EXHIBIT 1.1
[Insert Principal Amount or Number of Shares]
CENTRAL FREIGHT LINES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
[INSERT DATE]
BEAR, XXXXXXX & CO. INC.
As Representative of the Several Underwriters,
named in Schedule I attached hereto (the "Representative")
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. Central Freight Lines, Inc., a Nevada corporation
("COMPANY") proposes to issue and sell __________ shares of its Common Stock,
par value $0.001 per share ("SECURITIES"), and the stockholders listed in
Schedule A hereto ("SELLING STOCKHOLDERS") propose severally to sell an
aggregate of _______________ outstanding shares of the Securities (such shares
of Securities being hereinafter referred to as the "FIRM SECURITIES"). The
Selling Stockholders also propose to sell to the Underwriters, at the option of
the Underwriters, an aggregate of not more than __________ additional shares of
its Securities, as set forth below (such ___________ additional shares being
hereinafter referred to as the "OPTIONAL SECURITIES"). The Firm Securities and
the Optional Securities are herein collectively called the "OFFERED SECURITIES".
As part of the offering contemplated by this Agreement, ______________________
(the "DESIGNATED UNDERWRITER") has agreed to reserve out of the Firm Securities
purchased by it under this Agreement, up to __________________ shares, for sale
to the Company's directors, officers, employees and other parties associated
with the Company (collectively, "PARTICIPANTS"), as set forth in the Prospectus
(as defined herein) under the heading "Underwriting" (the "Directed Share
Program"). The Firm Securities to be sold by the Designated Underwriter pursuant
to the Directed Share Program (the "DIRECTED SHARES") will be sold by the
Designated Underwriter pursuant to this Agreement at the public offering price.
Any Directed Shares not subscribed for by the end of the business day on which
this Agreement is executed will be offered to the public by the Underwriters as
set forth in the Prospectus. The Company and the Selling Stockholders hereby
agree with the several Underwriters named in Schedule B hereto ("UNDERWRITERS")
as follows:
2. Representations and Warranties of the Company and the Selling
Stockholders. (a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. 333- ) relating to the
Offered Securities, including a form of prospectus, has been filed with
the Securities and Exchange Commission ("COMMISSION") and either (A)
has been declared effective under the Securities Act of 1933 ("ACT")
and is not proposed to be amended or (B) is proposed to be amended by
amendment or post-effective amendment. If such registration statement
(the "INITIAL REGISTRATION STATEMENT") has been declared effective,
either (A) an additional registration statement (the "ADDITIONAL
REGISTRATION STATEMENT") relating to the Offered Securities may have
been filed with the Commission pursuant to Rule 462(b) ("RULE 462(b)")
under the Act and, if so filed, has become effective upon
filing pursuant to such Rule and the Offered Securities all have been
duly registered under the Act pursuant to the initial registration
statement and, if applicable, the additional registration statement or
(B) such an additional registration statement is proposed to be filed
with the Commission pursuant to Rule 462(b) and will become effective
upon filing pursuant to such Rule and upon such filing the Offered
Securities will all have been duly registered under the Act pursuant to
the initial registration statement and such additional registration
statement. If the Company does not propose to amend the initial
registration statement or if an additional registration statement has
been filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has been
filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c) ("RULE 462(c)") under the
Act or, in the case of the additional registration statement, Rule
462(b). For purposes of this Agreement, "EFFECTIVE TIME" with respect
to the initial registration statement or, if filed prior to the
execution and delivery of this Agreement, the additional registration
statement means (A) if the Company has advised the Representative that
it does not propose to amend such registration statement, the date and
time as of which such registration statement, or the most recent
post-effective amendment thereto (if any) filed prior to the execution
and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c),
or (B) if the Company has advised the Representative that it proposes
to file an amendment or post-effective amendment to such registration
statement, the date and time as of which such registration statement,
as amended by such amendment or post-effective amendment, as the case
may be, is declared effective by the Commission. If an additional
registration statement has not been filed prior to the execution and
delivery of this Agreement but the Company has advised the
Representative that it proposes to file one, "EFFECTIVE TIME" with
respect to such additional registration statement means the date and
time as of which such registration statement is filed and becomes
effective pursuant to Rule 462(b). "EFFECTIVE DATE" with respect to the
initial registration statement or the additional registration statement
(if any) means the date of the Effective Time thereof. The initial
registration statement, as amended at its Effective Time, including all
information contained in the additional registration statement (if any)
and deemed to be a part of the initial registration statement as of the
Effective Time of the additional registration statement pursuant to the
General Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b) ("RULE
430A(b)") under the Act, is hereinafter referred to as the "INITIAL
REGISTRATION STATEMENT". The additional registration statement, as
amended at its Effective Time, including the contents of the initial
registration statement incorporated by reference therein and including
all information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "ADDITIONAL REGISTRATION
STATEMENT". The Initial Registration Statement and the Additional
Registration are hereinafter referred to collectively as the
"REGISTRATION STATEMENTS" and individually as a "REGISTRATION
STATEMENT". The form of prospectus relating to the Offered Securities,
as first filed with the Commission pursuant to and in accordance with
Rule 424(b) ("RULE 424(b)") under the Act or (if no such filing is
required), as included in a Registration Statement, is hereinafter
referred to as the "PROSPECTUS". No document has been or will be
prepared or distributed in reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement: (A)
on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all material respects to
the requirements of the Act and the rules and regulations of the
Commission ("RULES AND REGULATIONS") and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (B) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement conformed
or will conform, in all material respects to the requirements of the
Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and (C) on
the date of this Agreement, the Initial Registration Statement and, if
the Effective Time of the Additional Registration Statement is prior to
the execution and delivery of this Agreement, the Additional
Registration Statement each conforms, and at the time of filing of the
Prospectus pursuant to Rule 424(b) or (if no such filing is required)
at the Effective Date of the Additional Registration Statement in which
the Prospectus is included, each Registration Statement and the
Prospectus will conform, in all material respects to the
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requirements of the Act and the Rules and Regulations, and neither of
such documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of
this Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and the Prospectus will
conform in all material respects to the requirements of the Act and the
Rules and Regulations, neither of such documents will include any
untrue statement of a material fact or will omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, and no Additional Registration Statement has
been or will be filed. The two preceding sentences do not apply to
statements in or omissions from a Registration Statement or the
Prospectus based upon written information furnished to the Company by
any Underwriter specifically for use therein, it being understood and
agreed that the only such information is that described as such in
Section 7(c) hereof.
