Exhibit 1.1
Underwriting Agreement
EXECUTION COPY
GROUP 1 AUTOMOTIVE, INC.
COMMON STOCK
Par Value $.01 per Share
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Underwriting Agreement
October 25, 2001
To the Representatives of the
several Underwriters named in the
respective Pricing Agreements
hereinafter described.
Ladies and Gentlemen:
From time to time, Group 1 Automotive, Inc., a Delaware corporation
(the "Company") proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, the Company proposes to issue and sell to
the firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain shares of the Company's Common Stock, par
value $.01 per share (the "Shares") specified in Schedule II to such Pricing
Agreement (with respect to such Pricing Agreement, the "Firm Shares"). If
specified in such Pricing Agreement, the Company may grant to the Underwriters
the right to purchase at their election an additional number of shares,
specified in such Pricing Agreement as provided in Section 3 hereof (the
"Optional Shares"). The Firm Shares and the Optional Shares, if any, which the
Underwriters elect to purchase pursuant to Section 3 hereof are herein
collectively called the "Designated Shares".
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The terms and rights of any particular issuance of Designated Shares shall be as
specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to time
to the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Shares or as an obligation of
any of the Underwriters to purchase any of the Shares. The obligation of the
Company to issue and sell any of the Shares and the obligation of any of the
Underwriters to purchase any of the Shares shall be evidenced by the Pricing
Agreement with respect to the Designated Shares specified therein. Each Pricing
Agreement shall specify the aggregate number of the Firm Shares, the maximum
number of Optional Shares, if any, the initial public offering price of such
Firm and Optional Shares or the manner of determining such price, the purchase
price to the Underwriters of such Designated Shares, the names of the
Underwriters of such Designated Shares, the names of the Representatives of such
Underwriters, the number of such Designated Shares to be purchased by each
Underwriter and the commission, if any, payable to the Underwriters with respect
thereto and shall set forth the date, time and manner of delivery of such Firm
and Optional Shares, if any, and payment therefor. The Pricing Agreement shall
also specify (to the extent not set forth in the registration statement and
prospectus with respect thereto) the terms of such Designated Shares. A Pricing
Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic communications
or any other rapid transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under this
Agreement and each Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-83407)
(the "Initial Registration Statement") in respect of the Shares has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Representatives and, excluding exhibits to
the Initial Registration Statement, but including all documents
incorporated by reference in the prospectus contained therein, to the
Representatives for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed or transmitted for filing with the Commission (other than
prospectuses filed pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Act, each in the form heretofore delivered
to the Representatives); and no stop order suspending the effectiveness
of the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in
the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) under the Act, is hereinafter called a
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"Preliminary Prospectus"; the various parts of the Initial Registration
Statement, any post-effective amendment thereto and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective, each as amended at the time
such part of the Initial Registration Statement became effective or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Shares, in the
form in which it has most recently been filed, or transmitted for
filing, with the Commission on or prior to the date of this Agreement,
being hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
the applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment to the
Initial Registration Statement shall be deemed to refer to and include
any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended
or supplemented in relation to the applicable Designated Shares in the
form in which it is filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such
filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
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(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(d) The Company and its subsidiaries, taken as a whole, have not
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with their business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the
capital stock (other than the exercise of certain employee stock
options and awards) or increase in short-term debt or long-term debt of
the Company and its subsidiaries, taken as a whole (other than floor
plan borrowings in the ordinary course of business), or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole, otherwise than as
set forth or contemplated in the Prospectus;
(e) The Company and its subsidiaries have good and indefeasible
title to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except any failure to have such title
or the existence of any such lien, encumbrance or defect which is
described in the Prospectus or where any such failure would not,
individually or in the aggregate, have a Material Adverse Effect (as
hereinafter defined); and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases except where any failure of a lease
to be valid, subsisting or enforceable would not, individually or in
