EXHIBIT 1
2,200,000 Shares of Common Stock
FORWARD AIR CORPORATION
UNDERWRITING AGREEMENT
_____________, 2003
BEAR, XXXXXXX & CO. INC.
DEUTSCHE BANK SECURITIES INC.
BB&T CAPITAL MARKETS,
a division of Xxxxx & Xxxxxxxxxxxx, Inc.
As Representatives of the
Several Underwriters
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies/Gentlemen:
Xxxxx X. Xxxxxxxxx (the "Selling Shareholder") proposes to sell to the
several underwriters (the "Underwriters") named in Schedule I hereto, for whom
you are acting as representatives (the "Representatives"), an aggregate of
2,200,000 shares (the "Firm Shares") of the Common Stock, $0.01 par value (the
"Common Stock"), of Forward Air Corporation, a Tennessee corporation (the
"Company"). The East Tennessee Foundation (the "Option Shareholder") also
proposes to sell at the Underwriters' option an aggregate of up to 330,000
additional shares of the Common Stock (the "Option Shares") as set forth below.
The Selling Shareholder and the Option Shareholder are sometimes referred to
herein collectively as the "Sellers." The respective amounts of the Firm Shares
to be so purchased by the several Underwriters are set forth opposite their
names in Schedule I hereto.
As the Representatives, you have advised the Company, the Selling
Shareholder and the Option Shareholder (a) that you are authorized to enter into
this Agreement on behalf of the several Underwriters and (b) that the several
Underwriters are willing, acting severally and not jointly, to purchase the
numbers of Firm Shares set forth opposite their respective names in Schedule I,
plus their pro rata portion of the Option Shares if you elect to exercise the
over-allotment option in whole or in part for the accounts of the several
Underwriters. The Firm Shares and the Option Shares (to the extent the option is
exercised) are herein collectively called the "Shares." If the Underwriters
listed on Schedule I include only the Representatives, then references herein to
the Representatives shall mean the Underwriters.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY, THE SELLING SHAREHOLDER
AND THE OPTION SHAREHOLDER.
(a) The Company represents and warrants to each of the Underwriters as
follows:
(i) A registration statement on Form S-3 (File No. 333-110015) with
respect to the Shares has been prepared by the Company in conformity in all
material respects with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the Rules and Regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder and has
been filed with the Commission. The Company has complied with the conditions for
the use of Form S-3. Copies of such registration statement, including any
amendments thereto, the preliminary prospectuses (meeting the requirements of
the Rules and Regulations in all material respects) contained therein and the
exhibits, financial statements and schedules, as finally amended and revised,
have heretofore been delivered by the Company to you. Such registration
statement, together with any registration statement filed by the Company
pursuant to Rule 462(b) of the Act, herein referred to as the "Registration
Statement," which shall be deemed to include all information omitted therefrom
in reliance upon Rule 430A and contained in the Prospectus referred to below,
has become effective under the Act, and no post-effective amendment to the
Registration Statement has been filed as of the date of this Agreement. As used
in this Agreement, "Prospectus" means (a) the form of prospectus first filed
with the Commission pursuant to Rule 424(b) or (b) the last preliminary
prospectus included in the Registration Statement filed prior to the time it
becomes effective or filed pursuant to Rule 424(a) under the Act that is
delivered by the Company to the Underwriters for delivery to purchasers of the
Shares, together with any term sheet or abbreviated term sheet filed with the
Commission pursuant to Rule 424(b)(7) under the Act. Each preliminary prospectus
included in the Registration Statement prior to the time it becomes effective is
herein referred to as a "Preliminary Prospectus." Any reference herein to the
Registration Statement, any Preliminary Prospectus or to the Prospectus shall be
deemed to refer to and include any documents incorporated by reference therein
as of the date hereof or the date of the Prospectus, and, in the case of any
reference herein to any Prospectus, also shall be deemed to include any
documents incorporated by reference therein as of the date of the Prospectus,
and any supplements or amendments thereto, filed with the Commission after the
date of filing of the Prospectus under Rules 424(b) or 430A, and prior to the
termination of the offering of the Shares by the Underwriters.
(ii) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Tennessee, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement. Each of the subsidiaries of
the Company listed in Schedule II hereto (collectively, the "Subsidiaries") has
been duly organized and is validly existing as a corporation in good standing
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under the laws of the jurisdiction of its incorporation, with corporate power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement. The Subsidiaries are the only
subsidiaries, direct or indirect, of the Company. The Company and each of the
Subsidiaries are duly qualified to transact business in all jurisdictions in
which the conduct of their business requires such qualification, except where
the failure to be so qualified would not have a material adverse effect on the
Company and the Subsidiaries, taken as a whole. The outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable and are owned by the Company or
another Subsidiary free and clear of all liens, encumbrances and equities and
claims, except as described in the Registration Statement, the Prospectus or
those liens, encumbrances, equities and claims that do not materially affect the
value of such securities; and except as described in the Registration Statement
or the Prospectus, no options, warrants or other rights to purchase, agreements
or other obligations to issue or other rights to convert any obligations into
shares of capital stock or ownership interests in the Subsidiaries are
outstanding.
(iii) The outstanding shares of Common Stock of the Company, including
all shares to be sold by the Selling Shareholder and the Option Shareholder,
have been duly authorized and validly issued and are fully paid and
non-assessable; and no preemptive rights of stockholders exist with respect to
any of the Shares or the sale thereof. Neither the filing of the Registration
Statement nor the offering or sale of the Shares as contemplated by this
Agreement gives rise to any rights, other than those which have been waived or
satisfied, for or relating to the registration of any shares of Common Stock.
(iv) All of the Shares conform in all material respects to the
description thereof contained or incorporated by reference in the Registration
Statement. The form of certificates for the Shares conforms in all material
respects to the corporate law of the jurisdiction of the Company's
incorporation.
(v) The Commission has not issued an order preventing or suspending the
use of any Prospectus relating to the proposed offering of the Shares nor
instituted, to the knowledge of the Company, proceedings for that purpose. The
Registration Statement, when it was declared effective, the Prospectus, when it
is filed with the Commission pursuant to Rule 424(b) and any amendment or
supplement thereto, when it is filed with the Commission, contained or will
contain, all statements that are required to be stated therein by, and will
conform in all material respects to the requirements of the Act and the Rules
and Regulations. The documents incorporated by reference in the Prospectus, at
the time filed with the Commission, conformed in all material respects, to the
requirements of the Securities Exchange Act of 1934 (the "Exchange Act") or the
Act, as applicable, and the rules and regulations of the Commission thereunder.
When declared effective and as of the date hereof, the Registration Statement
and any amendment thereto did not contain, and does not contain, any untrue
statement of a material fact and did not omit, and does not omit, to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading. As of the date it is filed with the Commission pursuant
to Rule 424(b) and as of the date hereof, the Prospectus and any
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amendments and supplements thereto did not contain, and will not contain, any
untrue statement of material fact; and did not omit, and will not omit, to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to information
contained in or omitted from 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 or on behalf of the Selling
Shareholder, the Option Shareholder, or any Underwriter through the
Representatives, specifically for use in the preparation thereof.
(vi) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules as set forth in the
Registration Statement, present fairly the financial position and the results of
operations and cash flows of the Company and the consolidated Subsidiaries, at
the indicated dates and for the indicated periods. Such financial statements and
related schedules have been prepared in accordance with generally accepted
principles of accounting, consistently applied throughout the periods involved,
except as disclosed therein, and all adjustments necessary for a fair
presentation of results for such periods have been made. The summary financial
and statistical data included or incorporated by reference in the Registration
Statement presents fairly the information shown therein and such data has been
compiled on a basis consistent with the financial statements presented therein
and the books and records of the Company.
(vii) Ernst & Young LLP, who have certified certain of the financial
statements filed with the Commission as part of, or incorporated by reference
in, the Registration Statement, are independent public accountants as required
by the Act, the Exchange Act and the Rules and Regulations.
