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EXHIBIT 1.1
BUDGET GROUP, INC.
Class A Common Stock
(par value $.01 per share)
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Underwriting Agreement
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September , 1997
Xxxxxxx, Xxxxx & Co.
Credit Suisse First Boston Corporation
ABN AMRO Chicago Corporation
BT Alex. Xxxxx Incorporated
XxXxxxxx & Company Securities, Inc.
X.X. Xxxxxx Securities Inc.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Ford FSG, Inc., a Delaware corporation ("Ford"), Budget
Rent-A-Car of Southern California, a California general partnership
("SoCal"), and Atlantic Equity Corporation, a North Carolina corporation
("Atlantic" and together with Ford and SoCal, the "Selling Stockholders")
propose, subject to the terms and conditions stated herein, to sell to the
Underwriters named in Schedule II hereto (the "Underwriters") (i) from
SoCal, an aggregate of 180,000 shares of Class A Common Stock, par value
$.01 per share ("Class A Common Stock"), of Budget Group, Inc., a Delaware
corporation (the "Company"), (ii) from Atlantic, an aggregate of 137,500
shares of Class A Common Stock of the Company, and (iii) from Ford, 4,400
shares of Series A Convertible Preferred Stock of the Company which shall
automatically convert into an aggregate of 4,400,000 shares of Class A
Common Stock upon the consummation of the sale of such Series A Convertible
Preferred Stock as contemplated herein (all such shares from the Selling
Stockholders to be referred to as the "Firm Shares"). The Selling
Stockholders and the Company propose, subject to the terms and conditions
stated herein, at the election of the Underwriters, to sell to the
Underwriters an aggregate of 600,000 additional shares (the "Optional
Shares") of Class A Common Stock. The Firm Shares and the Optional Shares
that the Underwriters elect to purchase pursuant to Section 2 hereof shall
be collectively called the "Shares."
1. (a) The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(i) A registration statement on Form S-1 (File No.
333-34799) (the "Initial Registration Statement") in respect of
the Shares has been filed with the Securities and Exchange
Commission (the "Commission"); the Initial Registration Statement
and any post-effective amendment thereto, each in the form
heretofore delivered to you, and, excluding exhibits thereto, to
you for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the
offering (a "Rule 462(b) Registration Statement"), filed pursuant
to Rule 462(b) under the Securities Act of 1933 (the "Act"),
which became effective upon filing, no other document with
respect to the Initial Registration Statement has heretofore been
filed with the Commission; and
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no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued
and no proceeding for that purpose has been initiated or, to the
Company's knowledge, threatened by the Commission (any
preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of
the rules and regulations of the Commission under the Act, is
hereinafter called a "Preliminary Prospectus"; the various parts
of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto
and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof and deemed
by virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective or
such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, each as amended at the
time such part of the registration statement became effective,
are hereinafter collectively called the "Registration Statement";
and such final prospectus, in the form first filed pursuant to
Rule 424(b) under the Act, is hereinafter called the
"Prospectus";
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and the
Preliminary Prospectus dated September 8, 1997, at the time of
filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder, and, as of its date, did not contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(iii) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all
material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the
Company by an Underwriter through Xxxxxxx, Sachs & Co. expressly
for use therein;
(iv) Neither the Company nor any of its significant
subsidiaries (as defined in Rule 1-02(w) of Regulation S-X of the
Commission) (each of such corporations or other legal entities
being hereinafter referred to as a "Subsidiary" and all such
corporations or other legal entities being, collectively, the
"Subsidiaries" (a list of which is set forth on Schedule III
hereto)) has sustained since the date of the latest audited
financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth in or contemplated by the Prospectus
and other than such losses or interferences which would not,
individually or in the aggregate, have a material adverse effect
on the condition (financial or otherwise), results of operations,
business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business (a "Material Adverse Effect");
and, since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has not
been any material change in the capital stock or long-term debt
of the Company or any of its Subsidiaries or any material adverse
change in or affecting the business affairs, business prospects,
management, (a) consolidated financial position, stockholders'
equity or results of operations of the Company and
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its Subsidiaries considered as one enterprise, in each case,
otherwise than as set forth in or contemplated by the Prospectus;
(v) The Company and each Subsidiary has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
with corporate power and authority to own its properties and
conduct its business as described in the Registration Statement
and the Prospectus, and is duly qualified to do business as a
foreign corporation in good standing (to the extent such concepts
are recognized in such jurisdictions) in all other jurisdictions
in which it owns or leases substantial properties or in which the
conduct of its business requires such qualification, except where
the failure to so qualify would not have a Material Adverse
Effect;
(vi) All of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued and is
fully paid and nonassessable; and the capital stock of each
Subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects;
(vii) The Company's authorized capitalization is as set
forth in the Registration Statement and the Prospectus; all the
outstanding shares of Class A Common Stock and Class B Common
Stock of the Company, par value $.01 per share ("Class B Common
Stock" and together with "Class A Common Stock," "Stock"), have
been duly authorized; all outstanding shares of such capital
stock of the Company are, and (A) in the case of Ford, upon
conversion of the Series A Convertible Preferred Stock and (B) in
the case of Atlantic, upon the partial exercise of the warrant
held by it and the purchase of Class A Common Stock in accordance
therewith, the Shares will be, and, when any Company Optional
Shares (as defined in Section 2) have been delivered and paid for
in accordance with this Agreement at such Time of Delivery (as
defined in Section 4), such Company Optional Shares will have
been, validly issued, fully paid and nonassessable and conform to
the description thereof contained in the Prospectus; and the
Shares have been approved for listing on the New York Stock
Exchange subject to notice of issuance;
(viii) Except for (i) the 1,936,600 shares of Class B Common
Stock, which are convertible into 1,936,600 shares of Class A
Common Stock, (ii) the options to purchase 1,932,150 shares of
Class A Common Stock and Class B Common Stock issued under the
Company's 1994 Incentive Stock Option Plan (the "1994 Option
Plan"), (iii) the options to purchase 130,000 shares of Class A
Common Stock issued under the Company's 1994 Directors' Stock
Option Plan (the "1994 Directors' Plan"), (iv) the $80.0 million
aggregate principal amount of Convertible Subordinated Notes of
the Company (the "Series A Notes"), which are convertible into
3,986,049 shares of Class A Common Stock, (v) the $45.0 million
aggregate principal amount of 6.85% Convertible Subordinated
Notes, Series B, due 2007 (the "Series B Notes"), which are
convertible into 1,609,442 shares of Class A Common Stock, (vi)
100,000 shares of Class A Common Stock issuable upon conversion
of Series A Convertible Preferred Stock, if any, (vii) 50,000
shares of Class A Common Stock reserved for issuance upon
exercise of the warrant held by Atlantic Equity Corporation, and
(viii) any other options granted under the 1994 Option Plan in
