board, and no grievance or arbitration proceeding arising out
of or under collective bargaining agreements is pending or, to the
knowledge of the Company, threatened except such complaints or
proceedings as would not have a Material Adverse Effect. No strike,
labor dispute, slowdown or stoppage is pending or, to the knowledge of
the Company after due inquiry, threatened against the Company, BRACC or
any Subsidiary.
(s) The Company, the Resulting Company, BRACC and the
Subsidiaries own, possess or can acquire on reasonable terms, adequate
trademarks and trade names necessary to conduct the business now
operated by them, or presently employed by them, and have not received
any notice of infringement of or conflict with asserted rights of
others with respect to such rights that, if determined adversely to the
Company, the Resulting Company, BRACC or any such Subsidiary, would,
individually or in the aggregate, have a Material Adverse Effect.
(t) To the knowledge of the Company, each of the Company,
BRACC and the Subsidiaries has obtained all permits, licenses and other
authorizations and has made all registrations and other submissions
that are required under all applicable federal, state and local laws
relating to the protection of health, safety or the environment
including but not limited to the Federal Water Pollution Control Act
(33 U.S.C. ss. 1251 et seq.), Resource Conservation and Recovery Act
(42 U.S.C. ss.6901 et seq.), Safe Drinking Water Act (21 U.S.C. ss.349,
42 U.S.C. xx.xx. 300f - 300j), Toxic Substances Control Act (15 U.S.C.
ss.2601 et seq.), Clean Air Act (42 U.S.C. ss.7401 et seq.),
Comprehensive Environmental Response, Compensation and Liability Act
(42 U.S.C. ss.9601 et seq.), any laws relating to emissions,
discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or
wastes into the environment (including but not limited to ambient air,
surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances or wastes, and any
regulation, code, plan, order, decree, judgment, injunction, notice or
demand letter issued, entered, promulgated or approved thereunder
(collectively, the "Environmental Laws"), except to the extent that
failure to have any such permit, license or authorization, or to have
made such registration or submission, individually or in the aggregate,
does not have a Material Adverse Effect.
(u) Except as described in the Registration Statement and the
Prospectuses, each of the Company, BRACC and the Subsidiaries has been
and is in compliance with all terms and conditions of any required
permits, licenses and authorization, and has been and is in compliance
with all other limitations, restrictions, conditions, standards,
prohibitions,
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requirements, obligations, schedules and timetables contained in the
Environmental Laws, except to the extent failure to comply would not
have a Material Adverse Effect.
(v) To the best knowledge of the Company, (i) there are no
past or present events, conditions, circumstances, activities,
practices, incidents or actions, or plans relating to the business as
presently being conducted by the Company, BRACC or the Subsidiaries,
that interfere with or prevent compliance or continued compliance with
the Environmental Laws, or that would be reasonably likely to give rise
to any legal liability (whether statutory or at common law) or
otherwise would be reasonably likely to form the basis of any claim,
action, demand, suit, proceeding, hearing, lien, notice of violation,
study, investigation, remediation or cleanup (collectively, "Claims")
based on or related to any Environmental Law or the generation,
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge, release
into the workplace, the community or the environment of any pollutant,
contaminant, chemical or industrial, toxic or hazardous substance or
waste, except for any liabilities or any Claims that will not,
individually or in the aggregate, have a Material Adverse Effect, and
(ii) except as disclosed in the Registration Statement and the
Prospectuses, no underground or aboveground storage tanks are located
on property owned or leased by the Company, BRACC or the Subsidiaries.
(w) There are no Claims pending or, to the best knowledge of
the Company, threatened against the Company, BRACC or any Subsidiary
based on or related to any Environmental Law or the generation,
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge, release
into the workplace, the community or the environment of any pollutant,
contaminant, chemical or industrial, toxic, or hazardous substance or
waste, and none of the Company, BRACC or any Subsidiary has received
any notice of violation or potential liability based on or related to
any Environmental Law or the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling,
or the emission, discharge, release into the workplace, the community
or the environment of any pollutant, contaminant, chemical or
industrial, toxic, or hazardous substance or waste, except for any
Claim or notice that will not, individually or in the aggregate, have a
Material Adverse Effect.
(x) Except as disclosed in the Registration Statement and the
Prospectuses, there are no pending actions, suits or proceedings
against or affecting the Company, BRACC, any Subsidiary or any of their
respective properties that, if determined adversely to the Company, the
Resulting Company, BRACC or such Subsidiary, would have a Material
Adverse Effect, or would materially and adversely affect the ability of
the Company or the Resulting Company to perform its obligations under
this Agreement or the Subscription Agreement, or which are otherwise
material in the context of the sale of the Offered Securities; and no
such actions, suits or proceedings are threatened or, to the Company's
knowledge, contemplated. All pending legal or governmental proceedings
to which the Company, BRACC or any Subsidiary is a party or of which
any of their property or assets is the subject, including ordinary
routine litigation incidental to the business of the Company or BRACC,
are, considered in the aggregate, not material.