(iii) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
Nevada, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; 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 be so qualified would not
individually or in the aggregate, have a material adverse effect on the
condition (financial or other), business, properties, results of
operations or prospects of the Company and its subsidiaries taken as a
whole ("MATERIAL ADVERSE EFFECT").
(iv) Each subsidiary 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 Prospectus; 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, except where the
failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect; 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, directly or
through subsidiaries, is owned free from liens, encumbrances and
defects, except for such liens or encumbrances as are disclosed in the
Registration Statement.
(v) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus in the column headed
"Actual" under the caption "Capitalization" and, immediately after
giving effect to the issuance and sale of the Firm Securities and the
other transactions contemplated by this Agreement, the Registration
Statement and the Prospectus, will be as set forth in the column headed
"ProForma As Adjusted" under the caption "Capitalization." The Offered
Securities and all other outstanding shares of capital stock of the
Company have been duly authorized; all outstanding shares of capital
stock of the Company are, and when the Firm Securities to be sold by
the Company pursuant to this Agreement are delivered and paid for in
accordance with this Agreement on the First Closing Date (as defined
below), such Firm Securities will be, validly issued, fully paid and
nonassessable and will conform to the description thereof contained in
the Prospectus; and the stockholders of the Company have no preemptive
rights with respect to the Securities. Upon payment for and delivery of
the Firm Securities to be sold by the Company pursuant to this
Agreement, the Underwriters will acquire good and valid title to such
Firm Securities, free and clear of all liens, encumbrances, preemptive
rights, subscription rights, other rights to purchase, voting or
transfer restrictions and other claims.
(vi) Except as disclosed in the Prospectus, 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
Underwriter for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(vii) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to a Registration Statement or in any
securities being registered
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pursuant to any other registration statement filed by the Company under
the Act.
(viii) The Securities have been approved for listing subject
to notice of issuance on The Nasdaq Stock Market's National Market
("NASDAQ").
(ix) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
to be obtained or made by the Company for the consummation of the
transactions contemplated by this Agreement in connection with the sale
of the Firm Securities, except such as have been obtained and made
under the Act and the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), such as may be required under state securities laws or
the by-laws or rules and regulations of the National Association of
Securities Dealers, Inc. ("NASD") or NASD Regulation, Inc. ("NASDR").
(x) The execution, delivery and performance of this Agreement,
and the consummation of the transactions herein contemplated will not
(i) result in a breach or violation of any of the terms and provisions
of, or constitute a default under, (a) any statute, rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, (b) 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 (c) the
charter or by-laws of the Company or any such subsidiary or (ii) result
in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of the Company or any subsidiary, except
where a breach, violation or default of the type specified in clauses
(i)(a) and (i)(b) above and the liens, charges, claims or encumbrances
described in clause (ii) above would not, individually or in the
aggregate, have a Material Adverse Effect. The Company has full power
and authority to authorize, issue and sell the Firm Securities as
contemplated by this Agreement.
(xi) This Agreement has been duly authorized, executed and
delivered by the Company.
(xii) Except as disclosed in the Prospectus, the Company and
its subsidiaries have good and marketable title to all real properties
and all other properties and assets owned by them, in each case free
from liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be made
thereof by them; and except as disclosed in the Prospectus, the Company
and its subsidiaries hold any leased real or personal property under
valid and enforceable leases with no exceptions that would materially
interfere with the use made or to be made thereof by them.
(xiii) The Company and its subsidiaries possess such
certificates, authorities, licenses or permits issued by appropriate
governmental agencies or bodies ("PERMITS") necessary to conduct the
business now operated by them, except for such failures to have Permits
that would not, individually or in the aggregate, have a Material
Adverse Effect. The Company and its subsidiaries have not received any
notice of proceedings relating to the revocation or modification of any
such Permit that, if determined adversely to the Company or its
subsidiary, would individually or in the aggregate have a Material
Adverse Effect. The Company and its subsidiaries have fulfilled and
performed all of their material obligations with respect to such
Permits, and no event or change in condition has occurred which allows,
or after notice or lapse of time or both would allow, revocation or
termination thereof or result in any other material impairment of the
rights of the holder of any such Permit, except as to such
qualifications as are set forth in the Prospectus and except for such
failures which would not, individually or in the aggregate, have a
Material Adverse Effect.
(xiv) 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.
(xv) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively,
"INTELLECTUAL PROPERTY RIGHTS") necessary to conduct the business now
operated by them, or presently employed by them, and have not received
any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
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(xvi) Except as disclosed in the Prospectus, neither the
Company nor any of its 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 Material Adverse Effect; and the Company is not aware of
any pending investigation which might lead to such a claim.
(xvii) Except as disclosed in the Prospectus, 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 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.
(xviii) KPMG, who has certified the financial statements and
supporting schedules and information of the Company and its
subsidiaries that are included in the Registration Statements, is an
independent public accountant as required by the Act and the Rules and
Regulations.
(xix) The financial statements included in each Registration
Statement and the Prospectus 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, except for changes in the
Company's method of accounting for goodwill and other intangible assets
in accordance with Statement of Financial Accounting Standards No. 142,
Goodwill and Other Intangible Assets, in 2002; and the schedules
included in each Registration Statement present fairly in all material
respects the information required to be stated therein; and the
assumptions used in preparing the pro forma financial statements
included in each Registration Statement and the Prospectus 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.
(xx) The Company and its subsidiaries maintain a system of
internal accounting and other controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets, (iii)
access to assets is permitted only in accordance with management's
general or specific authorization, and (iv) the recorded accounting for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxi) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included in the Prospectus
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 Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(xxii) 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 Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940.
