Exhibit 1.1
7,000,000
QUALITY DISTRIBUTION, INC.
Common Stock
UNDERWRITING AGREEMENT
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November , 2003
Credit Suisse First Boston LLC
Bear, Xxxxxxx & Co. Inc.
Deutsche Bank Securities Inc.
X.X. Xxxxxx Securities, Inc.
Xxxx xxxxx Xxxx xxxxxx, Incorporated
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Quality Distribution, Inc., a Florida corporation
("Company"), proposes to issue and sell 7,000,000 shares ("Firm Securities") of
its common stock ("Securities") and also proposes to issue and sell to the
Underwriters, at the option of the Underwriters, an aggregate of not more than
875,000 additional shares ("Optional Securities") of its Securities as set forth
below. The Firm Securities and the Optional Securities are herein collectively
called the "Offered Securities". As part of the offering contemplated by this
Agreement, Credit Suisse First Boston LLC ("CSFB"), (the "Designated
Underwriter") has agreed to reserve out of the Firm Securities purchased by the
Underwriters under this Agreement, up to 393,750 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 hereby agrees with the several Underwriters
named in Schedule A hereto ("Underwriters") as follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333-108344) relating to the Offered
Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("Commission") and either (i) has been
declared effective under the Securities Act of 1933 ("Act") and is not
proposed to be amended or (ii) is proposed to be amended by amendment or
post-effective amendment. If such registration statement ("initial
registration statement") has been declared effective, either (i) an
additional registration statement ("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 (ii) such an additional registration statement is
proposed to be filed with the Commission pursuant to Rule 462(b) and will
become effective upon filing pursuant to such Rule and upon such filing the
Offered Securities will all have been duly registered under the Act
pursuant to the initial registration statement and such additional
registration statement. If the Company does not propose to amend the
initial registration statement or if an additional registration statement
has been filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has been
filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the Act
or, in the case of the additional registration statement, Rule 462(b). For
purposes of this Agreement, "Effective Time" with respect to the initial
registration statement or, if filed prior to the execution and delivery of
this Agreement, the additional registration statement means (i) if the
Company has advised the Representatives that it does not propose to amend
such registration statement, the date and time as of which such
registration statement, or the most recent post-effective amendment thereto
(if any) filed prior to the execution and delivery of this Agreement, was
declared effective by the Commission or has become effective upon filing
pursuant to Rule 462(c), or (ii) if the Company has advised the
Representatives that it proposes to file an amendment or post-effective
amendment to such registration statement, the date and time as of which
such registration statement, as amended by such amendment or post-effective
amendment, as the case may be, is declared effective by the Commission. If
an additional registration statement has not been filed prior to the
execution and delivery of this Agreement but the Company has advised the
Representatives that it proposes to file one, "Effective Time" with respect
to such additional registration statement means the date and time as of
which such registration statement is filed and becomes effective pursuant
to Rule 462(b). "Effective Date" with respect to the initial registration
statement or the additional registration statement (if any) means the date
of the Effective Time thereof. The initial registration statement, as
amended at its Effective Time, including all information contained in the
additional registration statement (if any) and deemed to be a part of the
initial registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the Form on
which it is filed and including all information (if any) deemed to be a
part of the initial registration statement as of its Effective Time
pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is hereinafter
referred to as the "Initial Registration Statement". The additional
registration statement, as amended at its Effective Time, including the
contents of the initial registration statement incorporated by reference
therein and including all information (if any) deemed to be a part of the
additional registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration
Statement". The Initial Registration Statement and the Additional
Registration Statement are herein 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.
(b) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (i) on the Effective
Date of the Initial Registration Statement, the Initial Registration
Statement conformed in all respects to the requirements of the Act and the
rules and regulations of the Commission ("Rules and Regulations") and did
not include
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any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, (ii) on the Effective Date of the Additional Registration
Statement (if any), each Registration Statement conformed, or will conform,
in all respects to the requirements of the Act and the Rules and
Regulations and did not include, or will not include, any untrue statement
of a material fact and did not omit, or will not omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) on the date of this Agreement,
the Initial Registration Statement and, if the Effective Time of the
Additional Registration Statement is prior to the execution and delivery of
this Agreement, the Additional Registration Statement each conforms, and at
the time of filing of 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 respects to the 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 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 through the Representatives
specifically for use therein, it being understood and agreed that the only
such information is that described as such in Section 7(b) hereof.
(c) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Florida, has
all requisite corporate and other power and authority to own or lease its
properties and to conduct its business as described in the Prospectus; and
the Company is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction where the ownership or leasing of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified or be in good standing would not have
a material adverse effect on the business, condition (financial or other)
or results of operations of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Effect").