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(y) The financial statements of the Company included in the
Registration Statement and the Prospectuses comply in all material
respects with the requirements of the Act and the Rules and Regulations
applicable to a registration statement on Form S-1 and have been
prepared, and fairly present the financial position, results of
operations and cash flows of the Company and its subsidiaries
consolidated at the respective dates and for the respective periods
indicated, in accordance with generally accepted accounting principles
consistently applied throughout such period. The financial information
and financial data set forth in the Registration Statements and the
Prospectuses under the captions "Prospectus Summary-Summary Operating
Data for the Budget System," "Prospectus Summary--Summary Financial
Data of TEAM," "Capitalization" (exclusive of pro forma data contained
therein), "Pro Forma Consolidated Financial Statements of Budget
Group," "Selected Financial Data of TEAM" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations of TEAM"
are derived from the accounting records of the Company and its
subsidiaries, and are a fair presentation of the data purported to be
shown.
(z) The financial statements of BRACC included in the
Registration Statement and the Prospectuses comply in all material
respects with the requirements of the Act and the Rules and Regulations
applicable to a registration statement on Form S-1 and have been
prepared, and fairly present the financial position, results of
operations and cash flows of BRACC and its subsidiaries consolidated at
the respective dates and for the respective periods indicated, in
accordance with generally accepted accounting principles consistently
applied throughout such period. The financial information and financial
data set forth in the Registration Statements and the Prospectuses
under the captions "Prospectus Summary-Summary Operating Data for the
Budget System," "Prospectus Summary--Summary Financial Data of BRACC,"
"Capitalization" (exclusive of pro forma data contained therein), "Pro
Forma Consolidated Financial Statements of Budget Group," "Selected
Financial Data of BRACC" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations of BRACC" are derived
from the accounting records of BRACC and its subsidiaries, and are a
fair presentation of the data purported to be shown.
(aa) The pro forma financial data of the Resulting Company and
its subsidiaries contained in the Registration Statement have been and
the Prospectuses have been prepared in accordance with Article XI of
Regulation S-X under the Act; the assumptions used in the preparation
thereof (taken as a whole) are reasonable, and the adjustments used
therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(bb) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectuses, (i) there has been no material adverse change, nor any
development involving a prospective material adverse change, in the
condition (financial or other), results of operations, business affairs
or business prospects of the Company and its subsidiaries, or BRACC and
its subsidiaries, each taken as a whole, whether or not arising in the
ordinary course of business, and (ii) there have been no transactions
entered into by the Company or BRACC or any of their respective
subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries, or
BRACC and its subsidiaries, each taken as a whole.
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(cc) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectuses, the Resulting
Company will not be an "investment company" as defined in the
Investment Company Act of 1940.
(dd) There is no document or contract of a character required
to be described in the Registration Statement or the Prospectuses, or
to be filed as an exhibit to the Registration Statement, that is not
described or filed as required.
Any certificate signed by any officer of the Company and delivered to
the Underwriters or to counsel for the Underwriters pursuant to this Agreement
shall be deemed a representation and warranty by the Company to the Underwriters
as to the matters covered thereby.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of U.S.$ per share, the respective numbers
of shares of U.S. Firm Securities set forth opposite the names of the
Underwriters in Schedule A hereto.
The Company will deliver the U.S. Firm Securities to the
Representatives for the accounts of the Underwriters, at such office in New
York, New York as the Representatives may designate, against payment of the
purchase price by wire transfer of immediately available Federal (same day)
funds payable to the Company, such payment to be made to an account designated
by the Company at a bank acceptable to CSFBC, and confirmed at the office of
King & Spalding, 000 Xxxxxxxxx Xx., X.X., Xxxxxxx, Xxxxxxx 00000, at 10:00 A.M.,
Atlanta time, on [ ], or at such other time not later than seven full business
days thereafter as CSFBC and the Company determine, such time being herein
referred to as the "First Closing Date". For purposes of Rule 15c6-1 under the
Securities Exchange Act of 1934, the First Closing Date (if later than the
otherwise applicable settlement date) shall be the settlement date for payment
of funds and delivery of securities for all the Offered Securities sold pursuant
to the U.S. Offering and the International Offering. The certificates for the
U.S. Firm Securities so to be delivered will be in definitive form, in such
denominations and registered in such names as CSFBC requests and will be made
available for checking and packaging at least 24 hours prior to the First
Closing Date at such office in New York, New York as you may designate.
In addition, upon written notice from CSFBC given to the Company from
time to time not more than 30 days subsequent to the date of the Prospectuses,
the Underwriters may purchase, from time to time, all or less than all of the
U.S. Optional Securities at the purchase price per Security to be paid for the
U.S. Firm Securities. The Company agrees to sell to the Underwriters such number
of shares of U.S. Optional Securities specified in any such notice and the
Underwriters agree, severally and not jointly, to purchase such U.S. Optional
Securities. Such U.S. Optional Securities shall be purchased for the account of
each Underwriter in the same proportion as the number of shares of U.S. Firm
Securities set forth opposite such Underwriter's name bears to the total number
of shares of U.S. Firm Securities (subject to adjustment by CSFBC to eliminate
fractions) and may be purchased by the Underwriters only for the purpose of
covering over-allotments made in
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connection with the sale of the U.S. Firm Securities. No Optional Securities
shall be sold or delivered unless the U.S. Firm Securities and the International
Firm Securities previously have been, or simultaneously are, sold and delivered.
The right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFBC on behalf of
Underwriters and the Managers to the Company. It is understood that CSFBC is
authorized to make payment for and accept delivery of such Optional Securities
on behalf of the Underwriters and Managers pursuant to the terms of CSFBC's
instructions to the Company.
