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EXHIBIT 1.1
$400,000,000
BUDGET GROUP, INC.
91/8% SENIOR NOTES DUE APRIL 1, 2006
PURCHASE AGREEMENT
April 8, 1999
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX, XXXXX & CO.
NATIONSBANC XXXXXXXXXX SECURITIES LLC,
As Representatives of the Several Purchasers,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Budget Group, Inc., a Delaware corporation (the
"COMPANY"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several initial purchasers named in Schedule A hereto (the
"PURCHASERS") U.S.$400,000,000 principal amount of its 91/8% Senior Notes Due
April 1, 2006 (the "Offered Securities") to be issued under an indenture, dated
as of April 13, 1999 (the "INDENTURE"), between the Company and The Bank of New
York, as Trustee (the "TRUSTEE"). The Securities Act of 1933, as amended, is
herein referred to as the "SECURITIES ACT."
Holders (including subsequent transferees) of the Notes will be
entitled to the benefit of a Registration Rights Agreement (the "REGISTRATION
RIGHTS AGREEMENT") of even date hereof, among the Company and the Initial
Purchasers, pursuant to which the Company will be obligated to file with the
Securities and Exchange Commission (the "COMMISSION") (i) a registration
statement under the Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT")
registering an issue of senior notes of the Company (the "EXCHANGE NOTES") which
shall be identical in all material respects to the Offered Securities (except
that the Exchange Notes will not contain terms with respect to transfer
restrictions or provisions for additional interest) and (ii) under certain
circumstances, a shelf registration statement (the "SHELF REGISTRATION
STATEMENT") pursuant to Rule 415 under the Securities Act.
The Company hereby agrees with the Purchasers as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Purchasers that:
(a) A preliminary offering circular and an offering circular
relating to the Offered Securities to be offered by the Purchasers have
been prepared by the Company. Such preliminary offering circular and
offering circular, as supplemented as of the date of this Agreement,
and any other document approved by the Company for use in connection
with the contemplated resale of the Offered Securities are hereinafter
collectively referred to as the "OFFERING DOCUMENT". On the date of
this Agreement, the Offering Document does not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or 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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The preceding sentence does not apply to statements in or omissions
from the Offering Document based upon written information furnished to
the Company by any Purchaser through Credit Suisse First Boston
Corporation ("CSFBC") specifically for use therein, it being understood
and agreed that the only such information is that described as such in
Section 7(b). Except as disclosed in the Offering Document, on the date
of this Agreement, the Company's Annual Report on Form 10-K most
recently filed with the Commission and all subsequent reports
(collectively, the "EXCHANGE ACT REPORTS") that have been filed by the
Company with the Commission or sent to stockholders pursuant to the
Securities Exchange Act of 1934 (as amended, the "EXCHANGE ACT") do not
include any 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. Such
documents, when they were filed with the Commission, conformed in all
material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.
(b) The Company has been duly incorporated and is an existing
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 Offering Document; and the
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or
lease of property or 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 and other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole ("MATERIAL ADVERSE EFFECT").
(c) Each significant subsidiary (as defined in Rule 1-02(w) of
Regulation S-X of the Commission) (each of such corporations or other
legal entities hereinafter referred to as a "SUBSIDIARY" and all such
corporations or other legal entities being, collectively, the
"SUBSIDIARIES") of the Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Offering Document; and each Subsidiary of the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification; all of the
issued and outstanding capital stock of each Subsidiary of the Company
has been duly authorized and validly issued and is fully paid and
nonassessable; and the capital stock of each Subsidiary owned by the
Company, is owned free from liens, encumbrances and defects. The
Subsidiaries are listed in Schedule B hereto.
(d) The Indenture has been duly authorized; the Offered
Securities have been duly authorized; and when the Offered Securities
are delivered and paid for pursuant to this Agreement on the Closing
Date (as defined below), the Indenture will have been duly executed and
delivered, such Offered Securities will have been duly executed,
authenticated, issued and delivered and will conform to the description
thereof contained in the Offering Document and the Indenture and such
Offered Securities will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(e) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company; and the Registration
Rights Agreement conforms in all material respects to the description
thereof contained in the Offering Document, and constitutes a valid and
legally binding obligation of the Company, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
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(f) Except as disclosed in the Offering Document, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Purchaser for a brokerage commission, finder's fee or other like
payment.