the aggregate, have a Material Adverse Effect, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except where any failure
to be so qualified in any such jurisdiction would not, individually or
in the aggregate, have a Material Adverse Effect; and each subsidiary
of the Company
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has been duly incorporated or organized, as the case may be, and is
validly existing as a corporation or partnership, as the case may be,
in good standing under the laws of its jurisdiction of incorporation or
organization, except where any failure to be duly incorporated or
organized or validly existing in good standing would not, individually
or in the aggregate, have a Material Adverse Effect;
(g) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; and all of the issued shares of capital stock
of each subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable, are owned directly or
indirectly by the Company and, except as described in the Prospectus,
are owned free and clear of all liens, encumbrances, equities or
claims, except where any failure of the capital stock of any subsidiary
of the Company to be duly and validly authorized and issued, fully paid
and non-assessable, or owned directly or indirectly or free and clear
of all liens, encumbrances, equities or claims would not, individually
or in the aggregate, have a Material Adverse Effect;
(h) The Shares have been duly and validly authorized, and, when
the Firm Shares are issued and delivered pursuant to this Agreement and
the Pricing Agreement with respect to such Designated Shares and, in
the case of any Optional Shares, pursuant to Options (as defined in
Section 3 hereof) with respect to such Shares, such Designated Shares
will be duly and validly issued and fully paid and non-assessable; the
Shares conform in all material respects to the description thereof
contained in the Registration Statement and the Designated Shares will
conform in all material respects to the description thereof contained
in the Prospectus as amended or supplemented with respect to such
Designated Shares;
(i) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Shares) will violate or result in a violation of Section 7 of
the Exchange Act, or any regulation promulgated thereunder, including,
without limitation, Regulations G, T, U, and X of the Board of
Governors of the Federal Reserve System;
(j) The issue and sale of the Shares and the compliance by the
Company with all of the provisions of this Agreement, any Pricing
Agreement and each Option, if any, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any Dealer Agreement (as hereinafter
defined) or any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, except, in each case,
for such conflicts, breaches, violations or defaults as would not
individually or in the aggregate have a material adverse effect on the
current or future consolidated financial position, stockholders' equity
or results of operations of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect"), nor will such action result in any
violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any of its
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subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties; no
consent, approval, authorization, order, registration or qualification
of or with either (i) any such court or governmental agency or body or
(ii) any automobile manufacturer is required for the issue and sale of
the Shares or the consummation by the Company of the transactions
contemplated by this Agreement or any Pricing Agreement or any Option,
except such as have been, or will have been prior to each Time of
Delivery (as defined in Section 4 hereof), obtained under the Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by
the Underwriters and except for such consents the failure to obtain
would not, individually or in the aggregate, have a Material Adverse
Effect;
(k) Neither the Company nor, except as would not, individually or
in the aggregate, have a Material Adverse Effect, any of its
subsidiaries is in violation of its Certificate of Incorporation or
By-laws; and neither the Company nor any of its subsidiaries is in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be
bound, except where any such default would not, individually or in the
aggregate, have a Material Adverse Effect;
(l) The statements set forth in the Prospectus under the caption
"Description of Capital Stock" and the description of the Company's
common stock incorporated by reference in the Prospectus, insofar as
they purport to constitute a summary of the terms of the Shares, and
the statements set forth in the Prospectus under the caption "Plan of
Distribution", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate in all
material respects;
(m) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(n) The Company is not, and after giving effect to the offering
and sale of the Shares will not be required to register as, an
"investment company", or an entity "controlled" by an "investment
company", as such terms are defined in the United States Investment
Company Act of 1940, as amended (the "Investment Company Act");
(o) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company and certain of its subsidiaries are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(p) The Company and its subsidiaries have obtained all
environmental permits, licenses and other authorizations required by
Federal, state and local law in order to conduct their businesses as
described in the Prospectus, except where failure to do so would not,
individually or in the aggregate, have a Material Adverse Effect; the
Company and its subsidiaries are conducting their businesses in
compliance with such permits, licenses and authorizations and with
applicable environmental laws, except where the