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(xxiii) The Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or
supplements thereto will comply, with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus or any
preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program, and that (B)
no authorization, approval, consent, license, order, registration or
qualification of or with any government, governmental instrumentality
or court, other than such as have been obtained, is necessary under the
securities law and regulations of foreign jurisdictions in which the
Directed Shares are offered outside the United States.
(xxiv) The Company has not offered, or directed the
Underwriters to offer, any offered Securities to any person pursuant to
the Directed Share Program with the specific intent to unlawfully
influence (A) a customer or supplier of the Company to alter the
customer's or supplier's level or type of business with the Company or
(B) a trade journalist or publication to write or publish favorable
information about the Company or its products.
(xxv) Except as disclosed in the Prospectus or except as
otherwise would not result in a Material Adverse Effect; (A) all
federal, state and local Tax Returns required to be filed by the
Company have been timely filed; (B) all such Tax Returns were correct
and complete in all material respects; (C) the Company has timely paid
all amounts due in respect of Taxes (whether or not shown on any Tax
Return), or has otherwise set up reserves in accordance with GAAP in
respect of all Taxes for any periods not fully determined and such
reserves are reasonable; (D) there are no pending, or to the Company's
knowledge, threatened, actions or proceedings for the assessment or
collection of Taxes against the Company, and, to the Company's
knowledge, no authority intends to assess any additional Taxes for any
period for which Tax Returns have been filed; (E) the Company has not
failed to pay any Taxes which could result in an encumbrance on its
assets; (F) the Company is not currently the beneficiary of any
extension of time within which to file any Tax Return; (G) during the
past five (5) years, no claim has ever been made by an authority in a
jurisdiction where the Company does not file Tax Returns that it is or
may be subject to taxation by that jurisdiction; (H) the Company has
withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party; and (I) the
Company has not waived any statute of limitations in respect of Taxes
or agreed to any extension of time with respect to a Tax assessment or
deficiency. For the purposes of the foregoing, (x) "TAX" or "TAXES"
means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under
Internal Revenue Code section 59A), customs duties, capital stock,
franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not, and including
any obligation to indemnify or otherwise assume or succeed to the Tax
liability of another person and (y) "TAX RETURN" means any return,
declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.
(xxvi) The Company meets, and at all times since its formation
has met, the following requirements under Code section 1361(b)(1): (A)
it is a domestic corporation; (B) it is not an ineligible corporation
(as described in Code section 1361(b)(2)); (C) it does not have more
than 75 stockholders; (D) only individuals, decedents' estates, estates
of individuals in bankruptcy, and trusts qualifying under Code section
1361(c)(2) are stockholders; (E) no stockholder is a nonresident alien;
(F) the Company has only one class of stock; and (G) an appropriate
election under Code section 1362 was properly and timely filed. Except
for Central Receivables (for which late application for treatment as a
qualified subchapter S corporation was made on September 23, 2003),
each subsidiary of the Company is a "qualified subchapter S subsidiary"
under Code section 1361(b)(3). For purposes of the foregoing, "CODE"
means the Internal Revenue Code of 1986, as amended.
(xxvii) Neither the Company nor any subsidiary (i) is in
violation of its certificate or articles of incorporation or by-laws,
(ii) is in default under, and no event has occurred which, with notice
or lapse of time or both, would constitute a default under or result in
the creation or imposition of any lien, charge or encumbrance upon any
of its property or assets pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a
party or by which it is bound or to which any of its property or assets
is subject or (iii) is in violation in any respect of any law, rule
regulation, ordinance, directive,
6
judgment, decree or order of any judicial, regulatory or other legal or
governmental agency or body, foreign or domestic, except (in the case
clauses (ii) and (iii) above) violations, defaults, liens, charges or
encumbrances that could not (individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect and except (in
the case of clause (ii) alone) for any lien, charge or encumbrance
disclosed in the Registration Statement and the Prospectus.
(xxviii) No relationship, direct or indirect, exists between
or among any of the Company or any affiliate of the Company, on the one
hand, and any director, officer, stockholder, customer or supplier of
the Company or any affiliate of the Company, on the other hand, which
is required by the Act or the Rules and Regulations to be described in
the Registration Statement or the Prospectus which is not so described
and described as required. There are no outstanding loans, advances
(except normal advances for business expenses in the ordinary course of
business) or guarantees of indebtedness by the Company to or for the
benefit of any of the officers or directors of the Company or any of
their respective family members, except as disclosed in the
Registration Statement and the Prospectus. The Company has not, in
violation of the Xxxxxxxx-Xxxxx Act, directly or indirectly, including
through a subsidiary, extended or maintained credit, arranged for the
extension of credit, or renewed an extension of credit, in the form of
a personal loan to or for any director or executive officer of the
Company.
(xxix) The Company is in compliance with applicable provisions
of the Xxxxxxxx-Xxxxx Act that are effective and is actively taking
steps to ensure that it will be in compliance with other applicable
provisions of the Xxxxxxxx-Xxxxx Act upon the effectiveness of such
provisions.
(xxx) The Company and the Subsidiaries maintain insurance in
such amounts and covering such risks (including the self-insured
retention disclosed in the Registration Statement and Prospectus) as
the Company reasonably considers adequate for the conduct of its
business and the value of its properties, all of which insurance is in
full force and effect, except where the failure to maintain such
insurance could not reasonably be expected to have a Material Adverse
Effect. There are no claims by the Company or any Subsidiary under any
such policy or instrument as to which any insurance company has denied
liability and, if coverage ultimately is determined to be unavailable,
could be reasonably expected to have a Material Adverse Effect. The
Company reasonably believes that it will be able to renew its existing
insurance as and when such coverage expires or will be able to obtain
replacement insurance adequate for the conduct of the business and the
value of its properties at a cost that would not have a Material
Adverse Effect; provided, that the effects of changes in the general
market for insurance in the trucking industry shall not be considered
in determining whether there is or has been a Material Adverse Effect.
(b) Each Selling Stockholder severally represents and warrants
to, and agrees with, the several Underwriters that:
(i) This Agreement has been duly authorized, executed and
delivered by the Selling Stockholder.