(d) Each subsidiary of the Company has been duly incorporated or
organized, as the case may be, and is validly existing as a corporation or
limited liability company in good standing under the laws of the
jurisdiction of its incorporation or organization, with all requisite
corporate or other power and authority to own or lease 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 and
is in good standing in all jurisdictions where the ownership or leasing of
its property or the conduct of its business requires such qualification,
except where the failure to be so qualified or be in good standing would
not 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
liens granted to the lenders under the company's existing credit facility
as described in the Prospectus.
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(e) The Offered Securities and all other outstanding shares of
capital stock of the Company outstanding prior to the issuance of the
Offered Securities have been duly authorized; all outstanding shares of
capital stock of the Company are, and, when the Offered Securities have
been issued and delivered and paid for in accordance with this Agreement on
each Closing Date (as defined below), such Offered Securities will have
been, validly issued, fully paid and nonassessable and will conform to the
description thereof contained in the Prospectus; and the issuance of such
Offered Securities will not be subject to any preemptive or similar rights.
(f) 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.
(g) Except as set forth in the Prospectus, 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
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 pursuant to any other registration statement
filed by the Company under the Act.
(h) The Offered Securities have been approved for listing on the
Nasdaq Stock Market's National Market, subject to notice of issuance.
(i) This Agreement has been duly authorized, executed and delivered
by the Company.
(j) 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 required to register as an
"investment company" as defined in the Investment Company Act of 1940, as
amended.
(k) Neither the Company nor any of its subsidiaries is (i) in
violation of its certificate of incorporation or bylaws (or similar
organizational documents), (ii) in violation of any statute, judgment,
decree, order, rule or regulation applicable to the Company, its
subsidiaries or any of their respective properties or assets, which
violation would have a Material Adverse Effect, or (iii) in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit, certificate,
contract or other agreement or instrument to which the Company or any of
its subsidiaries is a party or to which the Company or any of its
subsidiaries is subject (each, a "Contract" and collectively, the
"Contracts"), which default would have a Material Adverse Effect.
(l) No consent, approval, authorization or order of any court or
governmental agency or body is required for the transactions contemplated
hereby, the execution, delivery and performance of this Agreement or the
consummation of the other transactions contemplated in this Agreement
(other than the transactions contemplated by Section 6(i)), except (i) such
as have been obtained on or prior the Closing Date, (ii) for such consents,
approvals, authorizations, or orders as would not have a Material Adverse
Effect, (iii) such as may be required, (iv) by the NASD or (v) such as may
be required under the Securities Act, the Exchange Act, state securities or
"Blue Sky" laws in connection with the issuance and sale of the Offered
Securities or (vi) un-
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der the federal or provincial laws of Canada or under the laws of any other
foreign jurisdiction in which the Offered Securities may be offered or
sold.
(m) The execution, delivery and performance of this Agreement will
not contravene any provision of (i) any indenture, mortgage, deed of trust,
loan agreement, note, lease, license, franchise agreement, permit,
certificate, contract or other agreement or instrument to which the Company
or any subsidiary of the Company is bound that is material to the Company
and its subsidiaries taken as a whole, which conflict, breach, violation or
default would have a Material Adverse Effect, (ii) the amended and restated
certificate of incorporation or bylaws of the Company or (iii) any statute,
judgment, decree, order, rule or regulation of any court or governmental
agency or other body applicable to the Company, such subsidiary or any of
their respective properties, which conflict, breach, violation or default,
individually or in the aggregate, would have a Material Adverse Effect.
(n) The audited consolidated financial statements and related notes
of the Company and its consolidated subsidiaries included in the Prospectus
present fairly, in all material respects, the consolidated financial
position, results of operations and cash flows of the Company and its
consolidated subsidiaries at the dates and for the periods to which they
relate and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis; and
PricewaterhouseCoopers LLP, which has audited the consolidated financial
statements as set forth in its reports in the Prospectus, is an independent
public accountant with respect to the Company under Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public
Accountants, and its rulings and interpretations.
(o) The statements in the Prospectus under the headings "Description
of the New Credit Facility and Other Indebtedness", "Description of Capital
Stock", "Conversion of Preferred Stock" and "United States Federal Income
Tax Considerations" fairly summarize the matters described therein in all
material respects.
(p) There are no legal or governmental proceedings pending or, to the
best knowledge of the Company, threatened, to which the Company or any of
its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be
described in any Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that
are required to be described in any Registration Statement or the
Prospectus or to be filed as exhibits to such Registration Statement that
are not described or filed as required.
(q) The Company and its subsidiaries own or possess all licenses or
other rights to use all material patents, trademarks, service marks, trade
names, copyrights and know-how necessary to conduct the businesses now or
proposed to be operated by them as described in the Prospectus, and neither
the Company nor any subsidiary has received any notice of infringement of
or conflict with (or knows of any such infringement of or conflict with)
asserted rights of others with respect to any patents, trademarks, service
marks, trade names, copyrights or know-how which, if such assertion of
infringement or conflict were sustained, would have a Material Adverse
Effect.