accordance therewith, each as described in the Registration
Statement and the Prospectus, and except for the conditional
rights to acquire additional shares of Class A Common Stock
contained in the agreement dated October 20, 1995 among the
Company, Team Rental of Southern California, Inc., BRAC-OPCO,
Inc., and SoCal (the "OPCO Agreement"), there are no, and as of
each Time of Delivery (as defined in Section 4) there will be no,
outstanding securities or obligations (together, "Convertible
Securities") of the Company or any Subsidiary convertible into or
exchangeable for any capital stock of the Company or any
Subsidiary, respectively, rights, warrants or options (together,
"Rights") to subscribe for or purchase from the Company or any
Subsidiary any such capital stock or any such Convertible
Securities or obligations, or obligations of the Company or any
Subsidiary to issue Convertible Securities or Rights;
(ix) Except for (i) the rights of first refusal set forth in
the Share Exchange Agreement dated April 25, 1994, as amended on
June 13, 1994 and July 5, 1994, among the Company, Xxxxx Xxxxxxx,
Xxxxxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx and
Xxxxxxx
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Xxxxx, (ii) the rights of Xxxxx Xxxxxxx and Xxxxxx Xxxxxxx to
receive additional shares of Class A Common Stock, as set forth
in the agreement, dated March 8, 1995, among the Company, Team
Rental of Connecticut, Inc., Rental Car Resources, Inc., Xxxxx
Xxxxxxx and Xxxxxx Xxxxxxx, and (iii) the rights of the parties
to the OPCO Agreement, there are no preemptive or other rights to
subscribe for or purchase any shares of capital stock issued by
the Company or any Subsidiary. Except for (i) the transfer
restrictions set forth in the Registration Rights Agreements (as
defined below), (ii) Section 5(e) of this Agreement, (iii) the
voting restrictions set forth in the Shareholders' Agreement
dated October 20, 1995 among the Company, the holders of Class B
Common Stock and Budget Rent-A-Car of Southern California
("SOCAL"), (iv) the restrictions set forth in the purchase
agreements (the "Senior Notes Agreements") for Budget Rent-A-Car
Corporation's ("BRACC") 9.57% Guaranteed Senior Notes due 2007
(the "Senior Notes"), and (v) the restrictions set forth in the
Credit Agreement dated April 29, 1997, among BRACC, the Company,
as Guarantor, the financial institutions party thereto and Credit
Suisse First Boston (the "Credit Agreement"), there are no
restrictions to which the Company is a party upon the voting or
transfer of, and no restrictions on the declaration or payment of
any dividend or distribution on, any shares of capital stock of
the Company or any Subsidiary;
(x) No broker, finder, consultant or other person or entity
is entitled to any brokerage, finder's or other fee or commission
from the Company or any Subsidiary in connection with the sale of
the Shares;
(xi) Except for certain agreements regarding registration
rights described in the Prospectus and filed as exhibits to the
Registration Statement (collectively, the "Registration Rights
Agreements"), there are no contracts, agreements or
understandings between the Company and any person granting such
person the right to require the Company 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 pursuant to any other registration statement filed by
the Company under the Act; and the Company has given proper
notice to, or received written waivers or demand notices from,
each person (other than the Selling Stockholders) holding such
registration rights pursuant to the Registration Rights
Agreements;
(xii) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by
this Agreement in connection with the sale of the Shares, except
such as have been obtained and made under the Act and the Rules
and Regulations and such as may be required under state
securities laws;
(xiii) The execution, delivery and performance of this
Agreement and the sale of the Shares (including any issuance and
sale of Company Optional Shares) will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under (i) any statute, rule, regulation or order of any
governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of
their properties, (ii) 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 (iii) the
charter or by-laws of the Company or any such Subsidiary, except
in the case of clause (i) or (ii), such breaches, violations or
defaults that, individually or in the aggregate, would not have a
Material Adverse Effect; the Company has full power and authority
to authorize, issue and sell the Company Optional Shares as
contemplated by this Agreement;
(xiv) This Agreement has been duly authorized, executed and
delivered by the Company;
(xv) The Company and the Subsidiaries have (i) such
ownership and possession rights with respect to their respective
assets and properties as are necessary for the continuing
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conduct of their respective businesses, as described in the
Registration Statement and the Prospectus, except where the
failure to possess any such rights would not, individually or in
the aggregate, have a Material Adverse Effect, and (ii) peaceful
and undisturbed possession under all material leases to which the
Company or any such Subsidiary is a party as lessee; and all
material leases to which the Company or any such Subsidiary is a
party are in full force and effect; none of the Company or any
Subsidiary has been notified that a lease is invalid or
unenforceable, and no default by the Company or such Subsidiary
has occurred and is continuing thereunder, except for any
defaults that would not, individually or in the aggregate, have a
Material Adverse Effect;
(xvi) The Company and the Subsidiaries hold such licenses,
certificates and permits from governmental entities and
authorities as are necessary to the conduct of the business of
the Company and the Subsidiaries as described in the Registration
Statement and the Prospectus, the failure of which to obtain
would have a Material Adverse Effect; the Company and the
Subsidiaries have fulfilled and performed all of the material
obligations necessary to maintain such licenses, certificates and
permits, except where the failure to perform such obligations
would not have a Material Adverse Effect; the Company and the
Subsidiaries conduct their business in compliance with all
applicable federal, state and local laws and regulations, except
where the failure to perform such obligations would not have a
Material Adverse Effect; and there is no pending or, to the
knowledge of the Company, threatened action, suit, proceeding or
investigation that could lead to the revocation, termination or
suspension of any such license, certificate or permit;
(xvii) To the knowledge of the Company, none of the Company
or any Subsidiary is engaged in any unfair labor practice that
would have a Material Adverse Effect. There is no unfair labor
practice complaint pending or, to the best knowledge of the
Company, threatened against the Company or any Subsidiary before
the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under collective
bargaining agreements is pending or, to the knowledge of the
Company, threatened except such complaints or proceedings as
would not have a Material Adverse Effect. No strike, labor
dispute, slowdown or stoppage is pending or, to the knowledge of
the Company after due inquiry, threatened against the Company or
any Subsidiary;
(xviii) The Company and the Subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks and trade names
necessary to conduct the business now operated by them and have
not received any notice of infringement of or conflict with
asserted rights of others with respect to such rights that, if
determined adversely to the Company or any such Subsidiary,
would, individually or in the aggregate, have a Material Adverse
Effect;
(xix) To the knowledge of the Company, each of the Company
and the Subsidiaries has obtained all permits, licenses and other
authorizations and has made all registrations and other
submissions that are required under all applicable federal, state
and local laws relating to the protection of health, safety or
the environment including but not limited to the Federal Water
Pollution Control Act (33 U.S.C. ss. 1251 et seq.), Resource
Conservation and Recovery Act (42 U.S.C. ss.6901 et seq.), Safe
Drinking Water Act (21 U.S.C. ss.349, 42 U.S.C. xx.xx. 300f -
300j), Toxic Substances Control Act (15 U.S.C. ss.2601 et seq.),
Clean Air Act (42 U.S.C. ss.7401 et seq.), Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C.