(g) Assuming the accuracy of the representations and
warranties of the Purchasers contained in Section 4 of this Agreement,
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 and the
Registration Rights Agreement in connection with the issuance and sale
of the Offered Securities by the Company except for the order of the
Commission declaring the Exchange Offer Registration Statement or the
Shelf Registration Statement effective.
(h) The execution, delivery and performance of the Indenture,
the Registration Rights Agreement and this Agreement and the issuance
and sale of the Offered Securities and compliance with the terms and
provisions thereof will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or order of any governmental agency or
body or any court, domestic or foreign, having jurisdiction over the
Company or any Subsidiary or any of their properties, or any agreement
or instrument to which the Company or any such Subsidiary is a party or
by which the Company or any such Subsidiary is bound or to which any of
the properties of the Company or any such Subsidiary is subject, or the
charter or by-laws of the Company or any such Subsidiary except such
breaches, violations or defaults that, individually or in the
aggregate, would not have a Material Adverse Effect and the Company has
full power and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement.
(i) This Agreement has been duly authorized, executed and
delivered by the Company.
(j) The Company and the Subsidiaries have (i) such ownership
and possession rights with respect to their respective assets and
properties as are necessary for continuing conduct of their respective
business, as described in the Offering Document, 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
or any such Subsidiary is a party as lessee; all material leases to
which the Company or any such Subsidiary is a party are in full force
and effect; none of the Company or any Subsidiary has been notified
that a lease is invalid or unenforceable; and no default by the Company
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.
(k) The Company and its Subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by
them and have not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(l) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a Material Adverse Effect.
(m) The Company 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 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 or any such Subsidiary, would individually or in the
aggregate have a Material Adverse Effect.
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(n) Except as disclosed in the Offering Document, neither the
Company nor any of the Subsidiaries is in violation of any statute, any
rule, regulation, decision or order of any governmental agency or body
or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection
or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, "ENVIRONMENTAL LAWS"), owns or operates
any real property contaminated with any substance that is subject to
any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Company is not aware
of any pending investigation which might lead to such a claim.
(o) Except as disclosed in the Offering Document, there are no
pending actions, suits or proceedings against or affecting the Company,
any Subsidiary or any of their respective properties that, if
determined adversely to the Company or any such Subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to
perform its obligations under the Indenture or this 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.
(p) The financial statements included in the Offering Document
present fairly in all material respects the financial position of the
Company and its consolidated subsidiaries as of the dates shown and
their results of operations and cash flows for the periods shown, and
such financial statements have been prepared in conformity with the
generally accepted accounting principles in the United States applied
on a consistent basis; and the assumptions used in preparing the pro
forma financial statements included in the Offering Document provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the
related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts.
(q) Except as disclosed in the Offering Document, since the
date of the latest audited financial statements included in the
Offering Document there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries taken as a whole,
and, except as disclosed in or contemplated by the Offering Document,
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(r) The Company is not an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company Act
of 1940 (the "INVESTMENT COMPANY ACT") ; and 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
Offering Document, will not be an "investment company" as defined in
the Investment Company Act.
(s) No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Offered Securities are
listed on any national securities exchange registered under Section 6
of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system.
(t) Assuming the accuracy of the representations of the
Purchasers set forth in Section 4 hereof, the offer and sale of the
Offered Securities in the manner contemplated by this Agreement will be
exempt from the registration requirements of the Securities Act by
reason of Section 4(2)
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thereof and Regulation S thereunder; and it is not necessary to qualify
an indenture in respect of the Offered Securities under the Trust
Indenture Act of 1939 (the "TRUST INDENTURE ACT").