Each time for the delivery of and payment for the U.S. Optional
Securities, being herein referred to as an "Optional Closing Date", which may be
the First Closing Date (the First Closing Date and each Optional Closing Date,
if any, being sometimes referred to as a "Closing Date"), shall be determined by
CSFBC but shall be not later than three full business days after written notice
of election to purchase Optional Securities is given. The Company will deliver
the U.S. Optional Securities being purchased on each Optional Closing Date to
the Representatives for the accounts of the several Underwriters, at such office
in New York, New York as the Representatives may designate, against payment of
the purchase price therefor by wire transfer of immediately available Federal
(same day) funds payable to the Company, such payment to be made to an account
designated by the Company at a bank acceptable to CSFBC, and confirmed at the
office of King & Spalding, 000 Xxxxxxxxx Xx., X.X., Xxxxxxx, Xxxxxxx 00000. The
certificates for the U.S. Optional Securities will be in definitive form, in
such denominations and registered in such names as CSFBC requests upon
reasonable notice prior to such Optional Closing Date and will be made available
for checking and packaging at a reasonable time in advance of such Optional
Closing Date at such office in New York, New York as you may designate.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the U.S. Securities for sale to the public as set
forth in the U.S. Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Company will file each of the Prospectuses with the Commission pursuant
to and in accordance with subparagraph (1) (or, if applicable and if
consented to by CSFBC, subparagraph (4)) of Rule 424(b) not later than
the earlier of (A) the second business day following the execution and
delivery of this Agreement or (B) the fifteenth business day after the
Effective Date of the Initial Registration Statement.
The Company will advise CSFBC promptly of any such filing pursuant to
Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement and
an additional registration statement is necessary to register a portion
of the Offered Securities under the Act but the Effective Time thereof
has not occurred as of such execution and delivery, the Company will
file the additional registration statement or, if filed, will file a
post-effective amendment thereto with the Commission pursuant to and in
accordance with Rule 462(b) on or prior to 10:00 P.M., New York time,
on the date of this Agreement or, if earlier, on or prior to the time
either Prospectus is printed and
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distributed to any Underwriter or Manager, or will make such filing at
such later date as shall have been consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to
amend or supplement the initial or any additional registration
statement as filed or either of the related prospectuses or the Initial
Registration Statement, the Additional Registration Statement (if any)
or either of the Prospectuses and will not effect such amendment or
supplementation without CSFBC's prior written consent; and the Company
will also advise CSFBC promptly of the effectiveness of each
Registration Statement (if its Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or
supplementation of a Registration Statement or either of the
Prospectuses and of the institution by the Commission of any stop order
proceedings in respect of a Registration Statement and will use its
best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter, Manager or dealer, any event occurs as a
result of which either or both of the Prospectuses as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend either or
both of the Prospectuses to comply with the Act, the Company will
promptly notify CSFBC of such event and will promptly prepare and file
with the Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance. Neither CSFBC's consent to, nor the Underwriters' delivery
of, any such amendment or supplement shall constitute a waiver of any
of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the
Initial Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "Availability Date" means the
90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of
each Registration Statement (five of which will include all exhibits),
each preliminary prospectus relating to the U.S. Securities, and, so
long as delivery of a prospectus relating to the Offered Securities is
required to be delivered under the Act in connection with sales by any
Underwriter or dealer, the U.S. Prospectus and all amendments and
supplements to such documents, in each case as soon as available and in
such quantities as CSFBC requests. The U.S. Prospectus shall be so
furnished on or prior to 3:00 P.M., New York time, on the business day
following the later of the execution and delivery of this Agreement or
the Effective Time
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of the Initial Registration Statement. All other documents shall be so
furnished as soon as available. The Company will pay the expenses of
printing and distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions in the
United States as CSFBC designates and will continue such qualifications
in effect so long as required for the distribution of the Offered
Securities; provided, however, that in connection therewith, 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.
(g) During the period of five years hereafter, the Company
will furnish to the Representatives and, upon request, to each of the
other Underwriters, as soon as practicable after the end of each fiscal
year, a copy of its annual report to stockholders for such year; and
the Company will furnish to the Representatives (i) as soon as
available, a copy of each report and any definitive proxy statement of
the Company filed with the Commission under the Securities Exchange Act
of 1934 or mailed to stockholders, and (ii) from time to time, such
other information concerning the Company as CSFBC may reasonably
request.
(h) The Company will pay all expenses incident to the
performance of its obligations under this Agreement and will reimburse
the Underwriters (if and to the extent incurred by them) for any filing
fees and other expenses (including fees and disbursements of counsel)
incurred by them in connection with qualification of the Offered
Securities for sale under the laws of such jurisdictions in the United
States as CSFBC designates and the printing of memoranda relating
thereto, the filing relating to the review of documents by the National
Association of Securities Dealers, Inc. ("NASD") pursuant to the
Corporate Financing Rule of the NASD's Conduct Rules and for expenses
incurred in distributing preliminary prospectuses and the Prospectuses
(including any amendments and supplements thereto) to the Underwriters.