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failure to be in compliance would not, individually or in the
aggregate, have a Material Adverse Effect; and, except as described in
the Prospectus, neither the Company nor any of its subsidiaries is in
violation of any Federal or state law or regulation relating to the
storage, handling, disposal, release or transportation of hazardous or
toxic materials where any such violation would, individually or in the
aggregate, have a Material Adverse Effect;
(q) The Company and its subsidiaries have all licenses,
franchises, permits, authorizations, approvals and orders and other
concessions of and from all governmental or regulatory authorities that
are necessary to own or lease their properties and conduct their
businesses as described in the Prospectus, except for such licenses,
franchises, permits authorizations, approvals and orders the failure to
obtain which would not, individually or in the aggregate, have a
Material Adverse Effect;
(r) The Company and each of its subsidiaries is conducting its
business in compliance with all applicable statutes, rules,
regulations, standards, guides and orders administered or issued by any
governmental or regulatory authority in the jurisdictions in which it
is conducting business, except as described in the Prospectus and
except where the failure to be so in compliance would not, individually
or in the aggregate, have a Material Adverse Effect; and
(s) Except as described in the Prospectus, the Company or, if
applicable, a subsidiary of the Company, has entered into a dealer
agreement with each of the manufacturers listed on Schedule A hereto
(collectively, the "Dealer Agreements"), each of which has been duly
authorized, executed and delivered by the Company or the applicable
subsidiary, is in full force and effect and constitutes the valid and
binding agreement between the parties thereto, enforceable in
accordance with its terms, subject to applicable Federal and state
franchise laws except where any failure of a Dealer Agreement to be in
full force and effect, valid and binding or enforceable would not,
individually or in the aggregate, have a Material Adverse Effect; the
Company or the applicable subsidiaries are in compliance with all terms
and conditions of the Dealer Agreements, and, to the best knowledge of
the Company, there has not occurred any default under any of the Dealer
Agreements or any event that with the giving of notice or the lapse of
time would constitute a default thereunder except any default which
would not, individually or in the aggregate, have a Material Adverse
Effect.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release of the
Firm Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
The Company may specify in the Pricing Agreement applicable to any
Designated Shares that the Company thereby grants to the Underwriters the right
(an "Option") to purchase at their election up to the number of Optional Shares
set forth in such Pricing Agreement, on the terms set forth in the paragraph
above, for the sole purpose of covering sales of the Firm Shares in excess of
the number of Firm Shares set forth in Schedule II to the Pricing Agreement. Any
such election to purchase Optional Shares may be exercised by written notice
from the Representatives to the Company given within a period specified in the
Pricing Agreement, setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by the Representatives but in no event earlier than the First Time of
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Delivery (as defined in Section 4 hereof) or, unless the Representatives and the
Company otherwise agree in writing, earlier than or later than the respective
number of business days after the date of such notice set forth in such Pricing
Agreement.
The number of Optional Shares to be added to the number of Firm Shares
to be purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall be, in each case, the
number of Optional Shares which the Company has been advised by the
Representatives have been attributed to such Underwriter; provided that, if the
Company has not been so advised, the number of Optional Shares to be so added
shall be, in each case, that proportion of Optional Shares which the number of
Firm Shares to be purchased by such Underwriter under such Pricing Agreement
bears to the aggregate number of Firm Shares (rounded as the Representatives may
determine to the nearest 100 shares). The total number of Designated Shares to
be purchased by all the Underwriters pursuant to such Pricing Agreement shall be
the aggregate number of Firm Shares set forth in Schedule I to such Pricing
Agreement plus the aggregate number of Optional Shares which the Underwriters
elect to purchase.
4. Certificates for the Firm Shares and the Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours' prior notice, shall be delivered by or on
behalf of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company to Xxxxxxx, Sachs & Co. at least forty-eight
hours in advance as specified in such Pricing Agreement, (i) with respect to the
Firm Shares, all in the manner and at the place and time and date specified in
such Pricing Agreement or at such other place and time and date as the
Representatives and the Company may agree upon in writing, such time and date
being herein called the "First Time of Delivery" and (ii) with respect to the
Optional Shares, if any, in the manner and at the time and date specified by the
Representatives in the written notice given by the Representatives of the
Underwriters' election to purchase such Optional Shares, or at such other time
and date as the Representatives and the Company may agree upon in writing, such
time and date, if not the First Time of Delivery, herein called the "Second Time
of Delivery". Each such time and date for delivery is herein called a "Time of
Delivery".