(u) Neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf (i) has, within the six-month
period prior to the date hereof, offered or sold in the United States
or to any U.S. person (as such terms are defined in Regulation S under
the Securities Act) the Offered Securities, or any security of the same
class or series as the Offered Securities or (ii) has offered or will
offer or sell the Offered Securities (A) in the United States by means
of any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act or (B) with respect to
any such securities sold in reliance on Rule 903 of Regulation S
("REGULATION S") under the Securities Act, by means of any directed
selling efforts within the meaning of Rule 902(b) of Regulation S. The
Company, its affiliates and any person acting on its or their behalf
have complied and will comply with the offering restrictions
requirement of Regulation S. The Company has not entered and will not
enter into any contractual arrangement with respect to the distribution
of the Offered Securities except for this Agreement and the
Registration Rights Agreement.
(v) The Company is subject to Section 13 or 15(d) of the
Exchange Act.
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
Purchasers, and the Purchasers agree, severally and not jointly, to purchase
from the Company, at a purchase price of 97.25% of the principal amount thereof
plus accrued interest from 13, 1999 to the Closing Date (as hereinafter defined)
the respective principal amounts of Offered Securities set forth opposite the
names of the several Purchasers in Schedule A hereto.
The Company will deliver against payment of the purchase price the
Offered Securities in the form of one or more permanent global certificates in
definitive form (the "GLOBAL SECURITIES") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent Global Securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Offering Document. Payment for the Offered
Securities shall be made by the Purchasers in Federal (same day) funds by wire
transfer to an account designated by the Company at a bank acceptable to CSFBC
at the office of Cravath, Swaine & Xxxxx at 10:00 a.m. (New York time), on April
13, 1999, 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 "CLOSING DATE", against delivery to the Trustee as custodian for DTC
of the Global Securities representing all of the Offered Securities. The Global
Securities will be made available for checking at the above office of Cravath,
Swaine & Xxxxx at least 24 hours prior to the Closing Date.
4. Representations by Purchasers; Resale by Purchasers. (a) Each
Purchaser severally represents and warrants to the Company that it is an
"accredited investor" within the meaning of Regulation D under the Securities
Act.
(b) Each Purchaser severally acknowledges that the Offered
Securities have not been registered under the Securities Act and may
not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with
Regulation S or pursuant to an exemption from the registration
requirements of the Securities Act. Each Purchaser severally represents
and agrees that it has offered and sold the Offered Securities, and
will offer and sell the Offered Securities as part of its distribution
at any time, only in accordance with Rule 903 or Rule 144A under the
Securities Act ("RULE 144A"). Accordingly, neither such Purchaser nor
its affiliates, nor any persons acting on its or their behalf, have
engaged or will engage in any directed selling efforts with respect to
the Offered Securities, and such Purchaser, its affiliates and all
persons acting on its or their behalf have complied and will comply
with the offering restrictions
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requirement of Regulation S. Terms used in this subsection (b) have the
meanings given to them by Regulation S.
(c) Each Purchaser severally agrees that it and each of its
affiliates has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities
except for any such arrangements with the other Purchasers or
affiliates of the other Purchasers or with the prior written consent of
the Company.
(d) Each Purchaser severally agrees that it and each of its
affiliates will not offer or sell the Offered Securities in the United
States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act,
including, but not limited to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar
media or broadcast over television or radio, or (ii) any seminar or
meeting whose attendees have been invited by any general solicitation
or general advertising. Each Purchaser severally agrees, with respect
to resales made in reliance on Rule 144A of any of the Offered
Securities, to deliver either with the confirmation of such resale or
otherwise prior to settlement of such resale a notice to the effect
that the resale of such Offered Securities has been made in reliance
upon the exemption from the registration requirements of the Securities
Act provided by Rule 144A.