ss.9601 et seq.), any laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes
into the environment (including but not limited to ambient air,
surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes,
and any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated
or approved thereunder (collectively, the "Environmental Laws"),
except to the extent that failure to have any such permit,
license or authorization, or to have made such registration or
submission, individually or in the aggregate, does not have a
Material Adverse Effect;
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(xx) Except as described in the Registration Statement and
the Prospectus, each of the Company and the Subsidiaries has been
and is in compliance with all terms and conditions of any
required permits, licenses and authorization, and has been and is
in compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental Laws,
except to the extent failure to comply would not have a Material
Adverse Effect;
(xxi) To the best knowledge of the Company, (i) there are no
past or present events, conditions, circumstances, activities,
practices, incidents or actions, or plans relating to the
business as presently being conducted by the Company or the
Subsidiaries, that interfere with or prevent compliance or
continued compliance with the Environmental Laws, or that would
be reasonably likely to give rise to any legal liability (whether
statutory or at common law) or otherwise would be reasonably
likely to form the basis of any claim, action, demand, suit,
proceeding, hearing, lien, notice of violation, study,
investigation, remediation or cleanup (collectively, "Claims")
based on or related to any Environmental Law or the generation,
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge,
release into the workplace, the community or the environment of
any pollutant, contaminant, chemical or industrial, toxic or
hazardous substance or waste, except for any liabilities or any
Claims that will not, individually or in the aggregate, have a
Material Adverse Effect, and (ii) except as disclosed in the
Registration Statement and the Prospectus, no underground or
aboveground storage tanks are located on property owned or leased
by the Company or the Subsidiaries;
(xxii) There are no Claims pending or, to the best knowledge
of the Company, threatened against the Company or any Subsidiary
based on or related to any Environmental Law or the generation,
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge,
release into the workplace, the community or the environment of
any pollutant, contaminant, chemical or industrial, toxic, or
hazardous substance or waste, and none of the Company or any
Subsidiary has received any notice of violation or potential
liability based on or related to any Environmental Law or the
generation, manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling, or the
emission, discharge, release into the workplace, the community or
the environment of any pollutant, contaminant, chemical or
industrial, toxic, or hazardous substance or waste, except for
any Claim or notice that will not, individually or in the
aggregate, have a Material Adverse Effect;
(xxiii) Except as disclosed in the Registration Statement
and the Prospectus, there are no pending actions, suits or
proceedings against or affecting the Company, any Subsidiary or
any of their respective properties that, if determined adversely
to the Company or such Subsidiary, would 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
Shares; and no such actions, suits or proceedings are threatened
or, to the Company's knowledge, contemplated. Except as disclosed
in the Registration Statement and the Prospectus, all pending
legal or governmental proceedings to which the Company or any
Subsidiary is a party or of which any of their property or assets
is the subject, including ordinary routine litigation incidental
to the business of the Company, are, considered in the aggregate,
not material;
(xxiv) The financial statements of the Company included in
the Registration Statement and the Prospectus comply in all
material respects with the requirements of the Act and the Rules
and Regulations applicable to a registration statement on Form
S-1 and have been prepared, and fairly present the financial
position, results of operations and cash flows of the Company and
its subsidiaries consolidated at the respective dates and for the
respective periods indicated, in accordance with generally
accepted accounting principles consistently applied throughout
such period. The financial information and financial data set
forth in the Registration Statements and the Prospectus under the
captions "Prospectus Summary--Summary Operating Data for the
Budget System," "Prospectus Summary--Summary Historical
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Financial Data of the Company," "Capitalization" (exclusive of
pro forma data contained therein), "Pro Forma Consolidated
Statements of Operations," "Selected Financial Data of the
Company" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations of the Company" are derived
from the accounting records of the Company and its subsidiaries,
and are a fair presentation of the data purported to be shown;
(xxv) The financial statements of BRACC included in the
Registration Statement and the Prospectus comply in all material
respects with the requirements of the Act and the Rules and
Regulations applicable to a registration statement on Form S-1
and have been prepared, and fairly present the financial
position, results of operations and cash flows of BRACC and its
subsidiaries consolidated at the respective dates and for the
respective periods indicated, in accordance with generally
accepted accounting principles consistently applied throughout
such period. The financial information and financial data set
forth in the Registration Statements and the Prospectus under the
captions "Prospectus Summary--Summary Operating Data for the
Budget System," "Prospectus Summary--Summary Historical Financial
Data of BRACC," "Capitalization" (exclusive of pro forma data
contained therein), "Pro Forma Consolidated Statements of
Operations," "Selected Financial Data of BRACC" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations of BRACC" are derived from the accounting records of
BRACC and its subsidiaries, and are a fair presentation of the
data purported to be shown;
(xxvi) The pro forma financial data of the Company and its
subsidiaries contained in the Registration Statement and the
Prospectus have been prepared in accordance with Article 11 of
Regulation S-X under the Act; the assumptions used in the
preparation thereof (taken as a whole) are reasonable, and the
adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein;
(xxvii) The Company is not, and after giving effect to the
sale of the Shares contemplated hereby will not be, an
"investment company" as defined in the Investment Company Act of
1940;
(xxviii) There is no document or contract of a character
required to be described in the Registration Statement or the
Prospectus, or to be filed as an exhibit to the Registration
Statement, that is not described or filed as required; and
(xxix) Each of the Company and its Subsidiaries has and will
maintain insurance covering its properties, operations, personnel
and businesses, which insurance is in amounts and insures against
such losses and risks, in each case as is in accordance with
customary industry practice to protect the Company and its
Subsidiaries and their businesses.
(b) Each of the Selling Stockholders, severally and not jointly,
represents and warrants to, and agrees with, each of the Underwriters and
the Company that:
(i) All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling
Stockholder of this Agreement and for the sale and delivery of
the Shares hereunder, have been obtained; and such Selling
Stockholder has full right, power and authority to enter into
this Agreement and to sell, assign, transfer and deliver the
Shares hereunder;
(ii) The sale of the Shares by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all
of the provisions of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which
such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of
such Selling Stockholder is subject, nor will such action result
in any violation of the provisions of the certificate of
incorporation or by-laws of such Selling Stockholder or any
statute or any
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order, rule or regulation of any court or governmental agency or
body having jurisdiction over such Selling Stockholder or the
property of such Selling Stockholder; and no consent, approval,
authorization, order, registration or qualification of or with
any such court or governmental agency or body is required for the
sale of the Shares or the consummation by such Selling
Stockholder of the transactions contemplated by this Agreement,
except the registration under the Act and Exchange Act of the
Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state or
foreign securities or Blue Sky laws or by the rules and
regulations of the NASD in connection with the purchase and
distribution of the Shares by the Underwriters;
(iii) Such Selling Stockholder has, and immediately prior to
the Time of Delivery (as defined in Section 4 hereof) such
Selling Stockholder will have, good and valid title to the Shares
owned by it, free and clear of all liens, encumbrances, equities
or claims; and, upon delivery of such Shares and payment therefor
pursuant hereto and thereto, good and valid title to such Shares,
free and clear of all liens, encumbrances, equities or claims,
will pass to the several Underwriters;
(iv) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action which is designed to or
which has constituted or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of
the Shares;
(v) To the extent that any statements or omissions made in
the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto are made in
reliance upon and in conformity with written information
furnished to the Company by such Selling Stockholder expressly
for use therein, such Preliminary Prospectus and the Registration
Statement did, and the Prospectus and any further amendments or
supplements to the Registration Statement and the Prospectus
will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects
to the requirements of the Act and the rules and regulations of
the Commission thereunder, and not contain an untrue statement of
a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; and
(vi) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and
Fiscal Responsibility Act of 1982 with respect to the
transactions herein contemplated, such Selling Stockholder will
deliver to you prior to or at the Time of Delivery (as defined in
Section 4 hereof) a properly completed and executed United States
Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu
thereof).