(i) For a period of 180 days after the date of the initial
public offering of the Offered Securities, the Company will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under
the Act relating to, any additional shares of its Securities or
securities convertible into or exchangeable or exercisable for any
shares of its Securities, or publicly disclose the intention to make
any such offer, sale, pledge, disposal or filing, without the prior
written consent of CSFBC, except registrations required pursuant to the
Stock Purchase Agreements, the Series A Notes and the Series B Notes,
and grants of employee stock options pursuant to the terms of the 1994
Option Plan or the 1994 Directors' Plan in effect on the date hereof
that may not be exercised until 180 days after the public offering of
the Offered Securities, issuances of Securities pursuant to the
exercise of such options or the exercise of any other employee stock
options outstanding on the date hereof.
6. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the U.S. Firm Securities on
the First Closing Date and the U.S. Optional Securities to be purchased on each
Optional Closing Date will be subject to the accuracy
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of the representations and warranties on the part of the Company herein, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) The Representatives shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to the
registration statement to be filed shortly prior to such Effective
Time), of Xxxxxx Xxxxxxxx LLP confirming that they are independent
public accountants to the Company within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating to
the effect that:
(i) in their opinion the financial statements and
schedules examined by them and included or incorporated by
reference in the Registration Statement and the Prospectuses
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations;
(ii) on the basis of the review referred to in clause
(i) above, a reading of the latest available unaudited
consolidated financial statements of the Company, inquiries of
officials of the Company who have responsibility for financial
and accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) any material modifications should be
made to the unaudited pro forma consolidated
financial statements included in the Registration
Statement and the Prospectuses for them to be in
conformity with generally accepted accounting
principles or that such unaudited pro forma
consolidated financial statements do not comply as to
form in all material respects with the applicable
accounting requirements of the Act and the related
published Rules and Regulations;
(B) at the date of the latest available
unaudited consolidated balance sheet read by such
accountants, or at a subsequent specified date not
more than five days prior to the date of this
Agreement, there was any change in the capital stock
or any increase in short-term non-vehicle
indebtedness or long-term debt of the Company and its
subsidiaries or any decrease in consolidated
stockholders' equity, as compared with amounts shown
on the latest balance sheet included in the
Prospectuses; or
(C) for the period from the closing date of
the latest unaudited consolidated income statement
included in the Prospectuses to the closing date of
the latest available unaudited consolidated income
statement read by such accountants, or to the
subsequent specified date set forth in clause
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(B) above, there were any decreases, as compared with
the corresponding period of the previous year, in
consolidated operating revenue, operating income or
net income of the Company,
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Prospectuses
disclose have occurred or may occur or which are described in
such letter;
(iii) on the basis of specified procedures, including
(A) a reading of the unaudited pro forma consolidated
financial statements of the Company after giving effect to the
Acquisition at December 31, 1996 included in the Registration
Statement and the Prospectuses; (B) inquiries of certain
officials of the Company who have responsibility for financial
and accounting matters about the basis for the determination
of the pro forma adjustments and whether the unaudited pro
forma financial statements referred to in clause (A) comply as
to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X; and
(C) proving the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the
unaudited pro forma financial statements referred to in clause
(A), nothing came to their attention that caused them to
believe that the unaudited pro forma consolidated financial
statements referred to in clause (A) included in the
Registration Statements and the Prospectuses do not comply as
to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of those
statements; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statement
and the Prospectuses (in each case to the extent that such
dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company
and its subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such
records by analysis or computation) with the results obtained
from inquiries, a reading of such general accounting records
and other procedures specified in such letter and have found
such dollar amounts, percentages and other financial
information to be in agreement with such results, except as
otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "Registration Statement" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration is subsequent to such
execution and delivery, "Registration Statement" shall mean the Initial
Registration Statement and the additional registration statement as
proposed to be filed or as proposed
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to be amended by the post-effective amendment to be filed shortly prior
to its Effective Time, and (iii) "Prospectuses" shall mean the
prospectuses included in the Registration Statements.
(b) The Representatives shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to the
registration statement to be filed shortly prior to such Effective
Time), of KPMG Peat Marwick LLP confirming that they are independent
public accountants to BRACC within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating to
the effect that:
(i) in their opinion the financial statements and
schedules examined by them and included or incorporated by
reference in the Registration Statement and the Prospectuses
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations;
(ii) on the basis of the review referred to in clause
(i) above, a reading of the latest available unaudited
consolidated financial statements of BRACC, inquiries of
officials of BRACC who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) at the date of the latest available
unaudited consolidated balance sheet read by such
accountants, or at a subsequent specified date not
more than five days prior to the date of this
Agreement, there was any change in the capital stock
or any increase in short-term non-vehicle
indebtedness or long-term debt of BRACC and its
subsidiaries or any decrease in consolidated
stockholders' equity, as compared with amounts shown
on the latest balance sheet included in the
Prospectuses; or
(B) for the period from the closing date of
the latest unaudited consolidated income statement
included in the Prospectuses to the closing date of
the latest available unaudited consolidated income
statement read by such accountants, or to the
subsequent specified date set forth in clause (B)
above, there were any decreases, as compared with the
corresponding period of the previous year, in
consolidated operating revenue, operating income or
net income of BRACC,
except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases which the Prospectuses
disclose have occurred or may occur or which are described in
such letter; and
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(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statement
and the Prospectuses (in each case to the extent that such
dollar amounts, percentages and other financial information
are derived from the general accounting records of BRACC and
its subsidiaries subject to the internal controls of BRACC's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "Registration Statement" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration is subsequent to such
execution and delivery, "Registration Statement" shall mean the Initial
Registration Statement and the additional registration statement as
proposed to be filed or as proposed to be amended by the post-effective
amendment to be filed shortly prior to its Effective Time, and (iii)
"Prospectuses" shall mean the prospectuses included in the Registration
Statements.