(r) The Company and each of its subsidiaries has obtained, or has
applied for, all licenses, permits, franchises and other governmental
authorizations, consents and approvals necessary to conduct the businesses
and own or lease their respective properties now or proposed to be operated
by them as described in the Prospectus, except for those the lack of which
would not have a Material Adverse Effect.
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(s) Subsequent to the respective dates as of which information is
given in the Prospectus and except as described therein or contemplated
thereby, neither the Company nor any of subsidiary of the Company have
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, not in the ordinary course of
business.
(t) Except as described in the Prospectus, (i) the Company and each
of subsidiary of the Company is in compliance with and not subject to
liability under applicable Environmental Laws (as defined below), (ii) the
Company and each subsidiary of the Company has made all filings and
provided all notices required under any applicable Environmental Law, and
is in compliance with all permits required under any applicable
Environmental Laws, (iii) there is no (x) criminal or (y) civil or
administrative action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter or request for
information pending or, to the knowledge of the Company, threatened against
the Company or any of its subsidiaries under any Environmental Law, (iv) no
lien, charge, encumbrance or restriction has been recorded under any
Environmental Law with respect to any assets, facility or property owned,
operated, leased or controlled by the Company or any of its subsidiaries,
(v) neither the Company nor any subsidiary of the Company has received
notice that it has been identified as a potentially responsible party under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), or any comparable state law, and (vi) no
property or facility of the Company or any of its subsidiaries is (x)
listed or, to the knowledge of the Company, proposed for listing on the
National Priorities List under CERCLA or is (y) listed in the Comprehensive
Environmental Response, Compensation and Liability Information System List
promulgated pursuant to CERCLA or, to the knowledge of the Company, on any
comparable list maintained by any state or local governmental authority;
except, in the case of clauses (i), (ii), (iii)(y), (iv), (v) and (vi), for
such notices, listings, liability under or noncompliance with applicable
Environmental Laws, failures to make filings and provide notices under
applicable Environmental Laws and recording of liens, charges, encumbrances
or restrictions under any Environmental Laws that, individually or in the
aggregate, has not had a Material Adverse Effect and would not reasonably
be expected to have a Material Adverse Effect; and for purposes of this
Agreement, "Environmental Laws" means the common law and all applicable
federal, state and local laws or regulations, codes, orders, decrees,
judgments or injunctions issued, promulgated, approved or entered
thereunder, relating to pollution or protection of public health and safety
or the environment, including, without limitation, laws relating to (i)
emissions, discharges, releases or threatened releases of hazardous
materials into the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials, and (iii)
underground and above-ground storage tanks and related piping, and
emissions, discharges, releases or threatened releases therefrom.
(u) Except as described in the Prospectus, neither the Company nor
any subsidiary of the Company is in default under any Contract, has
received a notice or claim of any such default or has knowledge of any
breach of any Contract by the other party or parties thereto, except such
defaults or breaches as would not have a Material Adverse Effect.
(v) The Company and each subsidiary of the Company has filed all
necessary federal, state and foreign income and franchise tax returns,
except where the failure to so file such returns would not have a Material
Adverse Effect, and have paid all taxes shown as due thereon; and, other
than tax deficiencies which the Company or any of subsidiary of the Company
is contesting in good faith and for which adequate reserves have been
provided, there is no tax deficiency that has been asserted against the
Company or any of its subsidiaries that would have a Material Adverse
Effect.
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(w) The Company and each subsidiary of the Company has good and
marketable title to all real property and good title to all personal
property described in the Prospectus as being owned by them, in each case,
including, without limitation, a validly existing leasehold estate in the
real and personal property described in the Prospectus as being leased by
it (except for those leases of real property in which the Company and its
subsidiaries have good title and that would be marketable but for the
requirement that the landlord consent to an assignment or sublease of the
lease), free and clear of all liens, except, in each case, as described in
the Prospectus or to the extent the failure to have such title or the
existence of such liens would not have a Material Adverse Effect.
(x) There is no strike or material labor dispute, slowdown or work
stoppage with the employees of the Company or any of its subsidiaries which
is pending or, to the knowledge of the Company, threatened.
(y) The statistical and market-related data included in the
Prospectus are based on or derived from sources that the Company believes
to be reliable and accurate in all material respects or represents the
Company's good faith estimates based on information it believes to be
reliable.
(z) The Company and its subsidiaries carry insurance (including
self-insurance and, to the knowledge of the Company, including flood
insurance to the extent any mortgaged property is located in a special
flood hazard area as determined by the Federal Emergency Management Agency)
in such amounts and covering such risks which the Company believes would be
obtained by companies in the same or similar businesses in the ordinary
course for the conduct of its business and the value of its properties.