(ii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
to be obtained or made by the Selling Stockholder for the consummation
of the transactions contemplated by this Agreement or the Custody
Agreement in connection with the sale of the Offered Securities sold by
the Selling Stockholder, except such as have been obtained and made
under the Act and such as may be required under state securities laws
or the by-laws or rules and regulations of the NASD or the NASDR.
(iii) The execution, delivery and performance of this
Agreement and the Custody Agreement and the consummation of the
transactions herein and therein contemplated will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, (i) any statute, any rule, or regulation
applicable to the Selling Stockholder or to transactions of the type
contemplated by this Agreement or the Custody Agreement any order of
any governmental agency or body or any court having jurisdiction over
the Selling Stockholder or any of his, her, or its properties, (ii) any
agreement or instrument to which the Selling Stockholder is a party or
by which the Selling Stockholder is bound or to which any of the
properties of the Selling Stockholder is subject, including any trust
agreement, or (iii) the charter, bylaws, organizational document, if
any, of the Selling Stockholder.
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(iv) The Selling Stockholder has and on each Closing Date
hereinafter mentioned will have valid title to the Offered Securities
to be delivered by the Selling Stockholder on such Closing Date and
full right, power and authority to enter into this Agreement and to
sell, assign, transfer and deliver the Offered Securities to be
delivered by the Selling Stockholder on such Closing Date hereunder;
and upon the delivery of and payment for the Offered Securities on each
Closing Date in accordance with this Agreement and the Custody
Agreement the several Underwriters will acquire valid and unencumbered
title to the Offered Securities to be delivered by the Selling
Stockholder on such Closing Date.
(v) The Selling Stockholder has reviewed and is familiar with
the Registration Statement and the Prospectus and: (A) has no knowledge
of any information with regard to the Company or any of its
subsidiaries which (1) is not disclosed in the Registration Statement
and the Prospectus, and (2) concerns an event or circumstance that
could reasonably be expected to have a Material Adverse Effect; (B) has
no knowledge of any misstatement or a material fact or failure to state
a material fact necessary to make the statements in the Prospectus, in
light of the circumstances under which they were made, not misleading;
and (C) is not prompted to sell the Offered Securities to be sold by
the Selling Stockholder by any material information concerning the
Company or any of its subsidiaries which is not set forth in the
Registration Statement and the Prospectus.
(vi) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Selling Stockholder
and any person that would give rise to a valid claim against the
Selling Stockholder or any Underwriter for a brokerage commission,
finder's fee or other like payment in connection with this offering.
(vii) The only trusts that held or will hold S corporation
stock of the Company or any of the Company's subsidiaries are the Xxxxx
and Xxxxx Xxxxx Family Trust, created on December 11, 1987, as amended,
and the Moyes Children's Trust, created on December 14, 1992.
(viii) The Xxxxx and Xxxxx Xxxxx Trust is an eligible S
corporation stockholder having complied with all the requirements of
Code section 1361(c)(2)(a)(i).
(ix) The Moyes Children's Trust is an eligible S corporation
stockholder having complied with all the requirements of Code section
1361(e) to be an "electing small business trust".
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 and each Selling
Stockholder agree, severally and not jointly, to sell to each Underwriter, and
each Underwriter agrees, severally and not jointly, to purchase from the Company
and each Selling Stockholder, at a purchase price of $__________ per share, that
number of Firm Securities (rounded up or down, as determined by Bear, Xxxxxxx &
Co. Inc. ("BEAR XXXXXXX") in its discretion, in order to avoid fractions)
obtained by multiplying _______ Firm Securities in the case of the Company and
the number of Firm Securities set forth opposite the name of such Selling
Stockholder in Schedule A hereto, in the case of a Selling Stockholder, in each
case by a fraction the numerator of which is the number of Firm Securities set
forth opposite the name of such Underwriter in Schedule B hereto and the
denominator of which is the total number of Firm Securities.
Certificates in negotiable form for the Offered Securities to be sold
by the Selling Stockholders hereunder have been placed in custody, for delivery
under this Agreement, under Custody Agreements made with ______________________,
as custodian ("CUSTODIAN"). Each Selling Stockholder agrees that the shares
represented by the certificates held in custody for the Selling Stockholders
under such Custody Agreements are subject to the interests of the Underwriters
hereunder, that the arrangements made by the Selling Stockholders for such
custody are to that extent irrevocable, and that the obligations of the Selling
Stockholders hereunder shall not be terminated by operation of law, whether by
the death of any individual Selling Stockholder or the occurrence of any other
event, or in the case of a trust, by the death of any trustee or trustees or the
termination of such trust. If any individual Selling Stockholder or any such
trustee or trustees should die, or if any other such event should occur, or if
any of such trusts should terminate, before the delivery of the Offered
Securities hereunder, certificates for such Offered Securities shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement as if such death or other event or termination had not occurred,
regardless of whether or not the Custodian shall have received notice of such
death or other event or
8
termination.
The Company and the Custodian will deliver the Firm Securities to the
Representative through the facilities of the Depository Trust Company ("DTC")
unless the Representative shall otherwise instruct, for the accounts of the
Underwriters, against payment of the purchase price in Federal (same day) funds
by wire transfer to an account or accounts at a bank or banks designated by the
Company or a Selling Stockholder and reasonably acceptable to Bear Xxxxxxx drawn
to the order of Central Freight Lines, Inc. in the case of ________ shares of
Firm Securities and the stockholders listed on Schedule A hereto in the case of
an aggregate of ________shares of Firm Securities, at the office of Akin Gump
Xxxxxxx Xxxxx & Xxxx LLP, 0000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000,
at 9:00 A.M., New York time, on ________, or at such other time not later than
seven full business days thereafter as Bear Xxxxxxx and the Company determine,
such time being herein referred to as the "FIRST CLOSING DATE". For purposes of
Rule 15c6-1 under the Exchange Act, the First Closing Date (if later than the
otherwise applicable settlement date) shall be the settlement date for payment
of funds and delivery of securities for all the Offered Securities sold pursuant
to the offering. The certificates for the Firm Securities so to be delivered
will be in definitive or book-entry form, in such denominations and registered
in such names as Bear Xxxxxxx requests and will be made available for checking
and packaging at the office of DTC or its designated custodian, unless the
Representative shall otherwise instruct, at least 24 hours prior to the First
Closing Date.