(e) Each of the Purchasers severally represents and agrees
that (i) it has not offered or sold and prior to the date six months
after the date of issue of the Offered Securities will not offer or
sell any Offered Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Xxx 0000 with respect
to anything done by it in relation to the Offered Securities in, from
or otherwise involving the United Kingdom; and (iii) it has only issued
or passed on and will only issue or pass on in the United Kingdom any
document received by it in connection with the issue of the Offered
Securities to a person who is of a kind described in Article 11(3) of
the Financial Services Xxx 0000 (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
5. Certain Agreements of the Company. The Company agrees with the
several Purchasers that:
(a) The Company will advise CSFBC promptly of any proposal to
amend or supplement the Offering Document and will not effect such
amendment or supplementation without CSFBC's consent, which consent
shall not be unreasonably withheld. If, at any time prior to the
completion of the resale of the Offered Securities by the Purchasers,
any event occurs as a result of which the Offering Document 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, not misleading, the Company promptly will notify CSFBC of
such event and promptly will prepare, at its own expense, an amendment
or supplement that will correct such statement or omission. Neither
CSFBC's consent to, nor the Purchasers' delivery to offerees or
investors of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6.
(b) The Company will furnish to CSFBC copies of any
preliminary offering circular, the Offering Document and all amendments
and supplements to such documents, in each case as soon as available
and in such quantities as CSFBC reasonably requests, and the Company
will furnish to CSFBC on the date hereof four certificated copies of
the Offering Document signed by a duly authorized officer of the
Company, one of which will include the independent accountants' reports
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therein manually signed by such independent accountants. At any time
when the Company is not subject to Section 13 or 15(d) of the Exchange
Act and any Offered Securities are outstanding, the Company will
promptly furnish or cause to be furnished to CSFBC (and, upon request,
to each of the other Purchasers) and, upon request of holders and
prospective purchasers of the Offered Securities, to such holders and
purchasers, copies of the information required to be delivered to
holders and prospective purchasers of the Offered Securities pursuant
to Rule 144A(d)(4) under the Securities Act (or any successor provision
thereto) in order to permit compliance with Rule 144A in connection
with resales by such holders of the Offered Securities. The Company
will pay the expenses of printing and distributing to the Purchasers
all such documents.
(c) The Company will arrange for the qualification of the
Offered Securities for sale and the determination of their eligibility
for investment under the laws of such jurisdictions in the United
States and Canada as CSFBC designates and will continue such
qualifications in effect so long as required for the resale of the
Offered Securities by the Purchasers, provided that the Company will
not be required to qualify as a foreign corporation or to file a
general consent to service of process in any such state.
(d) During the period of three years hereafter, the Company
will furnish to CSFBC and, upon request, to each of the other
Purchasers, 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 CSFBC and, upon request, to each of the other
Purchasers (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission
under the Exchange Act or mailed to shareholders, and (ii) from time to
time, such other information concerning the Company as CSFBC may
reasonably request.
(e) During the period of two years after the Closing Date or,
if earlier, until such time as the Offered Securities are no longer
restricted securities (as defined in Rule 144 under the Securities
Act), the Company will, upon request, furnish to CSFBC, each of the
other Purchasers and any holder of Offered Securities a copy of the
restrictions on transfer applicable to the Offered Securities.
(f) During the period of two years after the Closing Date or,
if earlier, until such time as the Offered Securities are no longer
restricted securities (as defined in Rule 144 under the Securities
Act), the Company will not, and will not permit any of its affiliates
(as defined in Rule 144 under the Securities Act) to, resell any of the
Offered Securities that have been reacquired by any of them.
(g) During the period of two years after the Closing Date the
Company will not be or become an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act.