(c) Any certificate signed by an officer of the Company, any
Selling Stockholder or any attorney-in-fact, and delivered to the
Underwriters or counsel for the Underwriters shall be deemed a
representation and warranty of the Company or the applicable Selling
Stockholder as to the matters covered thereby.
2. Subject to the terms and conditions herein set forth, (a) each
Selling Stockholder agrees to sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the
Selling Stockholders, at a purchase price per share of $ , the number of
Firm Shares (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying the aggregate number of Firm Shares to be sold by
each of the Selling Stockholders as set forth opposite their respective
names in Schedule I hereto by a fraction, the numerator of which is the
aggregate number of Firm Shares to be purchased by such Underwriter as set
forth opposite the name of such Underwriter in Schedule II hereto and the
denominator of which is the aggregate number of Firm Shares to be purchased
by all the Underwriters from all the Selling Stockholders hereunder and (b)
in the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Shares as provided below, each of the Selling
Stockholders and the Company agrees, severally and not jointly, to
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sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from each of the Selling
Stockholders and the Company, at the purchase price per share set forth in
clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you
so as to eliminate fractional shares) determined by multiplying such number
of Optional Shares by a fraction, the numerator of which is the maximum
number of Optional Shares which such Underwriter is entitled to purchase as
set forth opposite the name of such Underwriter in Schedule II hereto and
the denominator of which is the maximum number of Optional Shares that all
the Underwriters are entitled to purchase hereunder.
The Selling Stockholders and the Company hereby grant to the
Underwriters the right to purchase at their election up to 600,000 Optional
Shares, at the purchase price per share set forth in the paragraph above,
for the sole purpose of covering overallotments in the sale of the Firm
Shares. Of these Optional Shares, Ford has granted such rights for 1,000
shares of Series A Convertible Preferred Stock that is convertible
automatically upon the consummation of the sale of such Series A
Convertible Preferred Stock into 100,000 shares (the "Ford Optional
Shares"), Atlantic has granted such rights for 50,000 shares (the "Atlantic
Optional Shares") and the Company has granted such rights for 450,000
shares (the "Company Optional Shares"). The Underwriters agree that, to the
extent the election to purchase Optional Shares is exercised only in part,
the election will be exercised, in order of priority, first for the Ford
Optional Shares, then for the Atlantic Optional Shares and then for the
Company Optional Shares. Any such election to purchase Optional Shares may
be exercised only by written notice from you to the applicable Selling
Stockholder or the Company, as the case may be, given within a period of 45
calendar days after the date of this Agreement, setting forth the aggregate
number of Optional Shares to be purchased and the date on which such
Optional Shares are to be delivered, as determined by you but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof)
or, unless you and the Selling Stockholders and the Company otherwise agree
in writing, earlier than two or later than ten business days after the date
of such notice.
3. Upon the authorization by you of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus and, in
connection with such offer or the sale of such Firm Shares, will use the
Prospectus, together with any amendment or supplement thereto, that
specifically describes the Firm Shares, in the form which has been most
recently distributed to them by the Company, only as permitted or
contemplated thereby, and will offer and sell such Firm Shares only as
permitted by the Act and applicable securities laws or regulations of any
jurisdiction. The Representatives will inform the Company when they have
authorized the sale of the Firm Shares to the public and when they have
been advised that such Firm Shares have been sold by the several
Underwriters promptly after such sales are completed.
4. (a) The Shares to be purchased by each Underwriter hereunder,
in definitive form, and in such authorized denominations and registered in
such names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight
hours' prior notice to the Selling Stockholders and the Company, shall be
delivered by or on behalf of the Selling Stockholders and, if applicable,
the Company to Xxxxxxx, Sachs & Co., for the account of such Underwriter,
against payment by or on behalf of such Underwriter of the purchase price
therefor in same-day funds. The Selling Stockholders and, if applicable,
the Company will cause the certificates representing the Shares to be made
available for checking and packaging at least twenty-four hours prior to
the Time of Delivery (as defined below) at the office of Xxxxxxx, Xxxxx &
Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Designated
Office"). The time and date of such delivery and payment shall be, with
respect to the Firm Shares, 9:30 a.m., New York City time, on October ,
1997 or such other time and date as Xxxxxxx, Sachs & Co. and the Selling
Stockholders and the Company may agree upon in writing, and, with respect
to the Optional Shares, 9:30 a.m., New York time, on the date specified by
Xxxxxxx, Xxxxx & Co. in the written notice given by Xxxxxxx, Sachs & Co. of
the Underwriters' election to purchase such Optional Shares, or such other
time and date as Xxxxxxx, Xxxxx & Co., the Selling Stockholders and the
Company may agree upon in writing. Such time and date for delivery of the
Firm Shares is herein called the "First Time of Delivery", such time and
date for delivery of the Optional Shares, if not the First Time of
Delivery, is herein called the "Second Time of Delivery", and each such
time and date for delivery is herein called "Time of Delivery".
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(b) The documents to be delivered at the Time of Delivery by or
on behalf of the parties hereto pursuant to Section 7 hereof, including the
cross receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(i) hereof, will be delivered at the
offices of Cravath, Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Closing Location"), and the Shares will be delivered at the
Designated Office, all at the Time of Delivery. A meeting will be held at
the Closing Location at 2:00 p.m., New York City time, on the New York
Business Day next preceding the Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later than
the Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus prior to the Time of Delivery which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish you with
copies thereof; to advise you, promptly after it receives notice thereof,
of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process or to subject itself to
taxation in any jurisdiction;
(c) Promptly, and in any event no later than 12:00 (noon) on the
second New York Business Day preceding the Time of Delivery, and from time
to time, to furnish the Underwriters with copies of the Prospectus in New
York City in such quantities as you may reasonably request, and, if the
delivery of a prospectus is required at any time prior to the expiration of
nine months after the time of issue of the Prospectus in connection with
the offering or sale of the Shares and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such period to amend or supplement the
Prospectus in order to comply with the Act, to notify you and upon your
request to prepare and furnish without charge to each Underwriter and to
any dealer in securities as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a prospectus
in connection with sales of any of the Shares at any time nine months or
more after the time of issue of the Prospectus, upon your request but at
the expense of such Underwriter, to prepare and deliver to such Underwriter
as many copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
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(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations thereunder (including, at the option of the Company,
Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, any securities of the Company that are
substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that represent
the right to receive, Stock or any such substantially similar securities
(other than pursuant to employee stock option plans existing on, or upon
the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement); provided, however, that
during such 90-day period, the Company may issue up to 500,000 shares of
Class A Common Stock in connection with acquisitions;
(f) During the period of five years hereafter, to furnish to its
stockholders as soon as practicable after the end of each fiscal year an
annual report (including a balance sheet and statements of income,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective
date of the Registration Statement), consolidated summary financial
information of the Company and its subsidiaries for such quarter in
reasonable detail; and
(g) To use its best efforts to list, subject to notice of
issuance, the Shares on the New York Stock Exchange (the "Exchange").