(viii) There is no action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of the
Subsidiaries before any court or administrative agency or otherwise that if
determined adversely to the Company or any of its Subsidiaries might result in
any material adverse change in the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company and of the Subsidiaries taken as a whole or to prevent the
consummation of the transactions contemplated hereby.
(ix) The Company and the Subsidiaries have good and marketable title to
all of the real and personal property reflected in the financial statements (or
as described in the Registration Statement or any document incorporated therein
by reference) hereinabove described, subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except those reflected in such financial
statements (or as described in the Registration Statement or any document
incorporated therein by reference) or which are not material in amount. The
Company and the Subsidiaries occupy their leased properties under valid and
binding leases conforming in all material respects to the description thereof
set forth in the Registration Statement or the documents incorporated therein by
reference.
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(x) The Company and the Subsidiaries have filed all Federal, state,
local and foreign income tax returns that have been required to be filed and
have paid all taxes indicated by said returns and all assessments received by
them or any of them to the extent that such taxes have become due and are not
being contested in good faith, except where the failure to file or pay would not
reasonably be expected to have a material adverse effect on the Company and the
Subsidiaries, taken as a whole. All tax liabilities have been adequately
provided for in the financial statements of the Company.
(xi) Since the respective dates as of which information is given in the
Registration Statement, as it may be amended or supplemented, there has not been
any material adverse change or any development involving a prospective material
adverse change in or affecting the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company and its Subsidiaries taken as a whole, whether or not occurring in
the ordinary course of business, and there has not been any material transaction
entered into or any material transaction that is probable of being entered into
by the Company or the Subsidiaries, other than transactions in the ordinary
course of business and changes and transactions described in the Registration
Statement, as it may be amended or supplemented. The Company and the
Subsidiaries have no material contingent obligations that are not disclosed in
the Company's financial statements that are included or incorporated by
reference in the Registration Statement.
(xii) Neither the Company nor any of the Subsidiaries is, or with the
giving of notice or lapse of time or both will be, in violation of or in default
under (A) its Charter, as amended or restated, or By-Laws, as amended or
restated, or (B) under any agreement, lease, contract, indenture or other
instrument or obligation to which it is a party or by which it, or any of its
properties, is bound and, solely with respect to this clause (B), which
violation or default would have a material adverse effect on the condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole or
the business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and the Subsidiaries taken
as a whole. The execution and delivery of this Agreement and the consummation of
the transactions herein contemplated and the fulfillment of the terms hereof
will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any material indenture, mortgage, deed of
trust or other agreement or instrument to which the Company or any Subsidiary is
a party, or of the Charter, as amended or restated, or By-Laws, as amended or
restated, of the Company or any order, rule or regulation applicable to the
Company or any Subsidiary of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction.
(xiii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the
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Commission or the National Association of Securities Dealers, Inc. (the "NASD"))
has been obtained or made and is in full force and effect.
(xiv) The Company and each of the Subsidiaries holds all material
licenses, certificates and permits from governmental authorities that are
necessary to the conduct of their businesses; and neither the Company nor any of
the Subsidiaries has infringed any patents, patent rights, trade names,
trademarks or copyrights, which infringement is material to the business of the
Company and the Subsidiaries taken as a whole. The Company knows of no material
infringement by others of patents, patent rights, trade names, trademarks or
copyrights owned by or licensed to the Company.
(xv) Neither the Company, nor to the Company's best knowledge, any of
its affiliates, has taken or will take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which would
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of Common Stock to facilitate the sale or resale of the
Shares. The Company acknowledges that the Underwriters may engage in passive
market making transactions in the Shares on The Nasdaq National Market in
accordance with Rule 103 under Regulation M of the Exchange Act.
(xvi) Neither the Company nor any Subsidiary is an "investment company"
within the meaning of such term under the Investment Company Act of 1940, as
amended (the "1940 Act") and the rules and regulations of the Commission
thereunder.
(xvii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xviii) The Company and each of its Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as management of the
Company believes is adequate for the conduct of their respective businesses and
the value of their respective properties and as is customary for companies
engaged in similar industries.
(xix) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from,
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any "pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Company would
have any liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, that would cause the loss of such qualification.
(xx) No labor disturbance by the employees of the Company or any
Subsidiary exists or, to the best of the Company's knowledge, is imminent and
the Company is not aware of any existing or imminent labor disturbances by the
employees of any of its or any Subsidiary's principal suppliers, manufacturers',
customers or contractors, which, in either case (individually or in the
aggregate), would have a material adverse effect on the Company and the
Subsidiaries, taken as a whole.
(xxi) The statistical, industry-related and market-related data
included in the Registration Statement and the Prospectus are based on or
derived from sources which the Company reasonably and in good faith believes are
reliable and accurate, and such data agree with the sources from which they are
derived.
(xxii) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission or other release of any kind of toxic
or other wastes or other hazardous substances by, due to, or caused by the
Company or any Subsidiary (or, to the Company's knowledge, any other entity for
whose acts or omissions the Company is or may be liable) upon any other property
now or previously owned or leased by the Company or any Subsidiary, or upon any
other property, which would be a violation of or give rise to any liability
under any applicable law, rule, regulation, order, judgment, decree or permit
relating to pollution or protection of human health and the environment
("Environmental Law"), except for violations and liabilities which, in either
case (individually or in the aggregate), would not reasonably be expected to
have a material adverse effect on the Company and the Subsidiaries, taken as a
whole. There has been no disposal, discharge, emission or other release of any
kind onto such property or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to which the
Company or any Subsidiary has knowledge, except as would not (individually or in
the aggregate) reasonably be expected to have a material adverse effect on the
Company and the Subsidiaries, taken as a whole. Neither the Company nor any
Subsidiary has agreed to assume, undertake or provide indemnification for any
liability of any other person under any Environmental Law, including any
obligation for cleanup or remedial action, except as (individually or in the
aggregate) would not reasonably be expected to have a material adverse effect on
the Company and the Subsidiaries, taken as a whole, or in connection with the
indemnification of landlords under leases of the Company's facilities entered
into in the ordinary course of business. There is no pending or, to the best of
the Company's knowledge, threatened administrative, regulatory or judicial
action, claim or notice of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the Company or any
Subsidiary, except for actions, claims or notices which (individually or in the
aggregate)
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would not reasonably be expected to have a material adverse effect on the
Company or the Subsidiaries, taken as a whole.
(xxiii) Neither the Company, any Subsidiary nor, to the Company's
knowledge, any of its executive officers has at any time during the last five
years (i) made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law, or (ii) made any
payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States of any jurisdiction
thereof.
(xxiv) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except as
required to be disclosed in the Registration Statement and the Prospectus. The
Company has not, in violation of the Xxxxxxxx-Xxxxx Act of 2002 (the
"Xxxxxxxx-Xxxxx Act"), directly or indirectly, including through a Subsidiary,
extended or maintained credit, arranged for the extension of credit, or renewed
an extension of credit, in the form of a personal loan to or for any director or
executive officer of the Company.
(xxv) Except as disclosed in the Registration Statement and the
Prospectus, there are no contracts, agreements or understandings between the
Company and any person that would give rise to a valid claim against the Company
or any Underwriter for a brokerage commission, finder's fee or other like
payment in connection with the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus or, to the Company's knowledge, any
arrangements, agreements, understandings, payments or issuance with respect to
the Company or any of its officers, directors, shareholders, partners,
employees, Subsidiaries or affiliates that may affect the Underwriters'
compensation as determined by the NASD.
(xxvi) The Company is in compliance in all material respects with
applicable provisions of the Xxxxxxxx-Xxxxx Act that are effective.