5. The Company agrees with each of the Underwriters of any Designated
Shares:
(a) To prepare the Prospectus as amended or supplemented in
relation to the applicable Designated Shares in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Shares or, if
applicable, such earlier time as may be required by Rule 424(b); to
make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Shares and prior to any Time of
Delivery for such Shares which shall be disapproved by the
Representatives for such Shares promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment
or supplement after any Time of Delivery for such Shares and furnish
the Representatives with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Section
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13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or
sale of such Shares, and during such same period to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any prospectus relating to the Shares, of the suspension of
the qualification of such Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of any
prospectus relating to the Shares or suspending any such qualification,
to promptly use its best efforts to obtain the withdrawal of such
order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Shares, provided 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;
(c) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with copies of the Prospectus in
New York City as amended or supplemented in such quantities as the
Representatives may reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or
sale of the Shares and if at such time any event shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Act or the
Exchange Act, to notify the Representatives and upon their request to
file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
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(e) During the period beginning from the date of the Pricing
Agreement for such Designated Shares and continuing to and including
the date 60 days after the date of the Pricing Agreement not to offer,
sell, contract to sell or otherwise dispose of, except as provided
hereunder, any common stock or any securities of the Company that are
substantially similar to such Designated Shares, including but not
limited to any securities that are convertible into or exchangeable
for, or that represent the right to receive, common stock or any such
substantially similar securities (other than (i) pursuant to employee
stock option plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the date of
the Pricing Agreement for such Designated Shares or (ii) in connection
with and as consideration for acquisitions of automobile dealerships;
provided that the proposed transferee agrees in writing for the benefit
of the Underwriters to be bound by the foregoing provisions) without
the prior written consent of the Representatives;
(f) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on
the date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act;
(g) During a period of five years from the date hereof, to
furnish (unless otherwise publicly available on Xxxxx) to the
Representatives copies of all reports or other communications
(financial or other) furnished to stockholders of the Company, and to
deliver to the Representatives (i) as soon as practicable after they
are available, copies of any reports and financial statements furnished
to or filed with the Commission or any securities exchange (other than
filings made on a confidential basis) on which the Shares or any class
of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the
Company as the Representatives may from time to time reasonably request
(such financial statements to be on a consolidated basis to the extent
the accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the Commission);
and
(h) To use the net proceeds received by it from the sale of the
Shares pursuant to this Agreement and any Pricing Agreement in the
manner specified in the Prospectus under the caption "Use of Proceeds".
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Blue Sky Memorandum, closing documents (including compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Shares; (iii) all expenses in connection with the qualification of the
Shares for offering and sale under state securities laws as provided in Section
5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in
10
connection with the Blue Sky survey(s); (iv) any filing fees incident to, and
the fees and disbursements of counsel for the Underwriters in connection with,
any required reviews by the National Association of Securities Dealers, Inc. of
the terms of the sale of the Shares; (v) the cost of preparing certificates for
the Shares; (vi) the cost and charges of any transfer agent or registrar or
dividend disbursing agent; and (vii) all other costs and expenses incident to
the performance of its obligations hereunder and under any Options which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Shares by them, and any
advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Shares under
the Pricing Agreement relating to such Designated Shares shall be subject, in
the discretion of the Representatives, to the condition that all representations
and warranties and other statements of the Company in or incorporated by
reference in the Pricing Agreement relating to such Designated Shares are, at
and as of each Time of Delivery for such Designated Shares, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Shares shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters, shall have
furnished to the Representatives such written opinion or opinions,
dated the Time of Delivery for such Designated Shares, with respect to
the Designated Shares, this Agreement, the Pricing Agreement, the
Registration Statement and the Prospectus as well as such other related
matters as the Representatives may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Xxxxxx & Xxxxxx L.L.P., counsel for the Company, shall have
furnished to the Representatives their written opinion (a draft of
which is attached hereto as Annex III), dated the Time of Delivery for
such Designated Shares, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented;
11
(ii) The Company's authorized capital stock is as set
forth in the Prospectus as amended or supplemented, and all of
the issued shares of capital stock of the Company (including
the Designated Shares being delivered at such Time of
Delivery) have been duly and validly authorized and issued and
are fully paid and non-assessable; and the Designated Shares
conform in all material respects to the description thereof in
the Prospectus as amended or supplemented;