(c) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New
York time, on the date of this Agreement or such later date as shall
have been consented to by CSFBC. If the Effective Time of the
Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the time either Prospectus is printed
and distributed to any Underwriter or Manager, or shall have occurred
at such later date as shall have been consented to by CSFBC. If the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement, each of the Prospectuses
shall have been filed with the Commission in accordance with the Rules
and Regulations and Section 5(a) of this Agreement. Prior to such
Closing Date, no stop order suspending the effectiveness of a
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the
Company or the Representatives, shall be contemplated by the
Commission.
(d) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development involving a prospective change, in the condition (financial
or other), results of operations, business affairs or business
prospects of the Company and its subsidiaries or BRACC and its
subsidiaries which, in the judgment of a majority in interest of the
Underwriters including the Representatives, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the U.S. Securities;
(ii) any downgrading in the
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rating of any debt securities or preferred stock of the Company or
BRACC or any of their respective subsidiaries by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities or preferred stock of the Company, BRACC or any of their
respective subsidiaries (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any suspension or limitation of
trading in securities generally on the New York Stock Exchange or The
Nasdaq National Market, or any setting of minimum prices for trading on
such exchange or market, or any suspension of trading of any securities
of the Company on any exchange or in the over-the-counter market; (iv)
any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress
or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the
Underwriters including the Representatives, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the U.S. Securities.
(e) The Representatives shall have received an opinion, dated
such Closing Date, of King & Spalding, counsel for the Company, to the
effect that:
(i) the Company has been duly incorporated and
validly exists as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectuses;
(ii) the Company's authorized capital stock is as set
forth in the Registration Statement and the Prospectuses under
the caption "Description of Capital Stock"; the Offered
Securities delivered on such Closing Date and all other
outstanding shares of the Class A Common Stock, Class B Common
Stock and Series A Preferred Stock of the Company have been
duly authorized and validly issued, are fully paid and
nonassessable and conform to the description thereof contained
in the Prospectuses under the caption "Description of Capital
Stock"; and the Offered Securities have been listed on the New
York Stock Exchange;
(iii) to the knowledge of such counsel, the Company
is the sole ultimate beneficial owner of all outstanding
capital stock of each Subsidiary, free and clear of all
security interests, claims, liens or encumbrances;
(iv) except as described in the Prospectuses and
filed as exhibits to the Registration Statement, there are no
contracts, agreements or understandings known to such counsel
between the Company and any person granting such person the
right to require the Company or the Resulting Company to file
a registration statement under the Act with respect to any
securities of the Company or the Resulting Company owned or to
be owned by such person or to require the Company or the
Resulting Company to include such securities in the securities
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registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company or the Resulting Company under
the Act;
(v) no consent, approval, authorization or order of,
or filing with, any governmental agency or body or any court
is required for the consummation of the transactions
contemplated by this Agreement or the Subscription Agreement
in connection with the issuance or sale of the Offered
Securities by the Company, except such as have been obtained
and made under the Act and such as may be required under state
securities laws, as to which laws such counsel may express no
opinion;
(vi) the execution, delivery and performance (A) by
the Company of this Agreement and the Subscription Agreement
and (B) by the Company and the Resulting Company and their
subsidiaries of the Stock Purchase Agreements, the New Fleet
Financing Credit Agreements, the Senior Notes Agreements and
the Series B Agreements, and the issuance and sale of the
Offered Securities, the Senior Notes and the Series B Notes,
will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, (1) any
statute, rule, regulation or order of any governmental agency
or body or any court having jurisdiction over the Company, the
Resulting Company or any Subsidiary or any of their
properties, (2) any agreement or instrument filed as an
exhibit to the Registration Statement to which the Company,
the Resulting Company or any such Subsidiary is a party or by
which the Company, the Resulting Company or any such
Subsidiary is bound or to which any of the properties of the
Company, the Resulting Company or any such Subsidiary is
subject, or (3) the charter or by-laws of the Company or any
such Subsidiary, except, in the case of clause (1) or (2),
such breaches, violations or defaults that, individually or in
the aggregate, would not have a Material Adverse Effect; the
Company has full power and authority to authorize, issue and
sell the Offered Securities as contemplated by this Agreement
and the Subscription Agreement, respectively, and has full
power and authority to authorize, issue and sell the Series B
Notes as contemplated by the Series B Agreements;
(vii) the Initial Registration Statement was declared
effective under the Act as of the date and time specified in
such opinion, the Additional Registration Statement (if any)
was filed and became effective under the Act as of the date
and time (if determinable) specified in such opinion, each of
the Prospectuses either were filed with the Commission
pursuant to the subparagraph of Rule 424(b) specified in such
opinion on the date specified therein or were included in the
Initial Registration Statement or the Additional Registration
Statement (as the case may be), and, to the best knowledge of