(xxvii) The Company has established and maintains "disclosure controls
and procedures" (as defined in Rules 13a-14(c) and 15d-14(c) of the Exchange
Act); the Company's "disclosure controls and procedures" are reasonably designed
to ensure that all information (both financial and non-financial) required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Rules and Regulations, and that all such information is
accumulated and communicated to the Company's management as appropriate to allow
timely decisions regarding required disclosure and to make the certifications of
the Chief Executive Officer and Chief Financial Officer of the Company required
under the Exchange Act with respect to such reports.
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(xxviii) Since the date of the filing of the Company's Annual Report on
Form 10-K for the year ended December 31, 2002, the Company's auditors and the
audit committee of the board of directors of the Company have not been advised
of (i) any significant deficiencies in the design or operation of internal
controls which could adversely affect the Company's ability to record, process,
summarize and report financial data nor any material weaknesses in internal
controls; (ii) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company's internal controls.
Since the date of the filing of the Company's Annual Report on Form 10-K for the
year ended December 31, 2002, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
(b) Each Seller, severally and not jointly, represents and warrants as
follows:
(i) Such Seller at the Closing Date (as such date is hereinafter
defined) will have good and marketable title to the Firm Shares or the Option
Shares, as the case may be, to be sold by such Seller, free and clear of any
liens, encumbrances, equities and claims, and full right, power and authority to
effect the sale and delivery of such Firm Shares or Option Shares, as the case
may be; and upon the delivery of, against payment for, such Firm Shares or
Option Shares, as the case may be, pursuant to this Agreement, the Underwriters
will acquire good and marketable title thereto, free and clear of any liens,
encumbrances, equities and claims.
(ii) Such Seller has full right, power and authority to execute and
deliver this Agreement and to perform its obligations under this Agreement, the
Power of Attorney and the Custodian Agreement referred to below. The execution
and delivery of this Agreement and the consummation by such Seller of the
transactions herein contemplated and the fulfillment by such Seller of the terms
hereof will not require any consent, approval, authorization, or other order of
any court, regulatory body, administrative agency or other governmental body
(except as may be required under the Act) and will not result in a breach of any
of the terms and provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust or other agreement or instrument to which
such Seller is a party, or of any order, rule or regulation applicable to such
Seller of any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction.
(iii) None of the Sellers has taken or will take, directly or
indirectly, any action designed to, or which has constituted, or which would
reasonably be expected to cause or result in the stabilization or manipulation
of the price of the Common Stock of the Company and, other than as permitted by
the Act, such Seller will not distribute any prospectus or other offering
material in connection with the offering of the Shares.
(iv) Without having undertaken to determine independently the accuracy
or completeness of the information contained or incorporated by reference in the
Registration Statement, such Seller is familiar with the Registration Statement
and has no knowledge of any material fact,
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condition or information not disclosed or incorporated by reference in the
Registration Statement that has adversely affected or will adversely affect the
business of the Company or any of the Subsidiaries taken as a whole; and the
sale of the Firm Shares or Option Shares, as the case may be, by such Seller
pursuant hereto is not prompted by any information concerning the Company or any
of the Subsidiaries that is not set forth in the Registration Statement or the
documents incorporated by reference therein. The information pertaining to such
Seller under the captions "Principal and Selling Shareholders" and
"Underwriting" in the Prospectus is complete and accurate in all material
respects.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Selling
Shareholder agrees to sell to the Underwriters and each Underwriter agrees,
severally and not jointly, to purchase, at a price of $_______ per share, the
number of Firm Shares set forth opposite the name of each Underwriter in
Schedule I hereof, subject to adjustments in accordance with Section 9 hereof.
(b) Certificates in negotiable form for the total number of the Shares
to be sold hereunder by the Selling Shareholder have been placed in custody with
[____________________] as custodian (the "Custodian") pursuant to the Custodian
Agreement and Power of Attorney executed by the Selling Shareholder for delivery
of all Firm Shares to be sold hereunder by the Selling Shareholder. The Selling
Shareholder specifically agrees that the Firm Shares represented by the
certificates held in custody for the Selling Shareholder under the Custody
Agreement and Power of Attorney are subject to the interests of the Underwriters
hereunder, that the arrangements made by the Selling Shareholder for such
custody are to that extent irrevocable, and that the obligations of the Selling
Shareholder hereunder shall not be terminable by any act or deed of the Selling
Shareholder (or by any other person, firm or corporation including the Company,
the Custodian or the Underwriters) or by operation of law (including the death
of a Selling Shareholder) or by the occurrence of any other event or events,
except as set forth in the Custody Agreement and Power of Attorney. If any such
event should occur prior to the delivery to the Underwriters of the Firm Shares
hereunder, certificates for the Firm Shares shall be delivered by the Custodian
in accordance with the terms and conditions of this Agreement as if such event
has not occurred. The Custodian is authorized to receive and acknowledge receipt
of the proceeds of sale of the Shares held by it against delivery of such
Shares.
(c) Payment for the Firm Shares to be sold hereunder is to be made in
same day funds via wire transfer to the order of [____________________________]
as Custodian for the Selling Shareholder, for the shares to be sold by the
Selling Shareholder, in each case against delivery of the Firm Shares to the
Representatives through the facilities of The Depository Trust Company for the
several accounts of the Underwriters. Such payment and delivery are to be made
at the offices of Xxxxx Xxxxxxx LLP, 0000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
00000, at 10:00 a.m., New York City time, on the third business day after the
date of this Agreement or at such other time and date not later than five
business days thereafter as you
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and the Company shall agree upon, such time and date being herein referred to as
the "Closing Date." As used herein, "business day" means a day on which the New
York Stock Exchange is open for trading and on which banks in New York are open
for business and not permitted by law or executive order to be closed.
(d) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Option Shareholder hereby grants an option to the several Underwriters to
purchase the Option Shares at the price per share as set forth in the first
paragraph of this Section 2. The option granted hereby may be exercised in whole
or in part by giving written notice (i) at any time before the Closing Date and
(ii) only once thereafter within 30 days after the date of this Agreement, by
you, as Representatives of the several Underwriters, to the Company and the
Option Shareholder setting forth the number of Option Shares as to which the
several Underwriters are exercising the option, the names and denominations in
which the Option Shares are to be registered and the time and date at which such
certificates are to be delivered. The time and date at which certificates for
Option Shares are to be delivered shall be determined by the Representatives but
shall not be earlier than three nor later than 10 full business days after the
exercise of such option, nor in any event prior to the Closing Date (such time
and date being herein referred to as the "Option Closing Date"). If the date of
exercise of the option is three or more days before the Closing Date, the notice
of exercise shall set the Closing Date as the Option Closing Date. The number of
Option Shares to be purchased by each Underwriter shall be in the same
proportion to the total number of Option Shares being purchased as the number of
Firm Shares being purchased by such Underwriter bears to the total number of
Firm Shares, adjusted by you in such manner as to avoid fractional shares. The
option with respect to the Option Shares granted hereunder may be exercised only
to cover over-allotments in the sale of the Firm Shares by the Underwriters.
You, as Representatives of the several Underwriters, may cancel such option at
any time prior to its expiration by giving written notice of such cancellation
to the Company and the Option Shareholder. To the extent, if any, that the
option is exercised, payment for the Option Shares shall be made on the Option
Closing Date in same day funds via wire transfer to the order of Bass, Xxxxx &
Xxxx PLC, as Custodian for the Option Shareholder, against delivery of the
Option Shares to the Representatives through the facilities of The Depository
Trust Company for the several accounts of the Underwriters at the offices of
Xxxxx Xxxxxxx LLP, 0000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, at 10:00 a.m.,
New York City time.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a public
offering of the Firm Shares as soon as the Representatives deem it advisable to
do so. The Firm Shares are to be initially offered to the public at the initial
public offering price set forth in the Prospectus. The Representatives may from
time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased pursuant
to Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
-11-
It is further understood that you will act as the Representatives for
the Underwriters in the offering and sale of the Shares in accordance with a
Master Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. COVENANTS OF THE COMPANY, THE SELLING SHAREHOLDER AND THE OPTION
SHAREHOLDER.