(aa) Except as described in the Prospectus, neither the Company nor
any subsidiary of the Company has any liability for any prohibited
transaction or accumulated funding deficiency (within the meaning of
Section 412 of the U.S. Internal Revenue Code) or any complete or partial
withdrawal liability with respect to any pension, profit sharing or other
plan which is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), to which the Company or any subsidiary of the
Company makes or ever has made a contribution and in which any employee of
the Company or such subsidiary is or has ever been a participant, other
than liabilities that collectively would not have a Material Adverse
Effect; and with respect to such plans, the Company and its subsidiaries
are in compliance in all material respects with all applicable provisions
of ERISA, except to the extent such non-compliance would not have a
Material Adverse Effect.
(bb) 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 or any subsidiary of the Company on
any class of capital stock.
(cc) Furthermore, the Company represents and warrants to the
Underwriters that (i) 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
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(ii) 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.
(dd) The Company has not offered, or caused the Underwriters to offer,
any offered Securities to any person pursuant to the Directed Share Program
with the specific intent to unlawfully influence (i) a customer or supplier
of the Company to alter the customer's or supplier's level or type of
business with the Company or (ii) a trade journalist or publication to
write or publish favorable information about the Company or its products.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of $[ ] per share, the respective
numbers of shares of Firm Securities set forth opposite the names of the
Underwriters in Schedule A hereto.
The Company will deliver the Firm Securities to the Representatives for the
accounts of the Underwriters, against payment of the purchase price in Federal
(same day) funds by wire transfer to an account at a bank acceptable to CSFB and
Bear, Xxxxxxx & Co. Inc. ("BSCI") and specified in writing by the Company, at
the office of O'Melveny & Xxxxx LLP, at 9:00A.M., New York time, on [ ], 2003
or at such other time not later than seven full business days thereafter as
CSFB, BSCI and the Company determine, such time being herein referred to as the
"First Closing Date". For purposes of Rule 15c6-1 under the Securities Exchange
Act of 1934, the First Closing Date (if later than the otherwise applicable
settlement date) shall be the settlement date for payment of funds and delivery
of securities for all the Offered Securities sold pursuant to the offering. The
certificates for the Firm Securities so to be delivered will be in definitive
form, in such denominations and registered in such names as CSFB and BSCI
request and will be made available for checking and packaging at the above
office of the transfer agent and registrar for the Securities in New York, New
York at least 24 hours prior to the First Closing Date.
In addition, upon written notice from CSFB and BSCI given to the Company
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 Company agrees to sell to the Underwriters the number of shares
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 shares of Firm Securities set forth opposite such
Underwriter's name bears to the total number of shares of Firm Securities
(subject to adjustment by CSFB and BSCI 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 CSFB and BSCI to the Company.
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 CSFB
and BSCI but shall be not later than five full business days after written
notice of election to purchase Optional Securities is given. The Company will
deliver the Optional Securities being purchased on each Optional Closing Date to
the Representatives for the accounts of the several Underwriters, against
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payment of the purchase price therefor in Federal (same day) funds by wire
transfer to an account at a bank acceptable to CSFB and BSCI and specified in
writing by the Company, at the above office of Xxxxxx Xxxxxx & Xxxxxxx LLP. The
certificates for the Optional Securities being purchased on each Optional
Closing Date will be in definitive form, in such denominations and registered in
such names as CSFB and BSCI requests upon reasonable notice prior to such
Optional Closing Date and will be made available for checking and packaging at
the above office of the transfer agent and registrar in New York, New York 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. The Company agrees with the several
Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will
file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CSFB and BSCI,
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 CSFB and BSCI 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 CSFB and BSCI.
(b) The Company will advise CSFB and BSCI 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 without CSFB's and BSCI's consent,
which consent shall not be unreasonably withheld; and the Company will also
advise CSFB and BSCI 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 CSFB and BSCI 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 CSFB's nor BSCI's con-
-9-
sent to, nor the Underwriters' delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in
Section 6.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional Registration
Statement) which will satisfy the provisions of Section 11(a) of the Act.
For the purpose of the preceding sentence, "Availability Date" means the
45th day after the end of the fourth fiscal quarter following the fiscal
quarter that includes such Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (five of which will 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 CSFB and BSCI request. The Prospectus shall be
so furnished on or prior to 3:00 P.M., New York time, on the business day
following the later of the execution and delivery of this Agreement or the
Effective Time of the Initial Registration Statement. All other documents
shall be so furnished as soon as available. The Company will pay the
expenses of printing and distributing to the Underwriters all such
documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFB and BSCI
designate and will continue such qualifications in effect so long as
required for the distribution; provided that in connection therewith the
Company will not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction.