such counsel, no stop order suspending the effectiveness of a
Registration Statement or any part thereof has been issued and
no proceedings for that purpose have been instituted or are
pending or contemplated under the Act, and each Registration
Statement and each of the Prospectuses, and each amendment or
supplement thereto, as of their respective effective or issue
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dates, complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations; the
descriptions under the captions "The Budget Acquisition,"
"Business--Regulatory and Environmental Matters," "Description
of Capital Stock," "Description of Certain Indebtedness" and
Part II, Item 14 "Indemnification of Directors and Officers"
in the Registration Statement and the Prospectuses of matters
of law (including, without limitation, matters relating to
Environmental Laws), statutes and contracts and other
documents are accurate in all material respects and fairly
present the information required to be shown in a registration
statement on Form S-1; and such counsel do not know of any
legal or governmental proceedings to which the Company or any
Subsidiary of the Company is a party required to be described
in the Registration Statement or the Prospectuses which are
not described as required or of any contracts or documents of
a character required to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits to
the Registration Statement which are not described or filed as
required (it being understood that such counsel need express
no opinion as to the financial statements and schedule or
other financial and statistical data contained in the
Registration Statement or the Prospectuses);
(viii) this Agreement and the Subscription Agreement
have been duly authorized, executed and delivered by the
Company, and represent valid and binding obligations of the
Company enforceable against the Company in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights, and to general
principles of equity, whether applied by a court of law or
equity, and except that the enforceability of the rights to
indemnity and contribution pursuant to Section 7 hereunder may
be limited by federal or state securities laws or by public
policy;
(ix) the Stock Purchase Agreements, the New Fleet
Financing Credit Agreements, the Senior Notes Agreements and
the Series B Agreements have been duly authorized, executed
and delivered by the Company and BRACC (to the extent a party
thereto), and represent valid and binding obligations of the
Company and BRACC, enforceable against the Company, the
Resulting Company or BRACC in accordance with their terms,
subject as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights, and to general
principles of equity, whether applied by a court of law or
equity, and except that the enforceability of any rights to
indemnity or contribution may be limited by federal or state
securities laws or by public policy;
(x) to the knowledge of such counsel, except for (A)
the 4,500 shares of Series A Preferred Stock, which are
convertible into 4,500,000 shares of Class A Common Stock, (B)
the 1,936,600 shares of Class B Common Stock, which are
convertible into 1,936,600 shares of Class A Common Stock, (C)
the BRACC Warrant, (D) the NationsBank Warrant, (E) the
options to purchase 729,850 shares of Class A Common Stock and
Class B Common Stock issued under the 1994 Option Plan, (F)
the options to purchase 70,000 shares of Class A Common Stock
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under the 1994 Directors' Plan, (G) the $80.0 million
aggregate principal amount of Series A Notes which are
convertible into 3,986,049 shares of Class A Common Stock and
(H) the $50.0 million aggregate principal amount of Series B
Notes, which are convertible into 1,428,571 shares of Class A
Common Stock, each as described in the Registration Statement
and the Prospectuses, and except for the rights of the
respective parties to the OPCO Agreement, there are no, and
following consummation of the Acquisition there will be no,
outstanding securities of the Company that are convertible
into Class A Common Stock; and
(xi) to the knowledge of such counsel, except for (A)
the rights of first refusal set forth in the Share Exchange
Agreement dated April 25, 1994, as amended on June 13, 1994
and July 5, 1994, among the Company, Xxxxx Xxxxxxx, Xxxxxxx
Xxxxxxx, Xxxxxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx and
Xxxxxxx Xxxxx, (B) the rights of Xxxxx Xxxxxxx and Xxxxxx
Xxxxxxx to receive additional shares of Class A Common Stock,
as set forth in the Agreement, dated March 8, 1995, among the
Company, Team Rental of Connecticut, Inc., Rental Car
Resources, Inc., Xxxxx Xxxxxxx and Xxxxxx Xxxxxxx, (C) the put
right set forth in the BRACC Warrant, (D) the rights of first
refusal held by BRACC pursuant to certain of its franchise
agreements with the Company, (E) the rights of the parties to
the OPCO Agreement and (F) the rights of Ford under the Stock
Purchase Agreements, there are no, and following the
consummation of the Acquisition there will be no, preemptive
or other rights to subscribe for or purchase any shares of
capital stock issued by the Company, the Resulting Company or
any subsidiary of the Resulting Company. Except for the
transfer restrictions set forth in the Registration Rights
Agreements, Section 5(i) of this Agreement, BRACC's right to
approve certain transfers of capital stock held by Messrs.
Miller, Kennedy, Congdon, Britton, Xxxxxx and Xxxxx pursuant
to the letter agreement dated May 5, 1994 among such officers
and BRACC, and the voting restrictions set forth in the
Shareholders' Agreement dated October 20, 1995 among the
Company, the holders of Class B Common Stock and SOCAL, there
are no, and following consummation of the Acquisition there
will be no, restrictions to which the Company or the Resulting
Company is a party upon the voting or transfer of, and no
restrictions on the declaration or payment of any dividend or
distribution on, any shares of capital stock of the Company,
the Resulting Company or any Subsidiary.
In addition, such counsel shall state that such
counsel have no reason to believe that any part of a
Registration Statement or any amendment thereto, as of its
effective date or as of such Closing Date, contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading or that either of
the Prospectuses or any amendment or supplement thereto, as of
its issue date or as of such Closing Date, contained any
untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading.