In addition, upon written notice from Bear Xxxxxxx given to the Company
and the Selling Stockholders from time to time not more than 30 days subsequent
to the date of the Prospectus, the Underwriters may purchase all or less than
all of the Optional Securities at the purchase price per Security to be paid for
the Firm Securities. The Selling Stockholders agree to sell to the Underwriters
the number of Optional Securities specified in such notice and the Underwriters
agree, severally and not jointly, to purchase such Optional Securities. Such
Optional Securities shall be purchased for the account of each Underwriter in
the same proportion as the number of Firm Securities set forth opposite such
Underwriter's name bears to the total number of Firm Securities (subject to
adjustment by Bear Xxxxxxx to eliminate fractions) and may be purchased by the
Underwriters only for the purpose of covering over-allotments made in connection
with the sale of the Firm Securities. No Optional Securities shall be sold or
delivered unless the Firm Securities previously have been, or simultaneously
are, sold and delivered. The right to purchase the Optional Securities or any
portion thereof may be exercised from time to time and to the extent not
previously exercised may be surrendered and terminated at any time upon notice
by Bear Xxxxxxx to the Company and the Selling Stockholders.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by Bear
Xxxxxxx but shall be not later than five full business days after written notice
of election to purchase Optional Securities is given. The Custodian will deliver
the Optional Securities being purchased on each Optional Closing Date to the
Representative, through the facilities of DTC unless the Representative shall
otherwise instruct, for the accounts of the several Underwriters, against
payment of the purchase price therefor in Federal (same day) funds by wire
transfer to an account or accounts at a bank or banks designated by the Selling
Stockholders and reasonably acceptable to Bear Xxxxxxx drawn to the order of the
stockholders listed on Schedule A hereto, at the above office of Akin Gump
Xxxxxxx Xxxxx & Xxxx LLP. The certificates for the Optional Securities being
purchased on each Optional Closing Date will be in definitive or book-entry
form, in such denominations and registered in such names as Bear Xxxxxxx
requests upon reasonable notice prior to such Optional Closing Date and will be
made available for checking and packaging at the above office of DTC or its
designated custodian, unless the Representative shall otherwise instruct at a
reasonable time in advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company and the Selling Stockholders. The
Company and the Selling Stockholders agree with the several Underwriters and, as
applicable, the Company agrees with the Selling Stockholders that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Company will file the Prospectus with the Commission pursuant to and in
accordance with
9
subparagraph (1) (or, if applicable and if consented to by Bear
Xxxxxxx, subparagraph (4)) of Rule 424(b) not later than the earlier of
(A) the second business day following the execution and delivery of
this Agreement or (B) the fifteenth business day after the Effective
Date of the Initial Registration Statement.
The Company will advise Bear Xxxxxxx promptly of any such filing
pursuant to Rule 424(b). If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement and an additional registration statement is necessary to
register a portion of the Offered Securities under the Act but the
Effective Time thereof has not occurred as of such execution and
delivery, the Company will file the additional registration statement
or, if filed, will file a post-effective amendment thereto with the
Commission pursuant to and in accordance with Rule 462(b) on or prior
to 10:00 P.M., New York time, on the date of this Agreement or, if
earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later
date as shall have been consented to by Bear Xxxxxxx.
(b) The Company will advise Bear Xxxxxxx promptly of any
proposal to amend or supplement the initial or any additional
registration statement as filed or the related prospectus or the
Initial Registration Statement, the Additional Registration Statement
(if any) or the Prospectus and will not effect such amendment or
supplementation to which Bear Xxxxxxx objects in writing after being
timely furnished in advance a copy thereof; and the Company will also
advise Bear Xxxxxxx promptly of the effectiveness of each Registration
Statement (if its Effective Time is subsequent to the execution and
delivery of this Agreement) and of any amendment or supplementation of
a Registration Statement or the Prospectus and of the institution by
the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs 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 to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company will promptly notify Bear Xxxxxxx and the Selling
Stockholders of such event and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will
correct such statement or omission or an amendment which will effect
such compliance. Neither Bear Xxxxxxx' consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the
Initial Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"AVAILABILITY DATE" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "AVAILABILITY DATE" means the
90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Representative copies of
each Registration Statement one (1) of which will be signed and will
include all exhibits), each related preliminary prospectus, and, so
long as a prospectus relating to the Offered Securities is required to
be delivered under the Act in connection with sales by any Underwriter
or dealer, the Prospectus and all amendments and supplements to such
documents, in each case in such quantities as Bear Xxxxxxx reasonably
requests. The Prospectus shall be so furnished on or prior to 9:00
A.M., New York time, on the second business day following the later of
the execution and delivery of this Agreement or the Effective Time of
the Initial Registration Statement. All other such documents shall be
so furnished as soon as available. The Company will pay the expenses of
printing and distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions
(foreign and domestic) as Bear Xxxxxxx designates and will continue
such qualifications in effect so
10
long as required for the distribution.
(g) For a period of 180 days after the date of the Prospectus,
the Company will not, without the prior written consent of Bear
Xxxxxxx, (i) directly or indirectly, issue, offer, sell, agree to
issue, offer or sell, solicit offers to purchase, grant any call
option, warrant or other right to purchase, purchase any put option or
other right to sell, pledge, or otherwise dispose of any shares of its
securities or securities convertible into or exchangeable or usable for
any shares of its securities ("RELEVANT SECURITY"), or make any
announcement of any of the foregoing, (ii) establish or increase any
"put equivalent position" or liquidate or decrease any "call equivalent
position" (in each case within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder) with
respect to any Relevant Security, and (iii) otherwise enter into any
swap, derivative or other transaction or arrangement that transfers to
another, in whole or in part, any economic consequence of ownership of
a Relevant Security, whether or not such transaction is to be settled
by delivery of Relevant Securities, other securities, cash or other
consideration; other than (A) the sale of Offered Securities as
contemplated by this Agreement, (B) the Company's issuance of Common
Stock upon the exercise of currently outstanding options, (C) the grant
and exercise of options under, or the issuance and sale of Relevant
Securities pursuant to, employee stock option plans in effect on the
date hereof, each as described in the Registration Statement and the
Prospectus or (D) the issuance of up to 5% of the number of shares of
common stock outstanding as of the closing of this offering, which will
equal approximately 850,000 shares, in connection with one or more
acquisitions, provided that any recipient of those shares enters into a
similar lock-up agreement with the underwriters for the remainder of
the 180-day lock-up period described in this paragraph (g). In
addition, the Company will use its best efforts to obtain from each of
its stockholders listed on Schedule C hereto an executed undertaking
substantially in the form of Annex I hereto. The Company will not file
a registration statement under the Securities Act in connection with
any transaction by the Company or any person that is prohibited
pursuant to the foregoing, except for registration statements on Form
S-8 relating to employee benefit plans.