(a) The Company covenants and agrees with the several Underwriters
that:
(i) The Company will (A) use its reasonable best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule 430A of
the Rules and Regulations is followed, to prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations a Prospectus in a form
approved by the Representatives containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rule 430A of
the Rules and Regulations, (B) not file any amendment to the Registration
Statement or supplement to the Prospectus or document incorporated by reference
therein of which the Representatives shall not previously have been advised and
furnished with a copy or to which the Representatives shall have reasonably
objected in writing or that is not in compliance in all material respects with
the Rules and Regulations and (C) file on a timely basis all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission subsequent to the date of the Prospectus and prior to the
termination of the offering of the Shares by the Underwriters.
(ii) The Company will advise the Representatives promptly (A) when the
Registration Statement or any post-effective amendment thereto shall have become
effective, (B) of receipt of any comments from the Commission, (C) of any
request of the Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information and (D) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the use of the Prospectus or of the institution of any
proceedings for that purpose. The Company will use its reasonable best efforts
to prevent the issuance of any such stop order preventing or suspending the use
of the Prospectus and to obtain as soon as possible the lifting thereof, if
issued.
(iii) The Company will cooperate with the Representatives in
endeavoring to qualify or exempt the Shares for sale under the securities laws
of such jurisdictions as the Representatives may reasonably have designated in
writing and will make such applications, file such documents and furnish such
information as may be reasonably required for that purpose, provided the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is not now so
qualified or required to file such a consent. The Company will, from time to
time, prepare and file such statements, reports, and other documents, as are or
may be required to continue such qualifications or exemptions in effect for so
long a period as the Representatives may reasonably request for distribution of
the Shares.
-12-
(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary Prospectus
as the Representatives may reasonably request. The Company will deliver to, or
upon the order of, the Representatives during the period when delivery of a
Prospectus is required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the Representatives may
reasonably request. The Company will deliver to the Representatives at or before
the Closing Date, four (4) signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will deliver to
the Representatives such number of copies of the Registration Statement
(including such number of copies of the exhibits filed therewith that may
reasonably be requested), including documents incorporated by reference therein,
and of all amendments thereto, as the Representatives may reasonably request.
(v) The Company will comply with the Act and the Rules and Regulations,
and the Exchange Act, and the rules and regulations of the Commission
thereunder, so as to permit the completion of the distribution of the Shares as
contemplated in this Agreement and the Prospectus. If during the period in which
a prospectus is required by law to be delivered by an Underwriter or dealer, any
event shall occur as a result of which, in the judgment of the Company, it
becomes necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading, or, if it is necessary
at any time to amend or supplement the Prospectus to comply with any law, the
Company promptly will either (i) prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement to the
Prospectus or (ii) prepare and file with the Commission an appropriate filing
under the Exchange Act that shall be incorporated by reference in the Prospectus
so that the Prospectus as so amended or supplemented will not, in the light of
the circumstances existing when it is so delivered, be misleading, or so that
the Prospectus will comply with the law.
(vi) The Company will make generally available to its security holders,
as soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earnings statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earnings statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 of the Rules and Regulations and will advise you
in writing when such statement has been so made available.
(vii) The Company will, for a period of five years from the Closing
Date, deliver to the Representatives copies of annual reports and copies of all
other documents, reports and information furnished by the Company to its
shareholders or filed with any securities exchange pursuant to the requirements
of such exchange or with the Commission pursuant to the Act or the Exchange Act.
The Company will deliver to the Representatives similar reports with respect to
significant subsidiaries, as that term is defined in the Rules and Regulations,
that are not consolidated in the Company's financial statements.
-13-
(viii) During the period of 90 days from the date of the Prospectus,
without the prior written consent of Bear, Xxxxxxx & Co. Inc. and Deutsche Bank
Securities Inc., the Company (A) will not, directly or indirectly, issue, offer,
sell, agree to issue, offer or sell, solicit offers to purchase, grant any call
option, warrant or other right to purchase, purchase any put option or other
right to sell, pledge, borrow or otherwise dispose of any Relevant Security, or
make any announcement of any of the foregoing, (B) will not establish or
increase any "put equivalent position" or liquidate or decrease any "call
equivalent position" (in each case within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder) with respect
to any Common Stock, any other equity security of the Company or any of its
subsidiaries and any security convertible into, or exercisable or exchangeable
for, any Common Stock or other such equity security (each, a "Relevant
Security") and (C) will not otherwise enter into any swap, derivative or other
transaction or arrangement that transfers to another, in whole or in part, any
economic consequence of ownership of a Relevant Security, whether or not such
transaction is to be settled by delivery of a Relevant Security, other
securities, cash or other consideration; provided, however, that the foregoing
shall not prohibit the Company's issuance of Common Stock (1) upon the
conversion or exchange of convertible or exchangeable securities outstanding on
the date hereof; (2) upon the exercise of currently outstanding options; (3)
upon the grant and exercise of options under, or the issuance and sale of shares
pursuant to, employee stock option or stock purchase plans in effect on the date
hereof, each as described in the Registration Statement and the Prospectus and
(4) as consideration (in an amount not to exceed $60,000,000 in the aggregate)
for the Company's acquisition of businesses. The Company will not file a
registration statement under the Securities Act in connection with any
transaction by the Company or any person, except for registration statements on
Form S-8 relating to employee benefit plans or Form S-4 relating to corporate
reorganizations or other transactions under Rule 145.
(ix) The Company will obtain an undertaking in substantially the form
of Annex I hereto of each of its officers and directors and each Seller.
(x) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, a registrar for the Common
Stock.
(xi) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or would reasonably be
expected to constitute, the stabilization or manipulation of the price of any
securities of the Company.
(xii) The Company consents to the use and delivery of the Preliminary
Prospectus by the Underwriters in accordance with Rule 430 and Section 5(b) of
the Securities Act.
(xiii) The Company will actively take steps to ensure that it will be
in compliance in all material respects with the applicable provisions of the
Xxxxxxxx-Xxxxx Act upon the effectiveness of such provisions.
-14-
(b) Each Seller, severally and not jointly, covenants and agrees with
the several Underwriters that:
(i) Such Seller will enter into an undertaking in substantially the
form of Annex I hereto.
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 and the Interest and Dividend Tax Compliance Act of 1983 with
respect to the transactions herein contemplated, each Seller agrees to deliver
to you prior to or at the Closing Date 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).
(iii) The Seller will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or would reasonably be
expected to constitute, the stabilization or manipulation of the price of any
securities of the Company.