(iii) This Agreement and the Pricing Agreement with
respect to the Designated Shares have been duly authorized,
executed and delivered by the Company;
(iv) The issue and sale of the Designated Shares
being delivered at such Time of Delivery and the compliance by
the Company with all of the provisions of this Agreement and
the Pricing Agreement with respect to the Designated Shares
and the consummation of the transactions herein and therein
contemplated will not (A) conflict with or result in a breach
or violation of any of the terms or provisions of, or
constitute a default under, any Dealer Agreement, indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any
of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property
or assets of the Company or any of its subsidiaries is subject
and which is material to the Company and its subsidiaries
taken as a whole, (B) result in any violation of the
provisions of the Certificate of Incorporation or By-laws of
the Company or (C) result in a violation of any statute or any
order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties
(except that such counsel need express no opinion with respect
to compliance with the anti-fraud provisions of Federal or
state securities laws or Blue Sky laws with respect to this
paragraph, and except in the case of clauses (A) and (C) for
such breaches or violations that could not reasonably be
expected to have a Material Adverse Effect);
(v) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Designated Shares being delivered at such Time of
Delivery, or the consummation by the Company of the
transactions contemplated by this Agreement or such Pricing
Agreement, except such as have been obtained under the Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
blue sky laws in connection with the purchase and distribution
of the Designated Shares by the Underwriters, and except where
failure to obtain such consent, approval, authorization,
order, registration or qualification would not have a Material
Adverse Effect;
(vi) The statements set forth in the Prospectus as
amended or supplemented under the caption "Description of
Capital Stock" and the description of the Company's common
stock incorporated by reference in the Prospectus, insofar as
they purport to constitute a summary of the terms of the
Shares, and under the captions "Plan of Distribution" and
"Underwriting", insofar as they purport
12
to describe the provisions of the laws and documents referred
to therein, are accurate in all material respects;
(vii) The Company is not an "investment company" or
an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act;
(viii) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the
financial statements, including the notes thereto, and
financial statement schedules and other financial and
accounting information included therein, as to which such
counsel need express no opinion), when they became effective
or were filed with the Commission, as the case may be,
appeared on their face to comply as to form in all material
respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder (such counsel may state that, in passing upon such
form, they have necessarily assumed the correctness and
completeness of the statements made there).
(ix) The Registration Statement and the Prospectus as
amended or supplemented and any further amendments and
supplements thereto made by the Company prior to the Time of
Delivery for such Designated Shares (other than the financial
statements, including the notes thereto, and financial
statement schedules and other financial and accounting
information included therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the Act and the rules and regulations
thereunder;
Such counsel shall also state that, although they are not passing upon,
do not assume any responsibility for, and have not independently
verified, the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Prospectus and any further
amendments or supplements to the Prospectus made by the Company prior
to such Time of Delivery, except for those referred to in the opinion
in subsections (ii) and (vi) of this Section 7(c), and assume no
responsibility for and have not independently verified the accuracy,
completeness or fairness of the financial statements, including the
notes thereto and the financial statement schedules and other financial
and accounting information included in the Registration Statement, the
Prospectus and any further amendments or supplements to the Prospectus
made by the Company prior to such Time of Delivery (and have not
examined the financial records from which such statements and data were
derived), no information has come to their attention that causes them
to believe that:
as of its effective date, the Registration Statement
or any further amendment thereto made by the Company
prior to the Time of Delivery (other than the
financial statements, including the notes thereto,
and financial statement schedules and other financial
and accounting information included therein, as to
which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to
state a material fact required to be stated therein
or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus as
amended or supplemented or any further amendment or
supplement thereto made by the Company prior to the
Time of Delivery (other than the financial
13
statements, including the notes thereto, and
financial statement schedules and other financial and
accounting information included therein, as to which
such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to
state a material fact necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading or that,
as of such Time of Delivery, the Prospectus as
amended or supplemented or any further amendment or
supplement thereto made by the Company prior to such
Time of Delivery (other than the financial
statements, including the notes thereto, and
financial statement schedules and other financial and
accounting information included therein, as to which
such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state
a material fact necessary to make the statements
therein, in the light of the circumstances under
which they were made, not misleading; and they do not
know of any amendment to the Registration Statement
required to be filed or any contracts or other
documents of a character required to be filed as an
exhibit to the Registration Statement or required to
be incorporated by reference into the Prospectus as
amended or supplemented or required to be described
in the Registration Statement or the Prospectus as
amended or supplemented which are not filed or
incorporated by reference or described as required.