(h) The Company will pay all expenses incidental to the
performance of its obligations under this Agreement, the Registration
Rights Agreement and the Indenture, including: (i) the fees and
expenses of the Trustee and its professional advisers; (ii) all
expenses in connection with the execution, issue, authentication,
packaging and initial delivery of the Offered Securities, the
preparation and printing of this Agreement, the Registration Rights
Agreement, the Offered Securities, the Indenture, the Offering Document
and amendments and supplements thereto, and any other document relating
to the issuance, offer, sale and delivery of the Offered Securities;
(iii) the cost of qualifying the Offered Securities for trading in The
PortalSM Market ("PORTAL") and any expenses incidental thereto; (iv)
the cost of any advertising approved by the Company in connection with
the issue of the Offered Securities; (v) for any expenses (including
fees and disbursements of counsel) incurred in connection with
qualification of the Offered Securities for sale under the laws of such
jurisdictions in the United States and Canada as CSFBC designates and
the printing of memoranda relating thereto; (vi) for any fees charged
by investment rating agencies
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for the rating of the Offered Securities and (vii) for expenses
incurred in distributing preliminary offering circulars and the
Offering Document (including any amendments and supplements thereto) to
the Purchasers. The Company will also pay or reimburse the Purchasers
(to the extent incurred by them) for all travel expenses of the
Company's officers and employees and any other expenses of the Company
in connection with attending or hosting meetings with prospective
purchasers of the Offered Securities from the Purchasers.
(i) In connection with the offering, until CSFBC shall have
notified the Company and the other Purchasers of the completion of the
resale of the Offered Securities, neither the Company nor any of its
affiliates has or will, either alone or with one or more other persons,
bid for or purchase for any account in which it or any of its
affiliates has a beneficial interest any Offered Securities or attempt
to induce any person to purchase any Offered Securities; and neither it
nor any of its affiliates will make bids or purchases for the purpose
of creating actual, or apparent, active trading in, or of raising the
price of, the Offered Securities.
6. Conditions of the Obligations of the Purchasers. The obligations of
the several Purchasers to purchase and pay for the Offered Securities will be
subject to the accuracy of the representations and warranties on the part of the
Company herein, to the accuracy of the statements of officers of the Company
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 Purchasers shall have received a letter, dated the
date of this Agreement, of Xxxxxx Xxxxxxxx LLP in agreed form
confirming that they are independent public accountants within the
meaning of the Securities Act and the applicable published rules and
regulations thereunder ("RULES AND REGULATIONS") and to the effect
that:
(i) in their opinion the financial statements
examined by them and included in the Offering Document and in
the Exchange Act Reports comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the related published Rules and
Regulations;
(ii) on the basis of a reading of the latest
available interim 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) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt
of the Company and its consolidated subsidiaries or,
at the date of the latest available balance sheet
read by such accountants, there was any decrease in
consolidated net current assets or stockholders'
equity, as compared with amounts shown on the latest
balance sheet included in the Offering Document; or
(B) for the period from the closing date of
the latest income statement included in the Offering
Document to the closing date of the latest available
income statement read by such accountants there were
any decreases, as compared with the corresponding
period of the previous year, in consolidated net
sales, net operating income, consolidated income
before extraordinary items or net income or in the
ratio of earnings to fixed charges;
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except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases which the Offering Document
disclose have occurred or may occur or which are described in
such letter;
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Offering Document and
the Exchange Act Reports (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; and
(iv) on the basis of a reading of the pro forma
consolidated statement of operations, carrying out of certain
specified procedures, reading of minutes, inquiries of certain
officials the Company who have responsibility for financial
and accounting matters and proving the arithmetic accuracy of
the application of the pro forma adjustments to the historical
amounts in the pro forma consolidated statement of operations,
nothing came to their attention that caused them to believe
that the unaudited pro forma consolidated statement of
operations included in the Offering Document does not comply
as to form in all material respects with the applicable
accounting requirements of the Securities Act and the related
Rules and Regulations thereunder or that the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of that statement or on the pro
forma basis described in the notes thereto.
(b) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) a change in U.S. or
international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the judgment of a
majority in interest of the purchasers including CSFBC, be likely to
prejudice materially the success of the proposed issue, sale or
distribution of the Offered Securities, whether in the primary market
or in respect of dealings in the secondary market, or (ii) (A) any
change, or any development or event involving a prospective change, in
the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole which,
in the judgment of a majority in interest of the Purchasers including
CSFBC, is material and adverse and makes it impractical or inadvisable
to proceed with completion of the offering or the sale of and payment
for the Offered Securities; (B) any downgrading in the rating of any
debt securities or preferred stock of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Securities 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 (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (C) any
material suspension or material limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the
over-the-counter market; (D) any banking moratorium declared by U.S.