5. COSTS AND EXPENSES.
Whether or not the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus are consummated or this Agreement is
terminated, the Company hereby agrees to pay for two-thirds and the Selling
Shareholder will pay for one-third of the costs and expenses incident to the
performance of their obligations listed below: (a) all expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and any and all amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (b) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Shares under the Securities Act and the Offering; (c) the filing fees incident
to, and the fees and disbursements of counsel for the Underwriters in connection
with, securing any required review by the NASD of the terms of the Offering; and
(d) all fees and expenses in connection with listing the Shares on The Nasdaq
National Market, if any. The Sellers shall be responsible on a pro rata basis
for (i) all underwriters' discounts and commissions; (ii) any transfer taxes
imposed on the sale of the Shares to the several Underwriters will be paid by
the Sellers pro rata; (iii) the cost of producing a blue sky survey, closing
documents and other instruments, agreements or documents (including any
compilations thereof) in connection with the Offering; (iv) all expenses in
connection with the qualification of the Shares for offering and sale under
state or foreign securities or blue sky laws as provided in Section 4(a)(iii)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with any blue sky survey;
(v) all travel expenses of the Company's officers and employees and any other
expense of the Company incurred in connection with attending or hosting meetings
with prospective purchasers of the Shares; and (iv) all other costs and expenses
incident to the performance of the obligations hereunder which are not otherwise
specifically provided for in this Section 5. To the extent, if at all, that the
Selling Shareholder or the Option Shareholder engages special legal counsel to
represent him or it in
-15-
connection with this offering, the fees and expenses of such counsel shall be
borne by the Selling Shareholder or Option Shareholder, as applicable. The
Company also will pay or cause to be paid: (i) the cost of preparing stock
certificates representing the Shares; and (ii) the cost and charges of any
transfer agent or registrar for the Shares. 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 in connection with producing this Agreement, and any stock
transfer taxes on resale of any of the Shares by them. The Company and the
Sellers shall not, however, be required to pay for any of the Underwriters'
expenses (other than those related to qualification under the NASD's
regulations), except that, if this Agreement shall not be consummated because
the conditions in Section 6 hereof are not satisfied, or because this Agreement
is terminated by the Representatives pursuant to Section 11 hereof, or by reason
of any failure, refusal or inability on the part of the Company or the Sellers
to perform any undertaking or satisfy any condition of this Agreement or to
comply with any of the terms hereof on their part to be performed, unless such
failure to satisfy said condition or to comply with said terms be due to the
default or omission of any Underwriter, then the Sellers shall reimburse the
several Underwriters for their reasonable out-of-pocket expenses, including fees
and disbursements of counsel, reasonably incurred in connection with
investigating, marketing and proposing to market the Shares or in contemplation
of performing their obligations hereunder; but the Company and the Sellers shall
not in any event be liable to any of the several Underwriters for damages on
account of loss of anticipated profits from the sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the Firm Shares
on the Closing Date and the Option Shares, if any, on the Option Closing Date
are subject to the accuracy in all material respects, as of the Closing Date or
the Option Closing Date, as the case may be, of the representations and
warranties of the Company and each Seller contained herein, and to the
performance by the Company and each Seller of their covenants and obligations
hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule 424
and Rule 430A of the Rules and Regulations shall have been made, and any request
of the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall have been taken or,
to the knowledge of the Company or any Seller, shall be contemplated by the
Commission and no injunction, restraining order, or order of any nature by a
Federal or state court of competent jurisdiction shall have been issued as of
the Closing Date that would prevent the issuance of the Shares.
-16-
(b) (1) The Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, the opinion of Bass, Xxxxx & Xxxx
PLC, counsel for the Company, dated the Closing Date or the Option Closing Date,
as the case may be, addressed to the Underwriters (and stating that such opinion
may be relied upon by counsel to the Underwriters) to the effect that:
(i) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Tennessee, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement; each of the Subsidiaries
has been duly organized 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 or lease its properties and conduct its business as
described in the Registration Statement; the Company and each of the
Subsidiaries are duly qualified to transact business in all jurisdictions in
which the conduct of their business requires such qualification, or in which the
failure to qualify would have a materially adverse effect upon the business of
the Company and the Subsidiaries taken as a whole; and the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable and are owned by the Company or a
Subsidiary; and, to the best of such counsel's knowledge, the outstanding shares
of capital stock of each of the Subsidiaries is owned free and clear of all
perfected liens, encumbrances, equities and claims, and no options, warrants or
other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligations into any shares of capital stock or of
ownership interests in the Subsidiaries are outstanding.
(ii) As of the date specified therein, the Company had authorized and
outstanding capital stock as set forth or incorporated by reference in the
Prospectus; the authorized shares of the Company's Common Stock have been duly
authorized; the outstanding shares of the Company's Common Stock, including the
Shares to be sold by the Option Shareholder, have been duly authorized and
validly issued and are fully paid and non-assessable; all of the Shares conform
in all material respects to the description thereof contained or incorporated by
reference in the Prospectus; the certificates for the Shares, assuming they are
in the form filed with the Commission, are in due and proper form; and no
preemptive rights of shareholders exist with respect to any of the Shares or the
sale thereof.
(iii) Except as described in or contemplated by the Prospectus, to the
knowledge of such counsel, there are no outstanding securities of the Company
convertible or exchangeable into or evidencing the right to purchase or
subscribe for any shares of capital stock of the Company and there are no
outstanding or authorized options, warrants or rights of any character
obligating the Company to issue any shares of its capital stock or any
securities convertible or exchangeable into or evidencing the right to purchase
or subscribe for any shares of such stock; and except as described in the
Prospectus, to the knowledge of such counsel, no holder of any securities of the
Company or any other person has the right, contractual or otherwise, that has
not been satisfied or effectively waived, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of, any of the
Shares or the right to have any Common Stock or other
-17-
securities of the Company included in the Registration Statement or the right,
as a result of the filing of the Registration Statement, to require registration
under the Act of any shares of Common Stock or other securities of the Company.
(iv) The Registration Statement has become effective under the Act,
and, to the best of the knowledge of such counsel, no stop order proceedings
with respect thereto have been instituted or are pending or threatened under the
Act.
(v) The Registration Statement, the Prospectus and each amendment or
supplement thereto and document incorporated by reference therein, as of their
respective effective or filing dates, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as applicable,
and the applicable rules and regulations thereunder (except that such counsel
need express no opinion as to the financial statements and related schedules
included or incorporated by reference therein). The conditions for the use of
Form S-3, set forth in the General Instructions thereto, have been satisfied.
(vi) Such counsel does not know of any contracts or documents required
to be filed as exhibits to or incorporated by reference in the Registration
Statement or described in the Registration Statement or the Prospectus that are
not so filed, incorporated by reference or described as required, and such
contracts and documents as are summarized in the Registration Statement or the
Prospectus are accurately summarized in all material respects.
(vii) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the Subsidiaries
except as set forth or incorporated by reference in the Prospectus.
(viii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, the Charter or By-Laws of the Company, as amended or
restated, or any material agreement or instrument known to such counsel to which
the Company or any of the Subsidiaries is a party or by which the Company or any
of the Subsidiaries may be bound.
(ix) This Agreement has been duly authorized, executed and delivered by
the Company.
(x) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body is necessary in connection with the execution and delivery of
this Agreement and the consummation of the transactions herein contemplated
(other than as may be required by the Commission or the NASD), except such as
have been obtained or made.
(xi) The Company is not required to register as an investment company
under the 1940 Act.
-18-
In rendering such opinion, such counsel may rely as to matters governed
by the laws of states other than Tennessee, Delaware or Federal laws on the
legal opinions of local counsel in such jurisdictions and as to certain matters
on the legal opinion and/or factual certifications of Xxxxxxx X. Xxxxxx, Esq.,
General Counsel of the Company; provided that in each case Bass, Xxxxx & Xxxx
PLC shall state that they believe that they and the Underwriters are justified
in relying on such other legal opinions and certificates. In addition to the
matters set forth above, the opinion of Bass, Xxxxx & Xxxx PLC shall also
include a statement to the effect that nothing has come to the attention of such
counsel which leads them to believe that (i) the Registration Statement, at the
time it became effective under the Act (but after giving effect to any
modifications incorporated therein pursuant to Rule 430A under the Act) and as
of the Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and (ii) the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the Rules and Regulations and as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they are made, not
misleading (except that such counsel need express no view as to financial
statements, financial schedules or statistical information therein). With
respect to such statement, Bass, Xxxxx & Xxxx PLC may state that their belief is
based upon the procedures set forth therein, but is without independent check
and verification.
(2) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Hunter, Xxxxx & Xxxxx,
LLP, counsel for the Selling Shareholder, dated the Closing Date or the Option
Closing Date, as the case may be, addressed to the Underwriters (and stating
that such opinion may be relied upon by counsel to the Underwriters) to the
effect that:
(i) The Custodian Agreement and Power of Attorney have each been duly
authorized, executed and delivered by or on behalf of the Selling Shareholder.
Upon proper execution and delivery of this Agreement by one of the
Attorneys-in-Fact named in the Power of Attorney, this Agreement will have been
duly authorized, executed and delivered on behalf of the Selling Shareholder.