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or
producing this Agreement or any Blue Sky Memorandum; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky
survey; (iv) all fees and expenses in connection with listing the Shares on
the Exchange; (v) the filing fees incident to securing any required review
by the National Association of Securities Dealers, Inc. of the terms of the
sale of the Shares; (vi) the cost of preparing stock certificates; (vii)
the cost and charges of any transfer agent or registrar; and (viii) all
other costs and expenses incident to the performance of its obligations and
the obligations of the Selling Stockholders hereunder (other than
underwriting discounts and commissions) which are not otherwise
specifically provided for in this Section. The Company will pay or cause to
be paid all costs and expenses incident to the performance of its
obligations and the obligations of the Selling Stockholders hereunder which
are not otherwise specifically provided for in this Section, including any
fees and expenses of its counsel and all expenses and taxes incident to the
sale and delivery of the Shares to be sold by it to the Underwriters
hereunder. It is understood, however, that, except as provided in this
Section, and Sections 8 and 11 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, stock
transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the
Shares to be delivered at the Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and
other statements of the Company and each of the Selling Stockholders herein
are, at and as of the Time of Delivery, true and correct, the condition
that each of the Company and each Selling
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Stockholder shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Registration Statement shall have become effective and
the Prospectus shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a)
hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with or otherwise satisfied to your reasonable
satisfaction;
(b) Cravath, Swaine & Xxxxx, counsel for the Underwriters, shall
have furnished to you such opinion or opinions, dated the Time of Delivery,
with respect to the Shares being delivered at such Time of Delivery, the
Registration Statement, the Prospectus, and such other related matters as
you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) King & Spalding, counsel for the Company, shall have
furnished to you their written opinion, dated the Time of Delivery, in form
and substance reasonably satisfactory to you, to the effect that:
(i) the Company has been duly incorporated and validly
exists as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus;
(ii) the Company's authorized capital stock is as set forth
in the Registration Statement and the Prospectus under the
caption "Description of Capital Stock"; the Shares and all other
shares of the Class A Common Stock, Class B Common Stock and
Series A Preferred Stock, if any, of the Company outstanding at
the Time of Delivery have been duly authorized and validly
issued, are fully paid and nonassessable and conform to the
description thereof contained in the Prospectus under the caption
"Description of Capital Stock"; and the Shares have been listed
on the New York Stock Exchange;
(iii) to the knowledge of such counsel, the Company is the
sole ultimate beneficial owner of all outstanding capital stock
of BRACC and each subsidiary of the Company, free and clear of
all security interests, claims, liens or encumbrances;
(iv) except as described in the Prospectus and filed as
exhibits to the Registration Statement, there are no contracts,
agreements or understandings known to such counsel between the
Company and any person granting such person the right to require
the Company 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;
(v) no consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is
required for any issue and sale of the Company Optional Shares or
the consummation by the Company of the transactions contemplated
by this Agreement, except such as have been obtained and made
under the Act and such as may be required under state securities
laws, as to which laws such counsel may express no opinion;
(vi) the execution, delivery and performance by the Company
of this Agreement and any issuance and sale of the Company
Optional Shares will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under,
(1) any statute, rule, regulation or order of any governmental
agency or body or any court having jurisdiction over the Company
or any Subsidiary or any of their properties, (2) any agreement
or instrument filed as an exhibit to the Registration Statement
to which the Company 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
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or any such Subsidiary is subject, or (3) the charter or by-laws
of the Company or any subsidiary of the Company, except, in the
case of clause (1) or (2), such breaches, violations or defaults
that, individually or in the aggregate, would not have a Material
Adverse Effect; in the event the Company Optional Shares are
purchased by the Underwriters, the Company has corporate power
and authority to authorize, issue and sell the Company Optional
Shares as contemplated by this Agreement;
(vii) the Initial Registration Statement was declared
effective under the Act as of the date and time specified in such
opinion, the Prospectus either was filed with the Commission
pursuant to the subparagraph of Rule 424(b) specified in such
opinion on the date specified therein or was included in the
Registration Statement, and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending
or contemplated under the Act, and the Registration Statement and
the Prospectus, and each amendment or supplement thereto, as of
their respective effective or issue dates, complied as to form in
all material respects with the requirements of the Act and the
Rules and Regulations; the descriptions under the captions,
"Business--Regulatory and Environmental Matters," "Description of
Capital Stock," "Description of Certain Indebtedness" and Part
II, Item 14 "Indemnification of Directors and Officers" in the
Registration Statement and the Prospectus of matters of law
(including, without limitation, matters relating to Environmental
Laws), statutes and contracts and other documents are accurate in
all material respects and fairly present the information required
to be shown in a registration statement on Form S-1; and such
counsel do not know of any legal or governmental proceedings to
which the Company or any Subsidiary of the Company is a party
required to be described in the Registration Statement or the
Prospectus which are not described as required or of any
contracts or documents of a character required to be described in
the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not described or
filed as required (it being understood that such counsel need
express no opinion as to the financial statements and schedule or
other financial and statistical data contained in the
Registration Statement or the Prospectus);
(viii) this Agreement has been duly authorized, executed and
delivered by the Company, and represents a valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights, and to
general principles of equity, whether applied by a court of law
or equity, and except that the enforceability of the rights to
indemnity and contribution pursuant to Section 8 hereunder may be
limited by federal or state securities laws or by public policy;
(ix) to the knowledge of such counsel, except for (A) the
1,936,600 shares of Class B Common Stock, which are convertible
into 1,936,600 shares of Class A Common Stock, (B) the options to
purchase 1,932,150 shares of Class A Common Stock and Class B
Common Stock issued under the 1994 Option Plan, (C) the options
to purchase 130,000 shares of Class A Common Stock under the 1994
Directors' Plan, (D) the $80.0 million aggregate principal amount
of Series A Notes which are convertible into 3,986,049 shares of
Class A Common Stock, (E) the $45.0 million aggregate principal
amount of Series B Notes, which are convertible into 1,609,442
shares of Class A Common Stock, (F) 100,000 shares of Class A
Common Stock issuable upon conversion of Series A Convertible
Preferred Stock, if any, and (G) 50,000 shares of Class A Common
Stock reserved for issuance upon exercise of the warrant held by
Atlantic Equity Corporation, each as described in the
Registration Statement and the Prospectus, and except for the
rights of the respective parties to the OPCO Agreement, there are
no outstanding securities of the Company that are convertible
into Class A Common Stock; and
(x) to the knowledge of such counsel, except for (A) the
rights of first refusal set forth in the Share Exchange Agreement
dated April 25, 1994, as amended on June 13, 1994 and July 5,
1994, among the Company, Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx
Xxxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx and Xxxxxxx Xxxxx, (B) the
rights of Xxxxx Xxxxxxx and Xxxxxx Xxxxxxx to receive
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additional shares of Class A Common Stock, as set forth in the
Agreement, dated March 8, 1995, among the Company, Team Rental of
Connecticut, Inc., Rental Car Resources, Inc., Xxxxx Xxxxxxx and
Xxxxxx Xxxxxxx, and (C) the rights of the parties to the OPCO
Agreement, there are no preemptive or other rights to subscribe
for or purchase any shares of capital stock issued by the Company
or any subsidiary of the Company. Except for (A) the transfer
restrictions set forth in the Registration Rights Agreements, (B)
Section 5(e) of this Agreement, (C) the voting restrictions set
forth in the Shareholders' Agreement dated October 20, 1995 among
the Company, the holders of Class B Common Stock and SOCAL, (D)
the restrictions set forth in the Senior Notes Agreements and (E)
the restrictions set forth in the Credit Agreement, there are no
restrictions to which the Company is a party upon the voting or
transfer of, and no restrictions on the declaration or payment of
any dividend or distribution on, any shares of capital stock of
the Company or any Subsidiary.