(g) The Company will pay all expenses incident to the performance of
its obligations under this Agreement, for any filing fees and other
expenses (including fees and disbursements of counsel) incurred in
connection with qualification of the Offered Securities for sale under the
laws of such jurisdictions as CSFB and BSCI designate and the printing of
memoranda relating thereto, for the filing fee incident to the review by
the National Association of Securities Dealers, Inc. 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 and
for expenses incurred in distributing preliminary prospectuses and the
Prospectus (including any amendments and supplements thereto) to the
Underwriters. It is understood, however, that except as provided in this
Section 5 and Sections 7 and 10, the Underwriters will pay all of their
respective costs and expenses, including, without limitation, fees and
disbursements of their counsel, transfer taxes payable on the resale of the
Offered Securities by them and any advertising expenses created by the
Underwriters in connection with the issuance and resales of the Offered
Securities.
(h) For a period of 180 days after the date of the initial public
offering of the Offered Securities, the Company will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly,
or file with the Commission a registration statement under the Act relating
to, any additional shares of its Securities or securities convertible into
or exchangeable or exercisable for any shares of its Securities, or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of CSFB and BSCI
provided that
-10-
the foregoing shall not apply to (i) issuances of Securities pursuant to
the exercise of an option or warrant or the conversion of a security
outstanding on the date of the Prospectus and the issuance of Securities in
connection with the conversion of the Company's Preferred Stock as
described in the Registration Statement and Prospectus, (ii) the issuance
of options under the Company's existing stock option plans described in the
Prospectus, and (iii) the issuance of Securities (or options, warrants or
convertible securities in respect thereof) in connection with a bona fide
merger or acquisition transaction, provided that the Securities (or such
options, warrants and convertible securities) so issued are subject to the
terms of a lock-up letter having provisions that are substantially the same
as the lock-up letters described in Section 6(h) of this Agreement; (iv)
the filing by the Company with the Commission of any Registration Statement
or Form S-8 and (v) the sale to the Underwriters of the Firm Securities to
be sold by the Company hereunder.
(i) 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 Company will direct the
transfer agent in writing to place stop transfer restrictions upon such
securities for such period of time. The Designated Underwriter will notify
the Company in writing as to which Participants will need to be so
restricted. The obligations of the Company pursuant to this paragraph are
subject to the receipt of such notice from the Designated Underwriter.
(j) 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 sale of Directed Shares in
foreign jurisdictions in 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 herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated the date
of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if the
Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement, shall be prior to the filing of
the amendment or post-effective amendment to the registration statement to
be filed shortly prior to such Effective Time), of PricewaterhouseCoopers
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;
-11-
(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 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 generally accepted
accounting principles;
(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 date of the
latest available balance sheet read by such accountants, there
was any decrease in consolidated 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 sales 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; and
(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 Statement 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
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post-effective amendment to be filed shortly prior to its Effective Time,
(ii) if the Effective Time of the Initial Registration Statement is prior
to the execution and delivery of this Agreement but the Effective Time of
the Additional Registration is subsequent to such execution and delivery,
"Registration 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 CSFB and BSCI. 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 CSFB and
BSCI. 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 the Company or the Representatives, 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 a majority
in interest of the Underwriters including the Representatives, is material
and adverse and makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Offered Securities; (ii) any downgrading in the rating of any debt
securities or preferred stock of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the 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, 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 Representatives, 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; (v) or any
suspension of trading of any securities of the Company on any exchange or
in the over-the-counter market; (vi) any banking moratorium declared by
U.S. Federal or New York authorities; (vii) any major disruption of
settlements of securities or clearance services in the United States or
(viii) any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States, any declaration of war by Congress
or any other national or international calamity or emergency if, in the
judgment of a majority in interest of the Underwriters including the
Representatives, the effect of any such attack, outbreak, escalation, act,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment
for the Offered Securities.