(ii) To the knowledge of such counsel, the Selling Shareholder has full
legal right, power and authority, and any approval required by law, to sell,
assign, transfer and deliver the portion of the Shares to be sold by the Selling
Shareholder.
(iii) The Underwriters (assuming that they are bona fide purchasers
within the meaning of the Uniform Commercial Code) have acquired good and
marketable title to the Shares being sold by the Selling Shareholder on the
Closing Date, as the case may be, free and clear of all liens, encumbrances,
equities and claims.
-19-
In rendering such opinion, Hunter, Xxxxx & Xxxxx, LLP may rely upon the
opinion of Bass, Xxxxx & Xxxx, PLC (referenced in Section 6(b)(1)) that (i) the
Company has been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Tennessee, (ii) the Company has
authorized and outstanding stock as set forth or incorporated by reference in
the Prospectus and the authorized shares of the Company's Common Stock have been
duly authorized, and (iii) the outstanding shares of the Company's Common Stock
have been duly authorized and validly issued and are fully paid and
non-assessable. Further, in rendering such opinion, Hunter, Xxxxx & Xxxxx, LLP
may rely upon the certificate of the Selling Shareholder that he is sole owner
of the Firm Shares and that no other person or entity has any legal or equitable
interest in the Firm Shares or any portion thereof.
(3) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Woolf, McClane, Xxxxxx,
Xxxxx & Xxxxxxxxx, PLLC, counsel for the Option Shareholder, dated the Closing
Date or the Option Closing Date, as the case may be, addressed to the
Underwriters (and stating that such opinion may be relied upon by counsel to the
Underwriters) to the effect that:
(i) The Custodian Agreement and Power of Attorney have each been duly
authorized, executed and delivered by or on behalf of the Option Shareholder.
Upon proper execution and delivery of this Agreement by one of the
Attorneys-in-Fact named in the Power of Attorney, this Agreement will have been
duly authorized, executed and delivered on behalf of the Option Shareholder.
(ii) To the knowledge of such counsel, the Option Shareholder has full
legal right, power and authority, and any approval required by law, to sell,
assign, transfer and deliver the portion of the Shares to be sold by the Option
Shareholder.
(iii) The Underwriters (assuming that they are bona fide purchasers
within the meaning of the Uniform Commercial Code) have acquired good and
marketable title to the Shares being sold by the Option Shareholder on the
Option Closing Date, as the case may be, free and clear of all liens,
encumbrances, equities and claims.
(c) The Representatives shall have received from Xxxxx Xxxxxxx LLP,
counsel for the Underwriters, an opinion dated the Closing Date or the Option
Closing Date, as the case may be, substantially to the effect specified in
subparagraphs (ii), (iii), (iv), (ix) and (xii) of Paragraph (b)(1) of this
Section 6, and that the Company is a duly organized and validly existing
corporation under the laws of the State of Tennessee. In rendering such opinion,
Xxxxx Xxxxxxx LLP may rely as to all matters governed other than by the laws of
Maryland or Delaware or Federal laws on the opinion of counsel referred to in
Paragraph (b)(1) of this Section 6. In addition to the matters set forth above,
such opinion shall also include a statement to the effect that nothing has come
to the attention of such counsel that leads them to believe that (i) the
Registration Statement, or any amendment thereto, as of the time it became
effective under the Act (but after giving effect to any modifications
incorporated therein pursuant to Rule 430A
-20-
under the Act) as of the Closing Date or the Option Closing Date, as the case
may be, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (ii) the Prospectus, or any supplement thereto, on
the date it was filed pursuant to the Rules and Regulations and as of the
Closing Date or the Option Closing Date, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact, necessary in
order to make the statements, in the light of the circumstances under which they
are made, not misleading (except that such counsel need express no view as to
financial statements, financial schedules or statistical information therein).
With respect to such statement, Xxxxx Xxxxxxx LLP may state that their belief is
based upon the procedures set forth therein, but is without independent check
and verification.
(d) You shall have received, on each of the date hereof, the Closing
Date or the Option Closing Date, as the case may be, a letter dated the date
hereof, the Closing Date or the Option Closing Date, as the case may be, in form
and substance satisfactory to you, of Ernst & Young LLP confirming that they are
independent public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating that in their opinion the
financial statements and schedules examined by them and included in the
Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Act and the related published Rules
and Regulations; and containing such other statements and information as is
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial and statistical
information contained in the Registration Statement and Prospectus.
(e) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
Chief Executive Officer and the Chief Financial Officer of the Company to the
effect that, as of the Closing Date or the Option Closing Date, as the case may
be, each of them severally represents as follows:
(i) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceedings for such purpose have been taken or are, to
his knowledge, contemplated by the Commission;
(ii) The representations and warranties of the Company
contained in Section 1 hereof are true and correct in all respects as of the
Closing Date or the Option Closing Date, as the case may be;
(iii) All filings required to have been made pursuant to Rules
424 or 430A under the Act have been made;
(iv) He has carefully examined the Registration Statement and
the Prospectus and, in his opinion, as of the effective date of the Registration
Statement and the date the Prospectus was filed with the Commission pursuant to
Rule 424(b), the Registration Statement
-21-
and the Prospectus, respectively, did not contain an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, and since the
effective date of the Registration Statement, no event has occurred that should
have been set forth in a supplement to or an amendment of the Prospectus that
has not been so set forth in such supplement or amendment; and
(v) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been any
material adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of the
Company and its Subsidiaries taken as a whole or the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and the Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business.
(f) The Company and each Seller shall have furnished to the
Representatives such further certificates and documents confirming the
representations and warranties, covenants and conditions contained herein and
related matters as the Representatives may reasonably have requested.
(g) You shall have received a duly executed lock-up agreement from each
person who is a director or officer of the Company and each Seller, in each case
substantially in the form attached hereto as Annex I and each such agreement
shall be in full force and effect.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects reasonably satisfactory to the Representatives and to Xxxxx
Xxxxxxx LLP, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Representatives by notifying the Company and each Seller of such termination
in writing at or prior to the Closing Date or the Option Closing Date, as the
case may be.
In such event, the Selling Shareholder, the Option Shareholder, the
Company and the Underwriters shall not be under any obligation to each other
(except to the extent provided in Sections 5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE SELLERS.
The obligations of the Sellers to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date or the Option Closing Date,
as the case may be, no stop order suspending the
-22-
effectiveness of the Registration Statement shall have been issued and in effect
or proceedings therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company and the Selling Shareholder severally and not jointly
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of the Act, against any losses,
claims, damages or liabilities to which such Underwriter or any such controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto or
(ii) the omission or alleged omission to state in the Registration Statement, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they were made; and
will reimburse each Underwriter and each such controlling person upon demand for
any legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage or liability, action or proceeding or in responding to a subpoena
or governmental inquiry related to the offering of the Shares, whether or not
such Underwriter or controlling person is a party to any action or proceeding;
provided, however, that the Company and the Selling Shareholder will not be
liable in any such case to the extent but only 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 the
Registration Statement, any Preliminary Prospectus, the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for use in the preparation thereof. The foregoing indemnity
agreement with respect to any Preliminary Prospectus or the Prospectus shall not
inure to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
amended or supplemented) would have cured the defect giving rise to such loss,
claim, damage or liability. In no event, however, shall the liability of the
Selling Shareholder for indemnification under this Section 8(a) exceed the
lesser of (i) that proportion of the total of such losses, claims, damages or
liabilities indemnified against equal to the proportion of the total Shares sold
hereunder that is being sold by the Selling Shareholder, or (ii) the proceeds
received by the Selling Shareholder from the Underwriters in the offering. This
indemnity agreement will
-23-
be in addition to any liability which the Company and the Selling Shareholder
may otherwise have.