In addition, such counsel shall state that such counsel have no
reason to believe that any part of the Registration Statement or any
amendment thereto, as of its effective date or as of such Time of Delivery,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus or any amendment
or supplement thereto, as of its issue date or as of such Time of Delivery,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(d) Each of Xxxx X. Xxxxxxxxx, counsel for Ford, , counsel
for SoCal, and Xxxxxxxx X. Xxxxxxx, counsel for Atlantic, shall have
furnished to you and the Company their written opinion dated the Time of
Delivery, in form and substance reasonably satisfactory to you, to the
effect that:
(i) This Agreement has been duly executed and delivered by
or on behalf of the applicable Selling Stockholder;
(ii) The sale of the Shares by the applicable Selling
Stockholder under this Agreement and the compliance by the
applicable Selling Stockholder with all of the provisions of this
Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or
violation of any terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to which the
applicable Selling Stockholder is bound or to which any of the
property or assets of such Selling Stockholder is subject, nor
will such action result in any violation of the provisions of the
certificate of incorporation or by-laws of the applicable Selling
Stockholder or any statute or any order, rule or regulation known
to such counsel of any court or governmental agency or body
having jurisdiction over the applicable Selling Stockholder or
any of its subsidiaries or any of their respective properties,
except for (other than in the case of the certificate of
incorporation and the by-laws) such conflicts, breaches,
violations or defaults which would not, individually or in the
aggregate, have a material adverse effect on the condition,
financial or otherwise, earnings, business affairs or business
prospects of the applicable Selling Stockholder and its
subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business;
(iii) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the sale of Shares or
the consummation by the applicable Selling Stockholder of the
transactions contemplated by this Agreement, except the
registration under the Act and the Exchange Act of the Shares,
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign
securities or Blue Sky laws or by the rules and regulations of
the NASD in connection with the purchase and distribution of the
Shares by the Underwriters;
(iv) Immediately prior to the Time of Delivery the
applicable Selling Stockholder had good and valid title to the
Shares to be sold at the Time of Delivery by such Selling
Stockholder under this Agreement, free and clear of all liens,
encumbrances, equities or claims, and full
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right, power and authority to sell, assign, transfer and deliver
the applicable Shares to be sold by the Selling Stockholder
hereunder and thereunder; and
(v) Good and valid title to such Shares, free and clear of
all liens, encumbrances, equities or claims arising by, through
or under the applicable Selling Stockholder, has been transferred
to each of the several Underwriters.
In rendering such opinion, such counsel may (i) state that they
express no opinion as to the laws of any jurisdiction other than the laws
of the United States of America, to the extent specifically referred to
therein, and the laws of the State of New York or, in the case of Ford, the
State of Michigan or, in the case of Atlantic, the State of North Carolina,
and the Delaware General Corporation Law, and (ii) rely upon the opinions
of local counsel and in respect of matters of fact upon certificates of the
applicable Selling Stockholder or its subsidiaries.
(e) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at the
Time of Delivery, (i) Xxxxxx Xxxxxxxx LLP shall have furnished to you a
letter or letters, dated the respective dates of delivery thereof, in form
and substance satisfactory to you, substantially to the effect set forth in
Annex I hereto and (ii) KPMG Peat Marwick LLP shall have furnished to you a
letter or letters, dated the respective dates of delivery thereof, in form
and substance satisfactory to you, substantially to the effect set forth in
Annex II hereto;
(f) Neither the Company nor any of its Subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus
and other than such losses or interferences which would not, individually
or in the aggregate, have a Material Adverse Effect, and (ii) since the
respective dates as of which information is given in the Prospectus there
shall not have been any change in the capital stock or long-term debt of
the Company or any of its Subsidiaries in or affecting the business
affairs, business prospects, management, consolidated financial position,
stockholders' equity or results of operations of the Company and its
Subsidiaries considered as one enterprise, otherwise than as set forth in
or contemplated by the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the Underwriters so
material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered at
the Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(g) On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the Exchange; (iii) a
general moratorium on commercial banking activities declared by either
Federal or New York State authorities; or (iv) the outbreak or escalation
of hostilities involving the United States which have resulted in the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in clauses (i) through (iv) in the
judgment of the Representatives makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being
delivered at the Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(h) The Shares to be sold by the Selling Stockholders at the Time
of Delivery shall have been duly listed, subject to notice of issuance, on
the Exchange;
(i) The Company and each Selling Stockholder shall have furnished
or caused to be furnished to you at such Time of Delivery certificates of
the Company and the Selling Stockholders, respectively, satisfactory to you
as to the accuracy of the representations and warranties of the Company and
the Selling Stockholders herein at and as of the Time of Delivery, as to
the performance by the Company and the Selling Stockholders, respectively,
of all of their obligations hereunder to be performed at or prior to the
Time of Delivery, as to the matters set forth in subsections (a) and (f) of
this Section and as to such other matters as you may reasonably request;
and
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16
(j) The Company shall have furnished or caused to be furnished to
you on the date hereof a letter from each of the Company's directors and
executive officers (other than directors and executive officers owning an
aggregate of less than 1% of the outstanding Class A Common Stock as of the
effective date of the Initial Registration Statement) substantially similar
to the agreement contained in Section 5(e) hereof.
8. (a) The Company and each Selling Stockholder, jointly and
severally, will indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action
or claim as such expenses are incurred; provided, however, that the Company
and each Selling Stockholder shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance
upon and in conformity with written information furnished to the Company by
any Underwriter through Xxxxxxx, Sachs & Co. expressly for use therein; and
provided further, however, that the Company and any Selling Stockholder
shall not be liable with respect to any Preliminary Prospectus,
Registration Statement or the Prospectus, or any amendment or supplement
thereto, to any Underwriter or any person controlling such Underwriter
under the imdemnity agreement in this subsection (a) to the extent that
such loss, claim, damage or liability of such Underwriter or controlling
person results from the fact that such Underwriter sold such Shares to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus or of the Prospectus as
then amended or supplemented (excluding documents incorporated by
reference) in any case where such delivery is required by the Act and (A)
the defect in such Preliminary Prospectus was cured in the Prospectus or
the Prospectus as then amended or supplemented and (B) such Underwriter had
previously been furnished by or on behalf of the Company (prior to the date
of mailing by such Underwriter of the applicable confirmation) with a
sufficient number of copies of the Prospectus as so amended or
supplemented.