(d) On the date of the Pricing Agreement for such Designated
Shares at a time prior to the execution of the Pricing Agreement with
respect to such Designated Shares and at the Time of Delivery for such
Designated Shares, Xxxxxx Xxxxxxxx LLP shall have furnished to the
Representatives a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to the
Representatives, to the effect set forth in Annex II hereto;
(e) (i) The Company and its subsidiaries, taken as a whole, shall
not have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Shares any loss or interference with their business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus as amended prior to the date of the Pricing Agreement
relating to the Designated Shares, and (ii) since the respective dates
as of which information is given in the Prospectus as amended prior to
the date of the Pricing Agreement relating to the Designated Shares
there shall not have been any change in the capital stock (other than
the exercise of certain employee stock options and awards) or increase
in short-term debt or long-term debt of the Company and its
subsidiaries, taken as a whole (other than floor plan borrowings in the
ordinary course of business), or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Shares, the effect of which, in any such case described in
Clause (i) or (ii), is in the judgment of the Representatives so
material and adverse as to make it impracticable or inadvisable to
proceed with the offering or the delivery of the Designated
14
Shares on the terms and in the manner contemplated in the Prospectus as
first amended or supplemented relating to the Designated Shares;
(f) On or after the date of the Pricing Agreement relating to the
Designated Shares (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating
of any of the Company's debt securities;
(g) On or after the date of the Pricing Agreement relating to the
Designated Shares there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York or Texas State authorities or a
material disruption in commercial banking or securities settlement or
clearance services in the United States; (iv) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war or (v)
the occurrence of any other calamity or crisis or any change in
financial, political or economic conditions in the United States or
elsewhere, if the effect of any such event specified in clause (iv) or
(v) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Shares on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Shares;
(h) The Shares at each Time of Delivery shall have been duly
listed, subject to notice of issuance, on the New York Stock Exchange;
(i) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of the Pricing
Agreement relating to such Designated Shares; and
(j) The Company shall have furnished or caused to be furnished to
the Representatives at the Time of Delivery for such Designated Shares
a certificate or certificates of officers of the Company satisfactory
to the Representatives as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as
to the performance by the Company of all of its obligations hereunder
to be performed at or prior to such Time of Delivery, as to the matters
set forth in subsections (a) and (e) of this Section and as to such
other matters as the Representatives may reasonably request.
8. (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 an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented or any other prospectus relating to the Shares, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
15
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
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented or any other prospectus relating to
the Shares, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares.
(b) Each Underwriter will 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 an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented or any other prospectus
relating to the Shares, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
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 any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented or any other
prospectus relating to the Shares, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel 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 shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise
16
or judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters of the Designated Shares on
the other from the offering of the Designated Shares to which such loss, claim,
damage or liability (or action in respect thereof) relates. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters of the Designated
Shares on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by such 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 on the one hand or such Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in 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 such action
or claim. 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 applicable Designated Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the Underwriters
of Designated Shares in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations with respect to such
Shares and not joint.
(e) The obligations of the Company under this Section 8 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 8 shall be in addition to any liability which
17
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Shares or Optional Shares which it has agreed to purchase under the
Pricing Agreement relating to such Designated Shares, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Firm Shares or Optional Shares, as the case
may be, then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Shares on such terms. In the event
that, within the respective prescribed period, the Representatives notify the
Company that they have so arranged for the purchase of such Designated Shares,
or the Company notifies the Representatives that it has so arranged for the
purchase of such Designated Shares, the Representatives or the Company shall
have the right to postpone a Time of Delivery for such Designated Shares for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to the Pricing Agreement
with respect to such Designated Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of such Shares which remains unpurchased does
not exceed one-eleventh of the aggregate number of the Firm Shares or Optional
Shares, as the case may be, to be purchased at the respective Time of Delivery,
then the Company shall have the right to require each non-defaulting Underwriter
to purchase the number of Firm Shares or Optional Shares, as the case may be,
which such Underwriter agreed to purchase under the Pricing Agreement relating
to such Designated Shares and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Firm Shares
or Optional Shares, as the case may be, which such Underwriter agreed to
purchase under such Pricing Agreement) of the Firm Shares or Optional Shares, as
the case may be, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of Firm Shares or Optional Shares, as the case
may be, which remains unpurchased exceeds one-eleventh of the aggregate number
of the Firm Shares or Optional Shares, as the case may be, to be purchased at
the respective Time of Delivery, as referred to in subsection (b) above, or if
the Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Shares or Optional Shares,
as the case may be, of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Firm Shares or the Option relating to such
Optional Shares, as the case may be, shall thereupon terminate, without
liability
18
on the part of any non-defaulting Underwriter or the Company except for the
expenses to be borne by the Company and the Underwriters as provided in Section
6 hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter or the Company,
or any officer or director or controlling person of the Company and shall
survive delivery of and payment for the Shares.