(b) The Option Shareholder agrees to indemnify the Underwriters and
each person, if any, who controls any Underwriter within the meaning of the Act,
against any losses, claims, damages or liabilities to which such Underwriter or
controlling person may become subject under the Act or otherwise, insofar as
such losses, claims, damages and liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact concerning the Option Shareholder
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or (ii) the omission or
alleged omission to state in the Registration Statement, as originally filed or
any amendment thereof, or any related Preliminary Prospectus or the Prospectus,
or in any supplement thereto or amendment thereof, a material fact concerning
the Option Shareholder required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made; and will reimburse each Underwriter and each such controlling person
upon demand for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage or liability, action or proceeding or in
responding to a subpoena or governmental inquiry related to the offering of the
Shares, whether or not such Underwriter or controlling person is a party to any
action or proceeding; provided, however, that the Option Shareholder will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement, or omission or alleged omission made in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through the Representatives specifically for use in the
preparation thereof. The foregoing indemnity agreement with respect to any
Preliminary Prospectus or the Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased Shares, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage or liability. In
no event, however, shall the liability of the Option Shareholder for
indemnification under this Section 8(b) exceed the proceeds received by the
Option Shareholder from the Underwriters in the offering. This indemnity
obligation will be in addition to any liability which the Option Shareholder may
otherwise have.
(c) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, the Selling Shareholder, the Option
Shareholder and each person, if any, who controls the
-24-
Company within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer, the Selling
Shareholder, Option Shareholder or controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or (ii) 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 light of the circumstances under which
they were made; and will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, the Selling Shareholder,
Option Shareholder or controlling person upon demand for any legal or other
expenses reasonably incurred by the Company or any such director, officer,
Option Shareholder or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding or in
responding to a subpoena or governmental inquiry relating to the offering of the
Shares, whether or not the Company or any such director, officer, the Selling
Shareholder, Option Shareholder or controlling person is a party to any action
or proceeding; provided, however, that each Underwriter will be liable in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability that such Underwriter may otherwise have.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 8, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
8(a), (b) or (c) shall be available to any party who shall fail to give notice
as provided in this Section 8(d) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability that it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 8(a), (b) or (c). In case
any such proceeding 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 shall pay as incurred the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred (or within 30 days of
presentation) the fees and expenses of the counsel retained by the indemnified
party in
-25-
the event (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel, (ii) the named parties to any
such proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them or (iii) the indemnifying party shall have failed to assume the
defense and employ counsel reasonably acceptable to the indemnified party within
a reasonable period of time after notice of commencement of the action. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by you in the case
of parties indemnified pursuant to Section 8(a) or (b) and by the Company and
the Option Shareholder in the case of parties indemnified pursuant to Section
8(c). The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings 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 or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company, the
Selling Shareholder and the Option Shareholder on the one hand and the
Underwriters on the other hand 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, the Selling Shareholder and the Option Shareholder on the one hand and
the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, (or
actions or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Selling Shareholder and the Option Shareholder on the one hand and the
Underwriters on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company, the Selling Shareholder and the Option Shareholder bear to the
total underwriting discounts and
-26-
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Selling Shareholder or the
Option Shareholder on the one hand or the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Selling Shareholder, the Option Shareholder and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 8(e) 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 that does not take account of the equitable considerations
referred to above in this Section 8(e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to above in this Section
8(e) 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 (e), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter, (ii) 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 and (iii) the
Selling Shareholder or the Option Shareholder shall not be required to
contribute any amount in excess of the lesser of (A) that proportion of the
total of such losses, claims, damages or liabilities indemnified or contributed
against equal to the proportion of the total Shares sold hereunder that are
being sold by the Selling Shareholder or the Option Shareholder or (B) the
proceeds received by the Selling Shareholder or the Option Shareholder from the
Underwriters in the offering. The Underwriters' obligations in this Section 8(e)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative
-27-
and in full force and effect, regardless of (i) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter, the
Company, its directors or officers or any persons controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder and (iii) any
termination of this Agreement. A successor to any Underwriter, or to the
Company, the Selling Shareholder, the Option Shareholder, its directors or
officers, or any person controlling the Company, shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 8.
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case may be,
any Underwriter shall fail to purchase and pay for the portion of the Shares
that such Underwriter has agreed to purchase and pay for on such date (otherwise
than by reason of any default on the part of the Company, the Selling
Shareholder or the Option Shareholder), you, as Representatives of the
Underwriters, shall use your reasonable efforts to procure within 36 hours
thereafter one or more of the other Underwriters, or any others, to purchase
from the Company, each Selling Shareholder and the Option Shareholder such
amounts as may be agreed upon and upon the terms set forth herein, the Firm
Shares or Option Shares, as the case may be, that the defaulting Underwriter or
Underwriters failed to purchase. If during such 36 hours you, as such
Representatives, shall not have procured such other Underwriters, or any others,
to purchase the Firm Shares or Option Shares, as the case may be, agreed to be
purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of shares with respect to which such default shall occur does
not exceed 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the other Underwriters shall be obligated, severally, in proportion to
the respective numbers of Firm Shares or Option Shares, as the case may be, that
they are obligated to purchase hereunder, to purchase the Firm Shares or Option
Shares, as the case may be, that such defaulting Underwriter or Underwriters
failed to purchase or (b) if the aggregate number of Firm Shares or Option
Shares, as the case may be, with respect to which such default shall occur
exceeds 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the Company, the Selling Shareholder and the Option Shareholder or you
as the Representatives of the Underwriters will have the right, by written
notice given within the next 36-hour period to the parties to this Agreement, to
terminate this Agreement without liability on the part of the non-defaulting
Underwriters or of the Company or of the Selling Shareholder or of the Option
Shareholder except to the extent provided in Section 8 hereof. In the event of a
default by any Underwriter or Underwriters, as set forth in this Section 9, the
Closing Date or Option Closing Date, as the case may be, may be postponed for
such period, not exceeding seven days, as you, as Representatives, may determine
in order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 9 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
10. NOTICES.
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All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or telegraphed
and confirmed as follows: if to the Underwriters, to Bear, Xxxxxxx & Co. Inc.,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxxx, Senior
Managing Director, Equity Capital Markets, and to Deutsche Bank Securities Inc.,
00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Manager,
with a copy to Deutsche Bank Securities Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: General Counsel, and to Xxxxx Xxxxxxx LLP, 0000 Xxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx, Esq.; if to
the Company or any Seller, to Forward Air Corporation, 000 Xxxxxxx Xxxx,
Xxxxxxxxxxx, XX 00000 Attention: Xxxxxxx X. Xxxxxx, Senior Vice President and
General Counsel; with a copy to Bass, Xxxxx & Xxxx PLC, 000 Xxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxxxx, XX 00000, Attention: Xxxxx Xxxxxx, Esq., Woolf, McClane,
Xxxxxx, Xxxxx & Xxxxxxxxx, PLLC, 000 Xxxxx Xxx Xxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxxx 00000, Attention: Xxxxxx XxXxxxx, Esq., and Hunter, Xxxxx & Xxxxx,
LLP, 0000 Xxxxx Xxxxxxx Xxxx, X.X. Xxx 0000, Xxxxxxxxx, XX 00000, Attention:
Xxxxxxx X. Xxxxxxxxx.