(b) Each Underwriter will indemnify and hold harmless the Company
and each Selling Stockholder against any losses, claims, damages or
liabilities to which the Company or each Selling Stockholder may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance
upon and in conformity with written information furnished to the Company by
such Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein;
and will reimburse the Company and any Selling Stockholder for any legal or
other expenses reasonably incurred by the Company or any Selling
Stockholder, as the case may be, in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) (1) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party under such subsection, except to
the extent it has been materially prejudiced by such failure. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory
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to such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by
such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation; provided, however, if the defendants in
any such action include both an indemnified party and an indemnifying party
and the indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party,
the indemnified party or parties under subsection (a) or (b) above shall
have the right to employ not more than one counsel (and one local counsel
in each jurisdiction) reasonably satisfactory to the indemnifying party to
represent them and, in that event, the fees and expenses of not more than
one such separate counsel shall be paid by the indemnifying party, as such
expenses are incurred. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of,
or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party
is an actual or potential party to such action or claim) unless such
settlement, compromise or judgment (i) includes an unconditional release of
the indemnified party from all liability arising out of such action or
claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
This subsection (c)(1) shall apply only to actions or claims made by or
against the Company, SoCal or Atlantic.
(2) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof, and in the event
that such indemnified party shall not so notify the indemnifying party
within 30 days following receipt of any such notice by such indemnified
party, the indemnifying party shall have no further liability under such
subsection to such indemnified party unless such indemnifying party shall
have received other notice addressed and delivered in the manner provided
in the second paragraph of Section 12 hereof of the commencement of such
action; but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party,
and, after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof
other than reasonable costs of investigation. This subsection (c)(2) shall
apply only to actions or claims made by or against Ford.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company and
each Selling Stockholder on the one hand and the Underwriters on the other
from the offering of the Shares. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law, then
each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company and
each Selling Stockholder 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 (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received
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by the Company and each Selling Stockholder on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Shares purchased under this
Agreement (before deducting expenses) received by the Company and each
Selling Stockholder bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the Shares
purchased under this Agreement, 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 any Selling
Stockholder on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission, including with respect to
such Underwriters, the extent to which such losses, claims, damages or
liabilities (or actions in respect thereof) result from the fact that such
Underwriters sold Shares to a person to whom there was not sent or given,
at or prior to the written confirmation of such sale, a copy of the
Prospectus or of the Prospectus as then amended or supplemented (excluding
documents incorporated by reference) whichever is most recent, if the
Company has previously furnished copies thereof to the Underwriters. The
Company, the Selling Stockholders and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this subsection (d)
were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above in this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Shares underwritten by it
and distributed to the public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
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 and each Selling Stockholder
under this Section 8 shall be in addition to any liability which the
Company and each Selling Stockholder may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon
the same terms and conditions, to each officer and director of the Company
or any Selling Stockholder and to each person, if any, who controls the
Company or any Selling Stockholder within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at the Time
of Delivery, you may in your discretion arrange for you or another party or
other parties to purchase such Shares on the terms contained herein. If
within thirty-six hours after such default by any Underwriter you do not
arrange for the purchase of such Shares, then the Selling Stockholders
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to you to purchase such
Shares on such terms. In the event that, within the respective prescribed
periods, you notify the Selling Stockholders that you have so arranged for
the purchase of such Shares, or the Selling Stockholders notify you that
they have so arranged for the purchase of such Shares, you or the Selling
Stockholders shall have the right to postpone the Time of Delivery for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus,
or in any other documents or arrangements, and the Company agrees to file
promptly any amendments to the
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Registration Statement or the Prospectus which in your opinion and the
opinion of counsel for the Selling Stockholders may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the
Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed
one-eleventh of the aggregate number of all the Shares to be purchased at
the Time of Delivery, then the Selling Stockholders shall have the right to
require each non-defaulting Underwriter to purchase the number of Shares
which such Underwriter agreed to purchase hereunder at the Time of Delivery
and, in addition, to require each non-defaulting Underwriter to purchase
its pro rata share (based on the number of Shares which such Underwriter
agreed to purchase hereunder) of the Shares of such defaulting Underwriter
or Underwriters for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the
Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all the Shares to be purchased at the Time of Delivery,
or if the Selling Stockholders shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase
Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Selling Stockholders and the Company to
sell the Optional Shares) may thereupon be terminated either by any of the
Selling Stockholders or, through you, by such Underwriters as have agreed
to purchase in the aggregate 50% or more of the aggregate number of
remaining Shares to be purchased at such Time of Delivery without liability
on the part of any non-defaulting Underwriter or the Company, except for
the expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Sections
8 and 9 hereof; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the several Selling
Stockholders and the several Underwriters, as set forth in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement,
shall remain in full force and effect, regardless of any investigation (or
any statement as to the results thereof) made by or on behalf of any
Underwriter or any controlling person of any Underwriter, or the Company,
or any Selling Stockholder, or any officer or director or controlling
person of the Company, or any controlling person of any Selling
Stockholder, and shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, or if any Shares are not delivered by the Selling Stockholders as
provided for herein because the condition set forth in Section 7(g) hereof
has not been met, neither the Company nor any Selling Stockholder shall
then be under any liability to any Underwriter except as provided in
Sections 6 and 8 hereof; but, if for any other reason, any Shares are not
delivered by or on behalf of any Selling Stockholder as provided herein,
the Company will reimburse the Underwriters through you for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Shares not so
delivered, but the Company and the Selling Stockholders shall then be under
no further liability to any Underwriter in respect of the Shares not so
delivered except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of
the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by you jointly or by Xxxxxxx, Xxxxx & Co. on
behalf of you as the representatives.
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20
All statements, requests, notices and agreements hereunder shall
be in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to you as the representatives at in
care of Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Registration Department; if to Ford shall be delivered or sent
by mail, telex or facsimile transmission to The Xxxxxxxx Xxxx, Xxxx 0000,
Xxxxxxxx, XX 00000, Fax: (000) 000-0000, Attention: Secretary; if to SoCal
shall be delivered or sent by mail, telex or facsimile transmission to 000
Xxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxx, XX 00000, Fax: ( ) , Attention: Xxxxxxx
X. Xxxxxx; if to Atlantic shall be delivered or sent by mail, telex or
facsimile transmission to Legal Department, 000 Xxxxx Xxxxx Xxxxxx,
XXX-000-00-00, Xxxxxxxxx, XX 00000, Fax: (000) 000-0000, Attention:
Xxxxxxxx X. Xxxxxxx; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set
forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to
the Company or the Selling Stockholders by you upon request. Any such
statements, requests, notices or agreements shall take effect at the time
of receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholders and,
to the extent provided in Sections 8 and 10 hereof, the officers and
directors of the Company and each Selling Stockholder and each person who
controls the Company, any Selling Stockholder or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Shares from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. This Agreement may be executed by any one or more of the
parties hereto 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 instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us one for the Company, one for each Selling Stockholder
and for each of the Representatives plus one for each counsel counterparts
hereof, and upon the acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof shall constitute a
binding agreement between each of the Underwriters, the Company and each of
the Selling Stockholders. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Company and the Selling Stockholders for
examination upon request, but without warranty on your part as to the
authority of the signers thereof. You represent that you are authorized on
behalf of yourselves and each of the Underwriters to enter into this
Agreement.
Very truly yours,
BUDGET GROUP, INC.,
By:
--------------------
Name:
Title:
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Ford FSG, Inc.,
By:
---------------------
Name:
Title:
Budget Rent-A-Car of Southern
California,
By:
---------------------
Name:
Title:
Atlantic Equity Corporation,
By:
----------------------
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Sachs & Co.