-13-
(d) The Representatives shall have received an opinion, dated such
Closing Date, of
(1) O'Melveny & Xxxxx LLP, counsel for the Company, to the
effect that:
(i) Each subsidiary of the Company that is organized
under the laws of Delaware (a "Delaware Subsidiary") is validly
existing and in good standing under the laws of the State of
Delaware, with corporate or other power under the Delaware
General Corporation Law or other Delaware law to own its
properties and to conduct its business as described in the
Prospectus and is duly qualified to do business as a foreign
entity 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 so to
qualify or to be in good standing would not have a Material
Adverse Effect;
(ii) QD LLC is a limited liability company validly
existing and in good standing under the laws of the State of
Delaware with the limited liability power under the Delaware
Limited Liability Company Act and its certificate of formation
and limited liability company agreement to own its properties and
to conduct its business as described in the Prospectus and is
duly qualified to do business as a foreign limited liability
company 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 so to
qualify or to be in good standing would not have a Material
Adverse Effect;
(iii) There are no contracts, agreements or understandings
known to such counsel between the Company and any person granting
such person the right to require the Company 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 the Registration Statement or
in any securities being registered pursuant to any other
registration statement filed by the Company under the Act;
(iv) No consent, approval, authorization, order or permit
of, or filing with, any New York or federal governmental
authority is required under Applicable Laws on the part of the
Company for the execution and delivery of, and the performance of
its obligations under, this Agreement, except for (a) such as
have been obtained or made under the Act and the Exchange Act,
and (b) such consents, approvals, authorizations, orders or
qualifications as may be required (i) by the rules and
regulations of the NASD, (ii) under state securities or Blue Sky
laws in connection with the purchase and distribution of the
Offered Securities by the Underwriters or (iii) under the federal
or provincial laws of Canada or under the laws of any other
foreign jurisdiction in which the Offered Securities may be
offered or sold. For purposes of such opinion, "Applicable Laws"
means those current New York and federal statutes, rules or
regulations of any New York or federal government authority that
such counsel has, in the exercise of customary professional
diligence, recognized as applicable to the Company or to
transactions of the type contemplated by this Agreement;
(v) The execution and delivery by the Company of this
Agreement and the issuance and sale of the Offered Securities do
not, and the Company's performance of its obligations under this
Agreement will not, (a) violate any Ap-
-14-
plicable Laws except that such counsel need not express any
opinion regarding (i) the NASD rules and regulations and (ii)
Blue Sky or state securities laws or (iv) Sections 7 and 9 of
this Agreement, (b) violate, breach, or result in a default
under, any existing obligation of or restriction on the Company
under any of the agreements (the "Other Agreements") filed with
the Commission as exhibits to the Registration Statement pursuant
to paragraph (4) or paragraph (10) of Item 601 of Regulation S-K,
or (c) breach or otherwise violate any existing obligation of or
restriction on the Company under any order, judgment or decree of
any New York or federal court or governmental authority binding
on the Company identified in a certificate from the Company
attached to such opinion. Such counsel need not express any
opinion as to the effect of the Company's performance of its
obligations in this Agreement on the Company's compliance with
financial covenants in the Other Agreements;
(vi) The statements (A) in the Prospectus under the
captions "Management--Board Committees," "--Compensation
Committee Interlocks and Insider Participation," "--Employment
and Related Agreements," "--2003 Stock Option Plan," "--2003
Restricted Stock Plan," "Certain Relationships and Related
Transactions--The 2002 Transactions," "--Shareholders'
Agreement," "-- Registration Rights Agreement," "--Limited
Recourse Secured Promissory Note and Pledge Agreements," "--
Other Transactions," "Description of The New Credit Facility and
Other Indebtedness," "Shares Eligible for Future Sale," "Material
Federal Income Tax Consequences to Non-U.S. Holders of Common
Stock" and "Underwriting" and (B) in the Registration Statement
in Item 15, in each case insofar as such statements constitute
summaries of the legal matters or documents referred to therein,
fairly present in all material respects the information required
by Form S-1;
(vii) The Registration Statement, on the day it was filed,
and each amendment or supplement thereto, as of their respective
filing dates, complied in all material respects with the
requirements as to form for registration statements on Form S-1
under the Act and the related rules and regulations in effect at
the date of filing, except that such counsel expresses no opinion
concerning the financial statements and other financial
information contained therein.
(viii)Such counsel has been advised orally by the
Commission that the Registration Statement has been declared
effective under the Act at the Effective Time on the Effective
Date specified in such opinion and, to such counsel's knowledge,
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are pending or threatened by the
Commission.
(ix) The Prospectus was filed with the Commission pursuant
to Rule 424(b)(4) under the Act on the date specified in such
opinion.
(x) Such counsel has participated in conferences in
connection with the preparation of, and have reviewed, the
Registration Statement and the Prospectus, but have not
independently verified the accuracy, completeness or fairness of
the statements in those documents. The limitations inherent in
such participation and review, and the knowledge available to
such counsel, are such that such counsel is unable to assume, and
such counsel does not assume, any respon-
-15-
sibility for such accuracy, completeness or fairness (except as
otherwise specifically stated in paragraph (vi) above). However,
on the basis of such participation and review, such counsel shall
state that no facts have come to such counsel's attention that
cause such counsel to believe that the Registration Statement as
of its effective date, or as of such Closing Date, contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading, and or that the Prospectus
as of its date and as of the date hereof, contained or contains
any untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. However, such counsel need not express any
opinion or belief as to the financial statements and other
financial information contained in the Registration Statement or
the Prospectus.