(h) The Company agrees with the several Underwriters and the
Selling Stockholders that the Company will pay all expenses incident to
the performance of the obligations of the Company and the Selling
Stockholders under this Agreement, for any filing fees and other
expenses (including fees and disbursements of counsel) in connection
with qualification of the Offered Securities for sale under the laws of
such jurisdictions as Bear Xxxxxxx designates and the printing of
memoranda relating thereto, for the filing fee incident to the review
by the NASD of the Offered Securities, for any 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, for any transfer taxes on the
sale by the Selling Stockholders of the Offered Securities to the
Underwriters and for expenses incurred in distributing preliminary
prospectuses and the Prospectus (including any amendments and
supplements thereto) to the Underwriters.
(i) For a period of 180 days after the date of the Prospectus,
each Selling Stockholder will not, without the prior written consent of
Bear Xxxxxxx, (i) directly or indirectly, issue, offer, sell, agree to
issue, offer or sell, solicit offers to purchase, grant any call
option, warrant or other right to purchase, purchase any put option or
other right to sell, pledge (except for Relevant Securities pledged as
security for personal business loans of Mr. Xxxxx Xxxxx) or otherwise
dispose of any Relevant Security, or make any announcement of any of
the foregoing, (ii) establish or increase any "put equivalent position"
or liquidate or decrease any "call equivalent position" (in each case
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder) with respect to any Relevant
Security, and (iii) otherwise enter into any swap, derivative or other
transaction or arrangement that transfers to another, in whole or in
part, any economic consequence of ownership of a Relevant Security,
whether or not such transaction is to be settled by delivery of
Relevant Securities, other securities, cash or other consideration;
other than (A) the sale of Offered Securities as contemplated by this
Agreement, (B) a transfer of Relevant Securities to an entity
controlled by the Selling Stockholder, a family member of the Selling
Stockholder, or a trust for the benefit of the Selling Stockholder or
any of the Selling Stockholder's family members, provided that the
transferee agrees in writing to be bound by the terms of this Section
5(i), or (C) a sale, transfer or other disposition of any Relevant
Securities acquired by the Selling Stockholder on the open market
subsequent to the date of the Prospectus, provided that any such sale,
transfer or other disposition fully complies with, and is not required
to be disclosed or
11
reported under, applicable law (including but not limited to Section 16
under the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder).
(j) In connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent
required by the NASD or the NASD rules from sale, transfer, assignment,
pledge or hypothecation for a period of three months following the date
of the effectiveness of the Registration Statement. The Designated
Underwriter will notify the Company as to which Participants will need
to be so restricted. The Company will direct the transfer agent to
place stop transfer restrictions upon such securities for such period
of time.
(k) The Company will pay all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share
Program and stamp duties, similar taxes or duties or other taxes, if
any, incurred by the Underwriters in connection with the Directed Share
Program. Furthermore, the Company covenants with the Underwriters that
the Company will comply with all applicable securities and other
applicable laws, rules and regulations in each foreign jurisdiction in
which the Directed Shares are offered in connection with the Directed
Share Program.
6. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders herein, to
the accuracy of the statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholders of their obligations hereunder and to the following additional
conditions precedent:
(a) The Representative shall have received a letter, dated the
date of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if
the Effective Time of the Initial Registration Statement is subsequent
to the execution and delivery of this Agreement, shall be prior to the
filing of the amendment or post-effective amendment to the registration
statement to be filed shortly prior to such Effective Time), of KPMG
LLP confirming that they are independent public accountants within the
meaning of the Act and the applicable published Rules and Regulations
thereunder and stating to the effect that:
(i) in their opinion the financial statements and
schedules examined by them and included in the Registration
Statements comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published Rules and Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards (SAS) No. 100, Interim
Financial Information, on the unaudited financial statements
included in the Registration Statements;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
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) the unaudited financial statements
included in the Registration Statements do not comply
as to form in all material respects with the
applicable accounting requirements of the Act and the
related published Rules and Regulations or any
material modifications should be made to such
unaudited financial statements for them to be in
conformity with GAAP;
(B) 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
12
date of the latest available balance sheet read by
such accountants, there was any decrease in
consolidated net current assets or net assets, as
compared with amounts shown on the latest balance
sheet included in the Prospectus; or
(C) for the period from the closing date of
the latest income statement included in the
Prospectus 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 and with
the period of corresponding length ended the date of
the latest income statement included in the
Prospectus, in consolidated net operating revenues or
net operating income in the total or per share
amounts of consolidated net income;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter;
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from
the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statements is subsequent to the execution and
delivery of this Agreement, "REGISTRATION STATEMENTS" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statements is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration Statement is
subsequent to such execution and delivery, "REGISTRATION STATEMENTS"
shall mean the Initial Registration Statement and the additional
registration statement as proposed to be filed or as proposed to be
amended by the post-effective amendment to be filed shortly prior to
its Effective Time, and (iii) "PROSPECTUS" shall mean the prospectus
included in the Registration Statements.