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(f) The Representatives shall have received an opinion, dated
such Closing Date, of Xxxxxx X. Xxxxxx, Senior Vice President, General
Counsel and Secretary of BRACC, to the effect that:
(i) BRACC has been duly incorporated and validly
exists as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own
its properties and conduct its business as described in the
Prospectuses; and
(ii) the consummation of the Offerings, the
execution, delivery and performance of the Stock Purchase
Agreements and the New Fleet Financing Credit Agreements and
the issuance and sale of the Senior Notes and the Series B
Notes will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, (A)
any statute, rule, regulation or order of any governmental
agency or body or any court having jurisdiction over BRACC or
any Subsidiary of BRACC or any of their properties, (B) any
debt instrument or other agreement to which BRACC or any such
Subsidiary is a party or by which BRACC or any such Subsidiary
is bound or to which any of the properties of BRACC or any
such Subsidiary is subject, or (C) the charter or by-laws of
BRACC or any such Subsidiary, except in the case of clause (A)
or (B), such breaches, violations or defaults that,
individually or in the aggregate, would not have a Material
Adverse Effect.
(g) The Representatives shall have received from Cravath,
Swaine & Xxxxx, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the incorporation of the
Company, the validity of the Offered Securities delivered on such
Closing Date, the Registration Statement, the Prospectuses and other
related matters as the Representatives may require, and the Company
shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(h) The Representatives shall have received a certificate,
dated such Closing Date, of the President and the principal financial
officer of the Company in which such officers, to the best of their
knowledge after reasonable investigation, shall state that: the
representations and warranties of the Company in this Agreement are
true and correct on and as of such Closing Date to the same effect as
if made on such Closing Date; the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date; no stop order
suspending the effectiveness of any Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission; the Additional Registration Statement
(if any) satisfying the requirements of subparagraphs (1) and (3) of
Rule 462(b) was filed pursuant to Rule 462(b), including payment of the
applicable filing fee in accordance with Rule 111(a) or (b) under the
Act, prior to the time either Prospectus was printed and distributed to
any Underwriter or Manager; and, subsequent to the date of the most
recent financial statements in the Prospectuses, there has been no
material adverse change in the condition (financial or other), results
of operations, business affairs or
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business prospects of the Company, BRACC and any Subsidiary except as
set forth in or contemplated by the Prospectuses or as described in
such certificate.
(i) The Representatives shall have received letters, dated
such Closing Date, of Xxxxxx Xxxxxxxx LLP and KPMG Peat Marwick LLP,
which meet the requirements of subsections (a) and (b) of this Section,
respectively, except that the specified date referred to in such
subsection will be a date not more than five days prior to such Closing
Date for the purposes of this subsection.
(j) On such Closing Date, the Managers shall have purchased
the International Firm Securities or the International Optional
Securities, as the case may be, pursuant to the Subscription Agreement.
(k) Concurrently with or prior to the issuance and sale of the
Offered Securities by the Company, the Acquisition shall be consummated
on terms that conform in all material respects to the description
thereof in the Registration Statement and Prospectuses and the
Representatives shall have received true and correct copies of all
documents pertaining thereto and evidence reasonably satisfactory to
the Representatives of the consummation thereof.
(l) Concurrently with or prior to the issuance and sale of the
Offered Securities by the Company, the Company shall have entered into
the New Fleet Financing Credit Agreements and shall have made the
initial borrowings thereunder. The Representatives shall have received
conformed counterparts thereof and all other documents and agreements
entered into and received thereunder in connection with the closing of
the New Fleet Financing Credit Agreements. There shall exist at and as
of the Closing Date (after giving effect to the transactions
contemplated by this Agreement and the Acquisition) no condition that
would constitute a default (or an event that with notice or lapse of
time, or both, would constitute a default) under the New Fleet
Financing Credit Agreements.
(m) Concurrently with or prior to the issuance and sale of the
Offered Securities by the Company, the offering of the Senior Notes by
BRACC and the Series B Notes by the Company shall be consummated on
terms that conform in all material respects to the descriptions thereof
in the Registration Statement and Prospectuses and the Representatives
shall have received true and correct copies of all documents pertaining
thereto and evidence reasonably satisfactory to the Representatives of
the consummation thereof.
(n) On any Optional Closing Date for the purchase of
Optional Shares, the Representatives shall receive a certificate, dated
such Closing Date, from the Company which shall state that the
representations and warranties by the Company in this Agreement and in
the Subscription Agreement are true and correct on and as of such
Optional Closing Date to the same effect as if made on such Optional
Closing Date and that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to such Optional Closing Date.
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(o) The Representatives shall have received executed
agreements in the form annexed hereto as Exhibit A from each officer
and director of the Company.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. CSFBC may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder,
whether in respect of an Optional Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, either of the Prospectuses, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being understood
and agreed that the only information furnished by any Underwriter consists of
the information described as such in subsection (b) below; provided further,
that such indemnity with respect to any untrue statement or omission of a
material fact contained in any preliminary prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased the shares that are the subject thereof
if such person did not receive a copy of the Prospectus (or the Prospectus as
supplemented) at or prior to the confirmation of the sale of such shares to such
person in any case where such delivery is required under the Act and such untrue
statement or omission of a material fact contained in any preliminary prospectus
was corrected in the Prospectus (or the Prospectus as supplemented).