Federal or New York authorities; or (E) 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 Purchasers including CSFBC, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the offering
or sale of and payment for the Offered Securities.
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(c) The Purchasers shall have received opinions, dated the
Closing Date, of King & Spalding, counsel for the Company, to the
effect of paragraphs (i) - (vi) below, and of Xxxxxx X. Xxxxxx, general
counsel to the Company, to the effect of paragraph (vii) below, that:
(i) The Company has been duly incorporated and is an
existing 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
Offering Document and Exchange Act Reports; and the Company
has corporate power and authority to enter into and perform
its obligations under this Agreement, the Indenture and the
Registration Rights Agreement and to issue and sell the
Offered Securities as contemplated by this Agreement.
(ii) This Agreement, the Indenture and the
Registration Rights Agreement have been duly authorized,
executed and delivered by the Company, and the Offered
Securities have been duly authorized and executed by the
Company. This Agreement, the Indenture and the Registration
Rights Agreement constitute valid and binding obligations of
the Company, enforceable against the Company in accordance
with their terms, except to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity
(whether considered in a proceeding in equity or at law) and,
in the case of this Agreement and the Registration Rights
Agreement, except as rights to indemnity and contribution
thereunder may be limited by state or federal securities laws
or the public policy underlying such laws or other
considerations of public policy; the Offered Securities, when
executed, authenticated and paid for in accordance with the
terms of the Indenture, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy,
insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or other
similar laws as now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of
equity (whether considered in a proceeding in equity or at
law). The Offered Securities, this Agreement, the Indenture
and the Registration Rights Agreement conform to the
descriptions thereof contained in the Offering Document in all
material respects.
(iii) No consent, approval, authorization or order
of, or filing with, any governmental agency or body or any
court is required for the performance by the Company of this
Agreement and the Registration Rights Agreement and the
issuance or sale of the Offered Securities by the Company,
except such, if any, as may be required under the Securities
Act and applicable blue sky laws in connection with the
issuance or sale of any such Offered Securities.
(iv) The execution, delivery and performance of the
Indenture, the Registration Rights Agreement and this
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, (a) any
statute, any rule, regulation or order of any governmental
agency or body or any court having jurisdiction over the
Company or any Subsidiary or any of their properties, that is
known to such counsel, (b) any agreement or instrument filed
as an exhibit to any of the Exchange Act Reports and to which
the Company is a party or to which any of the properties of
the Company is subject, or (c) the charter or bylaws of the
Company.
(v) 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
Offering
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Document, will not be an "investment company" as defined in
the Investment Company Act.
(vi) Assuming (a) the accuracy of the representations
and warranties of the Company set forth in Section 2 of this
Agreement (other than clauses (r), (s), (t) and (u) thereof)
and of the Purchasers set forth in Section 4 of this
Agreement, (b) the due performance by the Company of the
covenants and agreements set forth in Section 5 of this
Agreement and the due performance by the Purchasers of the
covenants and agreements set forth in Section 4 of this
Agreement, (c) compliance by the Purchasers with the offering
and transfer procedures and restrictions described in the
Offering Document and (d) the accuracy of the representations
and warranties made in accordance with the Offering Document
by buyers to whom the Purchasers initially resell the Offered
Securities, the offer, sale and delivery of the Offered
Securities to the Purchasers in the manner contemplated in
this Agreement and the Offering Document and the initial
resale of the Offered Securities in the manner contemplated by
this Agreement and the Offering Document do not require
registration under the Securities Act and the Indenture is not
required to be qualified under the Trust Indenture Act (it
being understood that we express no opinion in this paragraph
as to any subsequent resale of any Offered Securities).