11. TERMINATION.
This Agreement may be terminated by you by notice to the Company and
the Sellers as follows:
(a) at any time prior to the earlier of (i) the time the Shares are
released by you for sale by notice to the Underwriters or (ii) 11:30 a.m. on the
date of this Agreement;
(b) at any time prior to the Closing Date or any Option Closing Date
(if different from the Closing Date and then only as to the Option Shares) if
any of the following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of the
Company and its Subsidiaries taken as a whole or the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business; (ii) any domestic or
international event or act or occurrence has materially disrupted, or in your
opinion, will in the immediate future materially disrupt, the market for the
Company's securities or securities in general; (iii) (A) there shall have
occurred any outbreak or escalation of hostilities or acts of terrorism
involving the United States or there is a declaration of war or national
emergency by the United States or (B) there shall have been any other calamity
or crisis or any change in political, financial or economic conditions if the
effect of any such event in (A) or (B), in the your judgment, makes it
impracticable or inadvisable to proceed with the offering, sale and delivery of
the Firm Shares or the Option Shares, as the case may be, on the terms and in
the manner contemplated by the Prospectus; (iv) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the NASD, the Chicago
Board of Options Exchange, the Chicago
-29-
Mercantile Exchange or the Chicago Board of Trade or by order of the Commission
or any other governmental authority having jurisdiction; (v) the enactment,
publication, decree or other promulgation of any statute, regulation, rule or
order of any court or other governmental authority which in your opinion
materially and adversely affects or may materially and adversely affect the
business or operations of the Company; (vi) a banking moratorium has been
declared by any state or federal authority or if any material disruption in
commercial banking or securities settlement or clearance services shall have
occurred; (vii) any downgrading in the rating of the Company's debt securities
by any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Exchange Act); (viii) the suspension of
trading of the Company's Common Stock on The Nasdaq National Market; or (ix) the
taking of any action by any governmental body or agency in respect of its
monetary or fiscal affairs that in your reasonable opinion has a material
adverse effect on the securities markets in the United States or would make it
impracticable to market the Shares or to enforce contracts for the sale of the
Shares; or
(c) as provided in Sections 6 and 9 of this Agreement.
12. SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Company, the Selling Shareholder and the Option Shareholder
and their respective successors, executors, administrators, heirs and assigns,
and the officers, directors and controlling persons referred to herein, and no
other person will have any right or obligation hereunder. No purchaser of any of
the Shares from any Underwriter shall be deemed a successor or assign merely
because of such purchase.
13. INFORMATION PROVIDED BY UNDERWRITERS.
The Company, the Selling Shareholder, the Option Shareholder and the
Underwriters acknowledge and agree that the only information furnished or to be
furnished by any Underwriter to the Company for inclusion in any Prospectus or
the Registration Statement consists of the statement with respect to the public
offering of the Shares by the Underwriters set forth on the front cover page of,
and the information appearing in the second, tenth, eleventh, twelfth,
thirteenth, fourteenth and fifteenth paragraphs, as well as the third sentence
in the seventh paragraph and the statement as to actions of the Underwriters in
the first sentence of the eighth paragraph under the caption "Underwriting" in
the Prospectus.
14. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. The Company
irrevocably submits to the non-exclusive jurisdiction of any court of the State
of New York or the United State District Court for the Southern District of the
State of New York for the purpose of any suit, action, or other proceeding
arising out of this Agreement, or any of the agreements or transactions
contemplated by this Agreement, the Registration Statement and the Prospectus.
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15. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers, the Selling Shareholder or the Option Shareholder and
(c) delivery of and payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
-31-
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Shareholder, the
Option Shareholder, the Company and the several Underwriters in accordance with
its terms.
Very truly yours,
FORWARD AIR CORPORATION
By:______________________________________
Name:
Title:
SELLING SHAREHOLDER
By:______________________________________
Attorney-In-Fact
OPTION SHAREHOLDER
By:______________________________________
Attorney-In-Fact
-32-
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
BEAR, XXXXXXX & CO. INC.
DEUTSCHE BANK SECURITIES INC.
BB&T CAPITAL MARKETS,
a division of Xxxxx & Xxxxxxxxxxxx, Inc.
By: Bear, Xxxxxxx & Co. Inc.
By: ___________________________
Authorized Officer
By: Deutsche Bank Securities Inc.
By: ___________________________
Authorized Officer
For themselves and as Representatives of the several
Underwriters listed on Schedule I
-33-
SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------------
Bear, Xxxxxxx & Co. Inc.
Deutsche Bank Securities Inc.
BB&T Capital Markets,
a division of Xxxxx & Xxxxxxxxxxxx, Inc.
----------
Total 2,200,000
=========
SCHEDULE II
SCHEDULE OF SUBSIDIARIES
State of Incorporation
----------------------
FAF, Inc. Tennessee
Forward Air, Inc. Tennessee
Forward Air International Airlines, Inc. Tennessee
Forward Air Licensing Company Delaware
Forward Air Royalty Company Delaware
Forward Air Systems Technology, Inc. Tennessee
Transportation Properties, Inc. Tennessee
ANNEX I
Form of Lock-Up Agreement
[Date]
BEAR. XXXXXXX & CO. INC.
DEUTSCHE BANK SECURITIES INC.
BB&T CAPITAL MARKETS,
a division of Xxxxx & Xxxxxxxxxxxx, Inc.
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Equity Capital Markets
Forward Air Corporation Lock-Up Agreement
Ladies and Gentlemen:
This letter agreement (this "Agreement") relates to the proposed public
offering (the "Offering") by certain shareholders of Forward Air Corporation, a
Tennessee corporation (the "Company"), of its common stock, $0.01 par value (the
"Stock").
In order to induce you to underwrite the Offering, the undersigned
hereby agrees that, without the prior written consent of Bear, Xxxxxxx & Co.
Inc. and Deutsche Bank Securities Inc. (the "Joint Book-Runners"), during the
period from the date hereof until ninety (90) days from the date of the final
prospectus for the Offering (the "Lock-Up Period"), the undersigned (a) will
not, directly or indirectly, offer, sell, agree to offer or sell, solicit offers
to purchase, grant any call option or purchase any put option with respect to,
pledge, borrow or otherwise dispose of any Relevant Security (as defined below),
and (b) will not establish or increase any "put equivalent position" or
liquidate or decrease any "call equivalent position" with respect to any
Relevant Security (in each case within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder), or otherwise enter into any swap, derivative or other
transaction or arrangement that transfers to another, in whole or in part, any
economic consequence of ownership of a Relevant Security, whether or not such
transaction is to be settled by delivery of Relevant Securities, other
securities, cash or other consideration. As used herein "Relevant Security"
means the Stock, any other equity security of the Company or any of its
subsidiaries and any security convertible into, or exercisable or exchangeable
for, any Stock or other such equity security.
Notwithstanding the foregoing, the undersigned may transfer Relevant
Securities by bona fide gift to any parent, mother-in-law or father-in-law,
husband or wife, brother or sister, sister-
in-law or brother-in-law, son-in-law or daughter-in-law and children of the
undersigned or to a trust for the direct or indirect benefit of undersigned or
the undersigned's family members, provided that each resulting transferee of
Relevant Securities executes and delivers to you an agreements satisfactory to
you certifying that such transferee is bound by the terms of this Agreement and
has been in compliance with the terms hereof since the date first above written
as if it had been an original party hereto.
The undersigned hereby authorizes the Company during the Lock-Up Period
to cause any transfer agent for the Relevant Securities to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to, Relevant Securities for which the undersigned is the record holder
and, in the case of Relevant Securities for which the undersigned is the
beneficial but not the record holder, agrees during the Lock-Up Period to cause
the record holder to cause the relevant transfer agent to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to, such Relevant Securities. The undersigned hereby further agrees
that, without the prior written consent of the Joint Book-Runners, during the
Lock-up Period the undersigned (x) will not file or participate in the filing
with the Securities and Exchange Commission of any registration statement, or
circulate or participate in the circulation of any preliminary or final
prospectus or other disclosure document with respect to any proposed offering or
sale of a Relevant Security and (y) will not exercise any rights the undersigned
may have to require registration with the Securities and Exchange Commission of
any proposed offering or sale of a Relevant Security.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement and that this Agreement
constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will
execute any additional documents necessary in connection with enforcement
hereof. Any obligations of the undersigned shall be binding upon the successors
and assigns of the undersigned from the date first above written.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. Delivery of a signed copy of this letter by
facsimile transmission shall be effective as delivery of the original hereof.
Very truly yours,
By: ______________________________
Print Name: _______________________