Insofar as the foregoing indemnity agreement, or the
representations and warranties contained in Section 2(b), may permit
indemnification for liabilities under the Act of any person who is an
Underwriter or a partner or controlling person of an Underwriter within the
meaning of Section 15 of the Act and who, at the date of this Agreement, is a
director, officer or controlling person of the Company, the Company has been
advised that in the opinion of the Commission such provisions may contravene
Federal public policy as expressed in the Act and may therefore be
unenforceable. In the event that a claim for indemnification under such
agreement or such representations and warranties for any such liabilities
(except insofar as such agreement provides for the payment by the Company
of expenses incurred or paid by a director, officer or controlling person in the
successful defense of any action, suit or proceeding) is asserted by such a
person, the Company will submit to a court of appropriate jurisdiction (unless
in the opinion of counsel for the Company the matter has already been settled by
controlling precedent) the question of whether or
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27
not indemnification by it for such liabilities is against public policy as
expressed in the Act and therefore unenforceable, and the Company will be
governed by the final adjudication of such issue.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, either of the
Prospectuses, or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Underwriter consists of (i) the following
information in the U.S. Prospectus furnished on behalf of each Underwriter: the
last paragraph at the bottom of the cover page concerning the terms of the
offering by the Underwriters, the legend concerning over-allotments, stabilizing
and passive market making on the inside front cover page and the thirteenth
paragraph under the caption "Underwriting," the concession and reallowance
figures appearing in the fifth paragraph under the caption "Underwriting" and
the information contained in the tenth paragraph under the caption
"Underwriting" and (ii) the information in the twelfth paragraph under the
caption "Underwriting" in the U.S. Prospectus furnished on behalf of CSFBC
concerning material relationship disclosure.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action.
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(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (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 from the offering of the U.S.
Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering of the U.S. Securities (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters. 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 or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the U.S. 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 such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company, to each officer of the Company
who has signed a Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase U.S. Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of U.S.
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of U.S. Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company for the purchase of such U.S.
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date the
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non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the U.S. Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of shares of
U.S. Securities with respect to which such default or defaults occur exceeds 10%
of the total number of shares of U.S. Securities that the Underwriters are
obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBC and the Company for the purchase of such U.S. Securities by other persons
are not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the Company,
except as provided in Section 9 (provided that if such default occurs with
respect to U.S. Optional Securities after the First Closing Date, this Agreement
will not terminate as to the U.S. Firm Securities or any U.S. Optional
Securities purchased prior to such termination). As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the U.S. Securities. If this Agreement is terminated pursuant to
Section 8 or if for any reason the purchase of the U.S. Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Underwriters pursuant to Section 7 shall
remain in effect and if any U.S. Securities have been purchased hereunder the
representations and warranties in Section 2 and all obligations under Section 5
shall also remain in effect. If the purchase of the U.S. Securities by the
Underwriters is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 8 or the occurrence of any
event specified in clause (iii), (iv), or (v) of Section 6(d), the Company will
reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the U.S. Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed or delivered to the Representatives,
c/o Credit Suisse First Boston Corporation, Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Investment Banking Department -- Transactions Advisory
Group, or, if sent to the Company, will be mailed or delivered to it at Team
Rental Group, Inc., 000 Xxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000, Attention:
Xx. Xxxxxxx Xxxxxx; provided, however, that any notice to an Underwriter
pursuant to Section 7 will be mailed or delivered to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
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12. Representation of Underwriters. The Representatives will act for
the several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by CSFBC will be binding
upon all the Underwriters.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
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If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
TEAM RENTAL GROUP, INC.
By
--------------------------
Xxxxxxx Xxxxxx
Chairman and Chief
Executive Officer
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
ABN AMRO CHICAGO CORPORATION
ALEX. XXXXX & SONS INCORPORATED
XXXXXXXX & COMPANY SECURITIES, INC.,
Acting on behalf of themselves and as the Representatives of the
several Underwriters.
By CREDIT SUISSE FIRST BOSTON CORPORATION
By
-----------------------------------
X. Xxxxxxx Xxxxx, Jr.
Managing Director
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SCHEDULE A
Number of
Underwriter U.S. Firm Securities
----------- --------------------
Credit Suisse First Boston Corporation.............
ABN AMRO Chicago Corporation.......................
Alex. Xxxxx & Sons Incorporated....................
XxXxxxxx & Company Securities, Inc.................
---------
Total........................ 5,200,000
=========
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EXHIBIT A
April __, 1997
Team Rental Group, Inc.
000 Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010
ABN AMRO Chicago Corporation
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Alex. Xxxxx & Sons Incorporated
0 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
XxXxxxxx & Company Securities, Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Dear Sirs:
As an inducement to the Underwriters to execute the Underwriting
Agreement, pursuant to which an offering will be made of Class A Common Stock,
par value $.01 per share (the "Securities"), of Team Rental Group, Inc. (the
"Company"), the undersigned hereby agrees that, for a period of 90 days after
the public offering (the "Commencement Date") of the Securities pursuant to the
Underwriting Agreement to which you are or expect to become party, the
undersigned will not offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, any shares of Securities or securities convertible
into or exchangeable or exercisable for any shares of Securities, or publicly
disclose the intention to make any such offer, sale, pledge or disposal, without
the prior written consent of Credit Suisse First Boston Corporation.
In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer of shares of
Securities if such transfer would constitute a violation or breach of this
Agreement.
This Agreement shall be binding on the undersigned and the respective
successors, heirs, personal representatives and assigns of the undersigned. This
agreement shall lapse and become null and void if the Commencement Date shall
not have occurred on or before ____________, 1997.
Very truly yours,
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Name:
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