In addition, such counsel shall state that, in their
capacity as counsel for the Company, they have participated in
conferences with officers and other representatives of the
Company, representatives of the independent public accountants
for the Company, and with representatives and counsel for the
Purchasers at which the contents of the Offering Document were
discussed, and, although such counsel is not passing on and
does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Offering Document, on the basis of the information that was
developed in the course of such counsel's performance of the
services referred to above, nothing has come to such counsel's
attention that causes such counsel to believe that the
Offering Document (taken together with the Exchange Act
Reports), as of its date and the Closing Date, contained or
contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading, except that such counsel
need not express any opinion or belief with respect to the
financial statements, schedules and other financial data
included or incorporated by reference therein or omitted
therefrom.
(vii) There are no pending actions, suits or
proceedings against or affecting the Company, any of its
subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
Material Adverse Effect, or would materially and adversely
affect the ability of the Company to perform its obligations
under the Indenture, this Agreement or the Registration Rights
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 such counsel's knowledge,
contemplated.
(d) The Purchasers shall have received from Cravath, Swaine &
Xxxxx, counsel for the Purchasers, such opinion or opinions, dated the
Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities, the Offering Document, the
exemption from registration for the offer and sale of the Offered
Securities by the Company to the several Purchasers and the resales by
the several Purchasers as contemplated hereby and other related matters
as CSFBC 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.
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(e) The Purchasers shall have received a certificate, dated
the Closing Date, of the President, the Chief Executive Officer or any
Executive Vice President and a principal financial or accounting
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, 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 the Closing Date, and that, subsequent to the
dates of the most recent financial statements in the Offering Document
or Exchange Act Reports there has been no material adverse change, nor
any development or event involving a prospective material adverse
change, in the condition (financial or other), business, properties or
results of operations of the Company and its subsidiaries taken as a
whole except as set forth in or contemplated by the Offering Document
and Exchange Act Reports or as described in such certificate.
(f) The Purchasers shall have received a letter, dated the
Closing Date, of Xxxxxx Xxxxxxxx LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than three days prior to
the Closing Date for the purposes of this subsection.
The Company will furnish the Purchasers with such conformed copies of
such opinions, certificates, letters and documents as the Purchasers reasonably
request. CSFBC may in its sole discretion waive on behalf of the Purchasers
compliance with any conditions to the obligations of the Purchasers hereunder,
whether in respect of an Optional Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Purchaser, its partners, directors and officers and each
person, if any, who controls such Purchaser within the meaning of Section 15 of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such Purchaser may become subject, under the Securities Act or
the Exchange 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
the Offering Document, or any amendment or supplement thereto, or any related
preliminary offering circular or the Exchange Act Reports, 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 in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, including any losses, claims, damages or liabilities arising out of
or based upon the Company's failure to perform its obligations under Section
5(a) of this Agreement, and will reimburse each Purchaser for any legal or other
expenses reasonably incurred by such Purchaser 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 Purchaser
through CSFBC specifically for use therein, it being understood and agreed that
the only such information consists of the information described as such in
subsection (b) below; and provided, further, that with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission from
any preliminary offering circular the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Purchaser that sold Offered
Securities to the person asserting any such losses, claims, damages or
liabilities, to the extent that such sale was an initial resale by such
Purchaser and any such loss, claim, damage or liability of such Purchaser
results from the fact that there was not sent or given to such person, at or
prior to the written confirmation of the sale of such Offered Securities to such
person, a copy of the Offering Document (exclusive of any material included
therein but not attached thereto) if the Company had previously furnished copies
thereof to such Purchaser.
(b) Each Purchaser will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages or liabilities to which the Company may
become
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subject, under the Securities Act or the Exchange 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 the Offering Document, or any amendment or
supplement thereto, or any related preliminary offering circular, 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 in order to make the
statements therein, in the light of the circumstances under which they were
made, 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 Purchaser through CSFBC 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 Purchaser consists of
the following information in the Offering Document furnished on behalf of each
Purchaser: under the caption "Plan of Distribution" paragraphs three, six, nine
and ten, and the third sentence of paragraph eight; provided, however, that the
Purchasers shall not be liable for any losses, claims, damages or liabilities
arising out of or based upon the Company's failure to perform its obligations
under Section 5(a) of this Agreement.