(2) Xxxxx & Xxxxxxx, special Florida counsel for the Company to
the effect that:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Florida, has the corporate power and corporate authority under
Florida law to own its property and to 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 so to qualify or to be in good standing would
not have a Material Adverse Effect;
(ii) The information regarding the authorized capital
stock of the Company described under the caption "Description of
Capital Stock," and "Conversion of Preferred Stock," in the
Prospectus, to the extent that it constitutes matters of law or
summaries of legal matters, has been reviewed by such counsel and
is a fair and accurate summary thereof in all material respects
and the capital stock of the Company conforms as to legal matters
in all material respects to such description;
(iii) The shares of capital stock of the Company issued and
outstanding prior to the issuance of the Offered Securities have
been duly authorized and are validly issued, fully paid and
non-assessable;
(iv) The Offered Securities to be sold by the Company have
been duly authorized and, when issued and delivered against
payment therefor in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable, and the
issuance of such Offered Securities is not subject to any
preemptive or other similar rights arising under the Amended and
Restated Articles of Incorporation or Bylaws of the Company or
Florida Business Corporation Act;
(v) This Agreement has been duly authorized by all
necessary corporate action on the part of the Company and has
been executed and delivered by the Company;
-16-
(vi) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement will not violate any provisions of (a) the Amended and
Restated Articles of Incorporation or Bylaws of the Company or
(b) applicable Florida corporate law; and no consent, approval,
authorization or order of, or qualification with, any Florida
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, except for
as may be required by the securities or Blue Sky laws of Florida
in connection with the offer and sale of the Offered Securities;
(vii) Mexico Investments, Inc., a Florida corporation and
subsidiary of the Company, has been duly incorporated and is an
existing corporation in good standing under the laws of Florida,
with corporate power and authority to own its properties and
conduct its business as described in the Prospectus and 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 so to qualify or to be in
good standing would not have a Material Adverse Effect.
(3) Xxxxxx X. Xxxxx, the general counsel for the Company to the
effect that:
(i) The execution, delivery and performance of this
Agreement and the issuance and sale of the Offered Securities
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any
rule, regulation or order of any governmental agency or body or
any court having jurisdiction over the Company or any subsidiary
of the Company or any of their properties, or any agreement or
instrument to which the Company or any such subsidiary is a party
or by which the Company or any such subsidiary is bound or to
which any of the properties of the Company or any such subsidiary
is subject, or the charter or by-laws of the Company or any such
subsidiary, and the Company has full power and authority to
authorize, issue and sell the Offered Securities as contemplated
by this Agreement;
(ii) Such counsel does not know of any legal or
governmental proceedings required to be described in a
Registration Statement or the Prospectus which are not described
as required or of any contracts or documents of a character
required to be described in a Registration Statement or the
Prospectus or to be filed as exhibits to a Registration Statement
which are not described and filed as required;
(iii) 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.
(iv) Quality Carriers, Inc., an Illinois corporation and
subsidiary of the Company, has been duly incorporated and is an
existing corporation in good standing under the laws of Illinois,
with corporate power and authority to own its properties and
conduct its business as described in the Prospectus and is duly
qualified to do business as a foreign corporation in good
standing in all other ju-
-17-
risdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where
the failure so to qualify or to be in good standing would not
have a Material Adverse Effect.
(4) Xxxxxx Xxxxx & Xxxxxxx LLP, special Pennsylvania counsel to
Chemical Xxxxxx Corporation, to the effect that:
Chemical Xxxxxx Corporation, a Pennsylvania corporation and
subsidiary of the Company, has been duly incorporated and is an
existing corporation in good standing under the laws of
Pennsylvania, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus and 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 so to
qualify or to be in good standing would not have a Material
Adverse Effect.
(5) Xxxxx Xxxxxx, special Nevada counsel to MTL of Nevada, to
the effect that:
MTL of Nevada, a Nevada corporation and subsidiary of the
Company, has been duly incorporated and is an existing
corporation in good standing under the laws of Nevada, with
corporate power and authority to own its properties and conduct
its business as described in the Prospectus and 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 so to qualify or to be in good standing
would not have a Material Adverse Effect; and
(e) The Representatives shall have received from Xxxxxx Xxxxxx &
Xxxxxxx 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
Representatives may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters. In rendering such opinion, Xxxxxx Xxxxxx & Xxxxxxx
llp may rely as to the incorporation of the Company and all other matters
governed by Florida law upon the opinion of Xxxxx & Lardner referred to
above.
(f) The Representatives 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
the best of their knowledge after reasonable investigation, shall state
that: the representations and warranties of the Company in this Agreement
are true and correct; 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 date of the most recent financial statements 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
-18-
operations of the Company and its subsidiaries taken as a whole except as
set forth in the Prospectus or as described in such certificate.
(g) The Representatives shall have received a letter, dated such
Closing Date, of PricewaterhouseCoopers 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.
(h) On or prior to the date of this Agreement, the Representatives
shall have received lockup letters from each of the executive officers and
directors, stockholders and optionholders of the Company.