11. If any Pricing Agreement or Option shall be terminated pursuant to
Section 9 hereof, the Company shall not then be under any liability to any
Underwriter with respect to the Firm Shares or Optional Shares with respect to
which such Pricing Agreement shall have been terminated except as provided in
Sections 6 and 8 hereof; but, if for any other reason, the Designated Shares are
not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Designated
Shares, but the Company shall then be under no further liability to any
Underwriter with respect to such Designated Shares except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Shares shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
19
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
Very truly yours,
Group 1 Automotive, Inc.
By: /s/ X.X. Xxxxxxxxxxxxx, Xx.
--------------------------------------
X.X. Xxxxxxxxxxxxx, Xx.
Chairman, President and
Chief Executive Officer
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SCHEDULE A
Ford Motor Company
General Motors Corporation
DaimlerChrysler
Toyota Motor Corp. and Toyota Motor Sales, U.S.A., Inc.
Honda Motor Co., Ltd. and American Honda Motor Co., Inc.
Nissan Motor Co., Ltd. and Nissan Motor North America, Inc.
Mitsubishi Motor Sales of America, Inc.
American Isuzu Motors, Inc.
American Suzuki Motor Corporation
Volvo Cars of North America, Inc.
Audi of America, Inc.
Subaru of America, Inc.
Mazda Motor of America, Inc.
Hyundai Motor AmericaVolkswagen of America, Inc.
BMW of North America, Inc.
Porsche Cars North America, Inc.
Kia Motors America, Inc.
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ANNEX II
Pursuant to Section 7(e) of the Underwriting Agreement, Xxxxxx Xxxxxxxx
LLP shall furnish letters to the Underwriters, dated the respective dates of
delivery thereof, in form and substance as set forth below::
[The following form of comfort letter to be replaced by the agreed upon
form of AA letter]
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of
the Act and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, financial forecasts and/or pro forma financial
information) examined by them and included or incorporated by
reference in the Registration Statement or the Prospectus comply as
to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the
related published rules and regulations thereunder; and, if
applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in
such letter, as indicated in their reports thereon, copies of which
have been furnished to the representative or representatives of the
Underwriters (the "Representatives") such term to include an
Underwriter or Underwriters who act without any firm being
designated as its or their representatives and are attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public
Accountants of the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included in the
Company's quarterly report on Form 10-Q incorporated by reference
into the Prospectus as indicated in their reports thereon copies of
which are attached hereto; and on the basis of specified procedures
including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding
whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of
the Company for the five
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most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report
on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the
audited consolidated financial statements for five such fiscal years
which were included or incorporated by reference in the Company's
Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing
procedures that caused them to believe that this information does
not conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d), respectively, of
Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing
standards, consisting of a reading of the unaudited financial
statements and other information referred to below, a reading of the
latest available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus,
inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements
of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus and/or
included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act and the related published rules and regulations,
or (ii) any material modifications should be made to the
unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus or included in the
Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Company's Annual Report on Form 10-K for the most recent
fiscal year;
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(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest balance sheet included or incorporated
by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in Clause (E)
there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the
limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an audit
in accordance with generally accepted auditing standards, with
respect to
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certain amounts, percentages and financial information specified by
the Representatives which are derived from the general accounting
records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference), or in
Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives or in documents
incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of
the Company and its subsidiaries and have found them to be in
agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Shares for purposes
of the letter delivered at the Time of Delivery for such Designated Shares.
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ANNEX III
Pursuant to Section 7(c) of the Underwriting Agreement, Xxxxxx & Xxxxxx L.L.P.,
counsel for the Company, shall furnish to the Underwriters their written
opinion, dated the Time of Delivery, in form and substance as set forth below:
[Insert agreed upon form of V&E opinion]
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