(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 and does not include a statement as to and an admission of
fault, culpability or failure to act by or on behalf of any indemnified party.
(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 Purchasers on the other from the offering of the Offered
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 Purchasers 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 Purchasers on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company bear to the total discounts and commissions received by the
Purchasers from the Company under this Agreement. 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 Purchasers
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
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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
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Offered Securities purchased by it were
resold exceeds the amount of any damages which such Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. The Purchasers' obligations in this subsection (d) to
contribute are several in proportion to their respective purchase 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
Purchaser within the meaning of the Securities Act or the Exchange Act; and the
obligations of the Purchasers under this Section shall be in addition to any
liability which the respective Purchasers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act.
8. Default of Purchasers. If any Purchaser or Purchasers default in
their obligations to purchase Offered Securities hereunder and the aggregate
principal amount of Offered Securities that such defaulting Purchaser or
Purchasers agreed but failed to purchase does not exceed 10% of the total
principal amount of Offered Securities, CSFBC may make arrangements satisfactory
to the Company for the purchase of such Offered Securities by other persons,
including any of the Purchasers, but if no such arrangements are made by the
Closing Date, the non-defaulting Purchasers shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Offered
Securities that such defaulting Purchasers agreed but failed to purchase. If any
Purchaser or Purchasers so default and the aggregate principal amount of Offered
Securities with respect to which such default or defaults occur exceeds 10% of
the total principal amount of Offered Securities and arrangements satisfactory
to CSFBC and the Company for the purchase of such Offered 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 Purchaser or the
Company, except as provided in Section 9. As used in this Agreement, the term
"Purchaser" includes any person substituted for a Purchaser under this Section.
Nothing herein will relieve a defaulting Purchaser 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 Purchasers 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 Purchaser, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 or if for any reason the purchase of the Offered Securities by the
Purchasers 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 Purchasers pursuant to Section 7 shall remain
in effect. If the purchase of the Offered Securities by the Purchasers is not
consummated for any reason other than solely because of the occurrence of any
event specified in clause (C), (D) or (E) of Section 6(b)(ii), the Company will
reimburse the Purchasers for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) reasonably incurred by them in connection
with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Purchasers will be mailed, delivered, telecopied or telegraphed and
confirmed to the Purchasers, c/o Credit Suisse First Boston Corporation, Eleven
Madison Avenue, New York, N.Y. 10010-3629, Attention: Investment Banking
Department--Transactions Advisory Group, or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at 000 Xxxxx Xxxxxx, Xxxxx
000, Xxxxxxx Xxxxx, XX 00000,
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Attention: General Counsel; provided, however, that any notice to a Purchaser
pursuant to Section 7 will be mailed, delivered, telecopied or telegraphed and
confirmed to such Purchaser.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder, except that holders of Offered Securities shall
be entitled to enforce the agreements for their benefit contained in the second
and third sentences of Section 5(b) hereof against the Company as if such
holders were parties thereto.
12. 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.
13. 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.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
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If the foregoing is in accordance with the Purchasers' understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the several
Purchasers in accordance with its terms.
Very truly yours,
BUDGET GROUP, INC.
by /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President, General
Counsel and Secretary
The foregoing Purchase
Agreement is hereby
confirmed and accepted as
of the date first above
written.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX, XXXXX & CO.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
Acting on behalf of themselves and as the Representative of the several
Purchasers
CREDIT SUISSE FIRST BOSTON CORPORATION
by /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Director
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SCHEDULE A
Purchaser Principal Amount
--------- ----------------
Credit Suisse First Boston Corporation.......................................... $270,000,000
Xxxxxxx, Xxxxx & Co............................................................. 70,000,000
NationsBanc Xxxxxxxxxx Securities LLC........................................... 60,000,000
------------
Total.................................................................. $400,000,000
============
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SCHEDULE B
Significant Subsidiaries
Budget Rent a Car Corporation
Team Fleet Financing Corporation
Budget Rent a Car Systems, Inc.
Ryder TRS
Budget Car Sales, Inc.
18