(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New
York time, on the date of this Agreement or such later date as shall
have been consented to by Bear Xxxxxxx. If the Effective Time of the
Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the time the Prospectus is printed and
distributed to any Underwriter, or shall have occurred at such later
date as shall have been consented to by Bear Xxxxxxx. If the Effective
Time of the Initial Registration Statement is prior to the execution
and delivery of this Agreement, the Prospectus shall have been filed
with the Commission in accordance with the Rules and Regulations and
Section 5(a) of this Agreement. Prior to such Closing Date, no stop
order suspending the effectiveness of a Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of any Selling Stockholder, the Company
or the Representative, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) 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 one enterprise which, in the
judgment of the Representative, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities of the Company by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act), or any public announcement
that any such organization has under surveillance or review its rating
of any debt securities of the Company (other than an announcement with
positive implications of a possible upgrading, and no implication of a
possible downgrading,
13
of such rating); (iii) any 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
Underwriters including the Representative, 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; (iv) 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; (v) any banking
moratorium declared by U.S. Federal or New York authorities; (vi) any
major disruption of settlements of securities or clearance services in
the United States; or (vii) (A) there shall have occurred any outbreak
or escalation of hostilities or acts of terrorism involving the United
States or there is a declaration of a national emergency or war by the
United States or (B) there shall have been any other calamity or crisis
or any change in political, financial or economic conditions if the
effect of any such event specified in (A) or (B), in the judgment of
the Representative, makes it impracticable or inadvisable to proceed
with the offering, sale and delivery of the Firm Securities or the
Optional Securities, as the case may be, on the terms and in the manner
contemplated by the Prospectus.
(d) The Representative shall have received an opinion, dated
such Closing Date, of Xxxxxxx Law Firm, P.C., L.L.O., counsel for the
Company, covering the matters set forth in Annex II, the form of which
opinion shall be reasonably satisfactory to counsel to the
Underwriters.
(e) The Representative shall have received an opinion, dated
such Closing Date, of Xxxxxxx Law Firm, P.C., L.L.O., counsel for the
Selling Stockholders, covering the matters set forth in Annex III, the
form of which opinion shall be reasonably satisfactory to counsel to
the Underwriters.
(f) The Representative shall have received from Akin Gump
Xxxxxxx Xxxxx & Xxxx LLP, counsel for the Underwriters, such opinion or
opinions, dated such Closing Date, with respect to the incorporation of
the Company, the validity of the Offered Securities delivered on such
Closing Date, the Registration Statements, the Prospectus and other
related matters as the Representative may require, and the Selling
Stockholders 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. In rendering such opinion, Akin Gump Xxxxxxx Xxxxx & Xxxx
LLP may rely as to the incorporation of the Company and all other
matters governed by Nevada law upon the opinion of Xxxxxxx Law Firm,
P.C., L.L.O. referred to above.
(g) The Representative shall have received a certificate,
dated such Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to their knowledge after reasonable investigation, shall
state that: the representations and warranties of the Company in this
Agreement are true and correct; the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date; no stop order
suspending the effectiveness of any Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission; the Additional Registration Statement
(if any) satisfying the requirements of subparagraphs (1) and (3) of
Rule 462(b) was filed pursuant to Rule 462(b), including payment of the
applicable filing fee in accordance with Rule 111(a) or (b) under the
Act, prior to the time the Prospectus was printed and distributed to
any Underwriter; and, subsequent to the respective dates of the most
recent financial statements in the Prospectus, (i) there has been no
material change in long term debt or capital stock of the Company
(except that the certificate delivered subsequent to the First Closing
Date may make reference to the issuance of the Firm Shares and
issuances under the Company's stock option plans) and (ii) 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 the
Prospectus or as described in such certificate.
(h) The Representative shall have received a letter, dated
such Closing Date, of KPMG 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
such Closing Date for the purposes of this subsection.
14
(i) On or prior to the date of this Agreement, the
Representative shall have received lockup letters from each stockholder
of the Company listed on Schedule C hereto.
(j) Each Selling Stockholder will deliver to Bear Xxxxxxx a
properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by the United
States Treasury Department regulations in lieu thereof).
The Selling Stockholders and the Company will furnish the Representative with
such conformed copies of such opinions, certificates, letters and documents as
the Representative reasonably request. Bear Xxxxxxx may in its sole discretion
waive on behalf of the Underwriters compliance with any conditions to the
obligations of the Underwriters hereunder, whether in respect of an Optional
Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter and each person, if any who controls such
Underwriter within the meaning of Section 15 of the Act, against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
specifically for use therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in subsection (c) below; and provided, further, that with respect to any
untrue statement or alleged untrue statement in or omission or alleged omission
from any preliminary prospectus, the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased the
Offered Securities concerned, to the extent that a prospectus relating to such
Offered Securities was required to be delivered by such Underwriter under the
Act in connection with such purchase and any such loss, claim, damage or
liability of such Underwriter 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 Prospectus if the Company
had previously furnished copies thereof to such Underwriter.
The Company agrees to indemnify and hold harmless the Designated
Underwriter and each person, if any, who controls the Designated Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act (the "DESIGNATED ENTITIES"), from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in any material prepared
by or with the consent of the Company for distribution to Participants in
connection with the Directed Share Program or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) caused by the
failure of any Participant to pay for and accept delivery of Directed Shares
that the Participant agreed to purchase; or (iii) related to, arising out of, or
in connection with the Directed Share Program, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross negligence of
the Designated Entities.