(i) On or prior to the Closing Date, (i) Quality Distribution, LLC, a
direct wholly owned subsidiary of the Company, shall have concurrently
consummated an offering of its unsecured notes in an aggregate principal
amount of not less than $125.0 million, (ii) Quality Distribution, LLC
shall also have entered into a new credit facility which shall consist of a
$140.0 million term loan facility, a $75.0 million revolving facility and a
$20.0 million pre-funded letter of credit facility and (iii) the Company
shall have converted all outstanding shares of its preferred stock for
shares of its common stock.
The Company will furnish the Representatives with such conformed copies of
such opinions, certificates, letters and documents as the Representatives
reasonably request. CSFB and BSCI may in their 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, its partners, members, directors and officers
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, in light of the circumstances in
which they were made, not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives specifically for
use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in
subsection (b) below; and provided further, that with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission from
any preliminary 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 Pro-
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spectus if the Company had previously furnished copies thereof to such
Underwriter and such Prospectus corrected the untrue statement or omission in
such preliminary prospectus.
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 Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any who
controls the Company within the meaning of Section 15 of the Act, against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, 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 through the Representatives specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the following information in the Prospectus furnished on behalf of each
Underwriter: the concession and reallowance figures appearing in the fourth
paragraph under the caption "Underwriting" and the information contained in the
sixth, seventh (other than the first sentence of such paragraph), thirteenth,
fourteenth, fifteenth and sixteenth paragraphs under the caption "Underwriting".
(c) Promptly after receipt by an indemnified party under this Section or
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above or Section 9, 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) or (b)
above or Section 9 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) or (b) above or Section 9. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section or Section 9, as the case may be, for any
legal or other
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expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i) 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. In the event the indemnifying party does
not assume the defense of any action brought against an indemnified party, the
indemnifying party shall not, in connection with any one such action or
proceeding or separate but substantially similar actions or proceedings arising
out of the same general allegations, be liable for the fees and expenses of more
than one separate firm of attorneys at any time for all indemnified persons,
except to the extent that local counsel, in addition to regular counsel, is
required in order to effectively defend against such action or proceeding,
unless (i) the indemnifying party has agreed to pay such fees and expenses or
(ii) an indemnified party reasonably determines that there may be conflicting
interests between such indemnified party and other indemnified parties in
conducting the defense of such action, including situations in which there are
one or more legal defenses available to such indemnified party that are
different from or in addition to those available to other indemnified parties.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section or Section 9 shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter or the QIU (as hereinafter defined) within the
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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, CSFB and
BSCI may make arrangements satisfactory to the Company 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 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
CSFB, BSCI and the Company for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company, 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. Qualified Independent Underwriter. The Company hereby confirms that at
its request Bear, Xxxxxxx & Co. Inc. has without compensation acted as
"qualified independent underwriter" (in such capacity, the "QIU") within the
meaning of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. in connection with the offering of the Offered
Securities. The Company will indemnify and hold harmless the QIU against any
losses, claims, damages or liabilities, joint or several, to which the QIU 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 the QIU's acting (or alleged failing to act) as such "qualified independent
underwriter" and will reimburse the QIU for any legal or other expenses
reasonably incurred by the QIU in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred.
10. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the 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 it pursuant to Section 5 and the respective
obligations of the Company and the Underwriters pursuant to Section 7 and the
obligations of the Company pursuant to Section 9 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), (vi), (vii) or (viii) of Section
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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.
11. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives, c/o Credit Suisse First Boston LLC, Eleven Madison Avenue,
New York, N.Y. 10010-3629, Attention: Transactions Advisory Group, or, if sent
to the Company, will be mailed, delivered or telegraphed and confirmed to it at
Quality Distribution, Inc., 0000 Xxxxxxxx Xxxx Xxxxx, Xxxxx, XX 00000,
Facsimile: (000) 000-0000, Attention: Xxx Xxxxxxx, Chief Financial Officer, with
a copy to O'Melveny & Xxxxx LLP, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000,
Facsimile: (000) 000-0000, Attention: Xxxx Xxxxxxx; provided, however, that any
notice to an Underwriter pursuant to Section 7 will be mailed, delivered or
telegraphed and confirmed to such Underwriter.
12. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7, and no other person
will have any right or obligation hereunder.
13. Representation of Underwriters. The Representatives will act for the
several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by CSFB and BSCI will be
binding upon all the Underwriters.
14. 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.
15. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
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If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement between the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
QUALITY DISTRIBUTION, INC.
By:
-------------------------------------
Name:
Title:
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
Credit Suisse First Boston LLC
Bear, Xxxxxxx & Co. Inc.
Deutsche Bank Securities Inc.
X.X. Xxxxxx Securities, inc.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Acting on behalf of themselves and as
the Representatives of the several
Underwriters
By Credit Suisse First Boston LLC
By
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[Insert title]
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