Credit Suisse First Boston Corporation
ABN AMRO Chicago Corporation
BT Alex. Xxxxx Incorporated
XxXxxxxx & Company Securities, Inc.
X.X. Xxxxxx Securities Inc.
By:
---------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
22
SCHEDULE I
Number of Optional
Total Number Shares to be Sold if
of Firm Shares Maximum Option
To Be Sold Exercised
Ford FSG, Inc. 4,400,000 100,000
Budget Rent-A-Car of 180,000
Southern California
Atlantic Equity Corporation 137,500 50,000
Budget Group, Inc. (1) -- 450,000
--------- ---------
Total 4,717,500 600,000
========= =========
(1) Budget Group, Inc. is not a Selling Stockholder but is included in
this Schedule I for purposes of certain formulas included in this
Agreement.
23
SCHEDULE II
Number of Optional
Shares to be
Total Number Purchased if
of Firm Shares Maximum Option
to be Purchased Exercised
Underwriter
Xxxxxxx, Xxxxx & Co.
Credit Suisse First Boston
Corporation
ABN AMRO Chicago
Corporation
BT Alex. Xxxxx Incorporated
XxXxxxxx & Company
Securities, Inc.
X.X. Xxxxxx Securities Inc.
--------- -------
Total 4,537,500 600,000
========= =======
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SCHEDULE III
State of
Subsidiary Incorporation
BTI (UK) plc United Kingdom
Budget Car Sales Delaware
Budget Fleet Financing Corporation Delaware
Budget Funding Corporation Delaware
Budget Rent a Car Corporation Delaware
Budget Rent a Car International, Inc. Delaware
Budget Rent a Car Systems, Inc. Delaware
Team Fleet Financing Corporation Delaware
VPSI, Inc. Delaware
25
ANNEX I
FORM OF ANNEX I DESCRIPTION OF COMFORT LETTER
FOR REGISTRATION STATEMENTS ON FORM S-1
Pursuant to Section 7(e) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its Subsidiaries within the meaning of
the Act and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if
applicable, financial forecasts and/or pro forma financial
information) examined by them and included in the Prospectus or
the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act
and the related published rules and regulations thereunder; and,
if applicable, they have made a review in accordance with
standards established by the American Institute of Certified
Public Accountants of the unaudited consolidated interim
financial statements, selected financial data, pro forma
financial information, financial forecasts and/or condensed
financial statements derived from unaudited financial statements
of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been
furnished separately to the representatives of the Underwriters
(the "Representatives");
(iii) If applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the unaudited condensed consolidated
statement of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus as indicated
in their reports thereon copies of which have been separately
furnished to the Representatives and on the basis of specified
procedures including inquiries of officials of the Company who
have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial
statements referred to in paragraph (vi)(A)(i) below comply as to
form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Company as of December 31, 1996 and 1995 and for
the three years in the period ended December 31, 1996 included in
the Prospectus agrees with the corresponding amounts (after
restatements where applicable) in the audited consolidated
financial statements for 1996, 1995 and 1994;
(v) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of
Regulation S-K and on the basis of limited procedures specified
in such letter nothing came to their attention as a result of the
foregoing procedures that caused them to believe that this
information does not conform in all material respects with the
disclosure requirements of Items 301 and 302 of Regulation S-K;
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2
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing
standards, consisting of a reading of the unaudited financial
statements and other information referred to below, a reading of
the latest available interim financial statements of the Company
and its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the date of the latest audited
financial statements included in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus 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 (ii) any
material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows
included in the Prospectus for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited
consolidated financial statements included in the
Prospectus;
(C) the unaudited financial statements which were
not included in the Prospectus but from which were derived
any unaudited condensed financial statements referred to in
Clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred
to in Clause (B) were not determined on a basis
substantially consistent with the basis for the audited
consolidated financial statements included in the
Prospectus;
(D) if applicable, any unaudited pro forma
consolidated condensed financial statements included in the
Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and
the published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any
changes in the consolidated capital stock (other than
issuances of capital stock upon exercise of options and
stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in
each case which were outstanding on the date of the latest
financial statements included in the Prospectus) or any
increase in the consolidated long-term debt of the Company
and its subsidiaries, or any decreases in consolidated net
current assets or stockholders' equity or other items
specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
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(F) for the period from the date of the latest
financial statements included in the Prospectus to the
specified date referred to in Clause (D) there were any
decreases in consolidated net revenues or consolidated net
income or other items specified by the Representatives, or
any increases in any items specified by the Representatives,
in each case as compared with the comparable period of the
preceding year and with any other period of corresponding
length specified by the Representatives, except in each case
for decreases or increases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
(vii) In addition to the examination referred to in their
report(s) included in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried
out certain specified procedures, not constituting an examination
in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information
specified by the Representatives, which are derived from the
general accounting records of the Company and its subsidiaries,
which appear in the Prospectus, or in Part II, or in exhibits and
schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records
of the Company and its subsidiaries and have found them to be in
agreement.
28
ANNEX II
FORM OF ANNEX I DESCRIPTION OF COMFORT LETTER
FOR REGISTRATION STATEMENTS ON FORM S-1
Pursuant to Section 7(e) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its Subsidiaries within the meaning of
the Act and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if
applicable, financial forecasts and/or pro forma financial
information) examined by them and included in the Prospectus or
the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act
and the related published rules and regulations thereunder; and,
if applicable, they have made a review in accordance with
standards established by the American Institute of Certified
Public Accountants of the unaudited consolidated interim
financial statements, selected financial data, pro forma
financial information, financial forecasts and/or condensed
financial statements derived from unaudited financial statements
of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been
furnished separately to the representatives of the Underwriters
(the "Representatives");
(iii) If applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the unaudited condensed consolidated
statement of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus as indicated
in their reports thereon copies of which have been separately
furnished to the Representatives and on the basis of specified
procedures including inquiries of officials of the Company who
have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial
statements referred to in paragraph (vi)(A)(i) below comply as to
form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Company as of December 31, 1996 and 1995 and for
the three years in the period ended December 31, 1996 included in
the Prospectus agrees with the corresponding amounts (after
restatements where applicable) in the audited consolidated
financial statements for 1996, 1995 and 1994;
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing
standards, consisting of a reading of the unaudited financial
statements and other information referred to below, a reading of
the latest available interim financial statements of the Company
and its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the date of the latest audited
financial statements included in the Xxxxxxxxxx,
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inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus 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 (ii) any
material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows
included in the Prospectus for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited
consolidated financial statements included in the
Prospectus; and
(C) the unaudited financial statements which were
not included in the Prospectus but from which were derived
any unaudited condensed financial statements referred to in
Clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred
to in Clause (B) were not determined on a basis
substantially consistent with the basis for the audited
consolidated financial statements included in the
Prospectus; and
(vi) In addition to the examination referred to in their
report(s) included in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried
out certain specified procedures, not constituting an examination
in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information
specified by the Representatives, which are derived from the
general accounting records of the Company and its subsidiaries,
which appear in the Prospectus, or in Part II, or in exhibits and
schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records
of the Company and its subsidiaries and have found them to be in
agreement.