(b) Each Selling Stockholder will severally, and not jointly, indemnify
and hold harmless each Underwriter and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any and all losses, claims, damages or liabilities, joint
or several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to
15
be stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Selling Stockholder specifically for use therein, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred it being understood
and agreed that the only such information furnished by each Selling Stockholder
consists of the information included under the captions "Management" and
"Principal and Selling Stockholders" which relates to such Selling Stockholder;
provided, however, that with respect to any untrue statement or alleged untrue
statement in or omission or alleged omission from any preliminary prospectus,
the indemnity agreement contained in this subsection (b) shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased the Offered Securities concerned, to
the extent that a prospectus relating to such Offered Securities was required to
be delivered by such Underwriter under the Act in connection with such purchase
and any such loss, claim, damage or liability of such Underwriter 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 Prospectus (exclusive of material incorporated by reference therein)
if the Company had previously furnished copies thereof to such Underwriter. In
no event, however, shall the aggregate liability of a Selling Stockholder under
this Section 7(b) and for breaches of its representations, warranties, covenants
or agreements contained herein or otherwise exceed the amount of the net
proceeds received by such Selling Stockholder from the sale of Offered
Securities hereunder.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors, its officers who have signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Act, and each Selling Stockholder against any
losses, claims, damages or liabilities to which they or any of them may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Company and each Selling
Stockholder in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred it being understood
and agreed that the only such information furnished by any Underwriter consists
of the following information in the Prospectus furnished on behalf of each
Underwriter: (A) the information appearing in the fourth paragraph under the
caption "Underwriting" relating to the concession to dealers and the
re-allowance to certain other dealers and the delivery of the Offered
Securities; (B) the information contained in the sixth paragraph under the
caption "Underwriting" relating to discretionary sales and (C) the information
contained in the seventeenth and eighteenth paragraphs under the caption
"Underwriting" relating to stabilizing transactions, over-allotment, syndicate
covering transactions, and penalty bids.
(d) 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 an indemnifying party under
subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the failure to notify the indemnifying party shall not
relieve it from any liability that it may have under subsection (a), (b) or (c)
above except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and provided
further that the failure to notify the indemnifying party shall not relieve it
from any liability that it may have to an indemnified party otherwise than under
subsection (a), (b) or (c) above. In case any such action is brought against any
indemnified party and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and,
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 so long as the indemnifying party continues to diligently
defend such action with counsel satisfactory to the indemnified party.
Notwithstanding anything
16
contained herein to the contrary, if indemnity may be sought pursuant to the
last paragraph in Section 7(a) hereof in respect of or proceeding, then in
addition to such separate firm for the indemnified parties, the indemnifying
party shall be liable for the reasonable fees and expenses of not more than one
separate firm (in addition to any local counsel) for the Designated Underwriter
for the defense of any losses, claims, damages and liabilities arising out of
the Directed Shared Program, and all persons, if any, who control the Designated
Underwriter within the meaning of either Section 15 of the Act of Section 20 of
the Exchange Act. 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 (i) settlement includes an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such action 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 an indemnified party.
(e) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) 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), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, the Selling Stockholders, and the Underwriters, respectively, 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, the Selling Stockholders, and
the Underwriters, respectively, 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, the Selling Stockholders, and the Underwriters, respectively, shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and each Selling
Stockholder, respectively, bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, the Selling
Stockholders or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (e) 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 (e).
Notwithstanding the provisions of this subsection (e), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Offered Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Selling
Stockholder shall be required to contribute more than the net proceeds received
by such Selling Stockholder from the sale of Offered Securities hereunder. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under
this Section shall be in addition to any liability which the Company and the
Selling Stockholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has signed a
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities hereunder on either the
First or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, Bear
Xxxxxxx may make arrangements satisfactory to the Company and the Selling
Stockholders for the purchase of such Offered Securities by other persons,
including any of the Underwriters, but if no such arrangements are made by such
Closing Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments
17
hereunder, to purchase the Offered Securities that such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of shares of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the total
number of shares of Offered Securities that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to Bear Xxxxxxx, the
Company and the Selling Stockholders 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 Underwriter,
the Company or the Selling Stockholders, except as provided in Section 10
(provided that if such default occurs with respect to Optional Securities after
the First Closing Date, this Agreement will not terminate as to the Firm
Securities or any Optional Securities purchased prior to such termination). As
used in this Agreement, the term "UNDERWRITER" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Selling Stockholders, of the Company or its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, 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
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by them pursuant to Section 5 and the
respective obligations of the Company, the Selling Stockholders, and the
Underwriters pursuant to Section 7 shall remain in effect, and if any Offered
Securities have been purchased hereunder the representations and warranties in
Section 2 and all obligations under Section 5 shall also remain in effect. If
the purchase of the Offered Securities by the Underwriters is not consummated
for any reason other than solely because of the termination of this Agreement
pursuant to Section 8 or the occurrence of any event specified in clause (iii),
(iv), (v), (vi) or (vii) of Section 6(c), the Company will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) reasonably incurred by them in connection with the offering of the
Offered Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representative, c/o Bear, Xxxxxxx & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Parish, Senior Managing Director,
Equity Capital Markets, with a copy, which shall not constitute notice, to Xxxx
X. Xxxxx, P.C., Akin Gump Xxxxxxx Xxxxx & Xxxx LLP, 0000 Xxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000, or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at 0000 Xxxx Xxxx Xxxxx, Xxxx, Xxxxx 00000,
Attention: ______________, or, if sent to the Selling Stockholders or any of
them, will be mailed, delivered or telegraphed and confirmed to Xxxxx Xxxxx at
0000 Xxxxx 00xx Xxxxxx, Xxxxxxx, XX 00000, with a copy, which shall not
constitute notice, to Xxxx X. Xxxxxxx, Xxxxxxx Law Firm, P.C., L.L.O., 000 X.
00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000; provided, however, that any
notice to an Underwriter pursuant to Section 7 will be mailed, delivered or
telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective personal representatives
and successors and the officers and directors and controlling persons referred
to in Section 7, and no other person will have any right or obligation
hereunder.
12. Representation. The Representative will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representative will be binding
upon all the Underwriters. Xxxxx Xxxxx will act for the Selling Stockholders in
connection with such transactions, and any action under or in respect of this
Agreement taken by Xxxxx Xxxxx will be binding upon all the Selling
Stockholders.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to
principles of conflicts of laws.
18
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.
19
If the foregoing is in accordance with the Representative'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement among the
Selling Stockholders, the Company and the several Underwriters in accordance
with its terms.
Very truly yours,
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[INSERT NAME OR NAMES OF SELLING STOCKHOLDERS]
----------------------------------------------
CENTRAL FREIGHT LINES, INC.
By
--------------------------------------
[INSERT TITLE]
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
BEAR, XXXXXXX & CO. INC.
Acting on behalf of themselves and as the
Representative of the several Underwriters.
By BEAR, XXXXXXX & CO. INC.
By
-----------------------------------
[INSERT TITLE]
