EXHIBIT 1.1
5,500,000 Shares
UNITED ROAD SERVICES, INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
April __, 1998
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON
BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
As representatives of the
several Underwriters
named in Schedule I hereto
c/▇ ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
United Road Services, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell 5,500,000 shares of its common stock, $0.001 par
value (the "FIRM SHARES") to the several underwriters named in Schedule I hereto
(the "UNDERWRITERS"). The Company also proposes to issue and sell to the
several Underwriters not more than an additional 825,000 shares of its common
stock, $0.001 par value (the "ADDITIONAL SHARES"), if requested by the
Underwriters as provided in Section 2 hereof. The Firm Shares and the
Additional Shares are hereinafter referred to collectively as the "SHARES". The
shares of common stock of the Company to be outstanding after giving effect to
the sales contemplated hereby are hereinafter referred to as the "COMMON STOCK".
Simultaneously with the closing of the purchase of the Firm Shares by the
Underwriters, the Company will acquire in separate merger or exchange
transactions, all the common stock and ownership interests of the Founding
Companies (as hereinafter defined) (collectively, the "FOUNDING COMPANY
MERGERS"), the
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consideration for which will be a combination of cash and shares of Common Stock
as described in the Registration Statement (as hereinafter defined). After the
closing of the purchase of the Firm Shares by the Underwriters, the Company is
expected to acquire (the "Keystone Merger") all of the common stock of Keystone
Towing, Inc. ("Keystone"), the consideration for which will be a combination of
cash and shares of Common Stock as described in the Registration Statement.
SECTION 1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "COMMISSION") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"ACT"), a registration statement on Form S-1, including a prospectus, relating
to the Shares. The registration statement, as amended at the time it became
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter referred to as the "REGISTRATION STATEMENT," and the
prospectus in the form first used to confirm sales of Shares is hereinafter
referred to as the "PROSPECTUS." If the Company has filed or is required
pursuant to the terms hereof to file a registration statement pursuant to Rule
462(b) under the Act registering additional shares of Common Stock (a "RULE
462(B) REGISTRATION STATEMENT"), then, unless otherwise specified, any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462(b) Registration Statement.
SECTION 2. Agreements to Sell and Purchase and Lock-Up Agreements. On the
basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell, and
each Underwriter agrees, severally and not jointly, to purchase from the Company
at a price per Share of $______ (the "PURCHASE PRICE") the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell the Additional Shares and the Underwriters shall have the right to
purchase, severally and not jointly, up to 825,000 Additional Shares from the
Company at the Purchase Price. Additional Shares may be purchased solely for the
purpose of covering over-allotments made in connection with the offering of the
Firm Shares. The Underwriters may exercise their right to purchase Additional
Shares in whole or in part from time to time, but in any event only once, by
giving written notice thereof to the Company within 30 days after the date of
this Agreement. You shall give any such notice on behalf of the Underwriters
and such notice shall specify the aggregate number of Additional Shares to be
purchased pursuant to such exercise and the date for payment and delivery
thereof, which date shall be a business day (i) no earlier than two business
days after such notice has been given (and, in any event, no earlier than the
Closing Date (as hereinafter defined)) and (ii) no later than ten business days
after such notice has been given. If any Additional Shares are to be
purchased, each Underwriter, severally and not jointly, agrees to purchase from
the Company the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) which bears the same
proportion to the total number of Additional Shares to be purchased
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from the Company as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I bears to the total number of Firm Shares.
The Company hereby agrees not to (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (ii) enter
into any swap or other arrangement that transfers all or a portion of the
economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, or such other securities, in
cash or otherwise), except to the Underwriters pursuant to this Agreement, for a
period of 180 days after the date of the Prospectus without the prior written
consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation. Notwithstanding
the foregoing, during such period (i) the Company may grant stock options
pursuant to the Company's existing stock option plan, (ii) the Company may issue
shares of Common Stock upon the exercise of options granted under such stock
option plans, (iii) the Company may issue up to 377,624 shares of Common Stock
in connection with the Keystone Merger and (iv) the Company may issue up to
5,000,000 shares of Common Stock in connection with future acquisitions (other
than the Keystone Merger). The Company also agrees not to file any registration
statement with respect to any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock for a period of
180 days after the date of the Prospectus without the prior written consent of
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation. Notwithstanding the
foregoing, during such period (i) the Company may register shares of Common
Stock to be issued upon exercise of stock options under the Company's existing
stock option plans and (ii) the Company may register up to 5,000,000 shares of
Common Stock for use by the Company in future acquisitions. The Company shall,
prior to or concurrently with the execution of this Agreement, deliver an
agreement executed by (i) each of the directors and executive officers of the
Company and (ii) each stockholder listed on Annex I hereto to the effect that
such person, subject to certain express exceptions, will not, during the period
commencing on the date such person signs such agreement and ending 180 days
after the date of the Prospectus, without the prior written consent of
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation, (A) engage in any of the
transactions described in the first sentence of this paragraph or (B) make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock.
SECTION 3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the execution and delivery of this Agreement as in
your judgment is advisable and (ii) initially to offer the Shares upon the terms
set forth in the Prospectus.
SECTION 4. Delivery and Payment. The Shares shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
shall
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request no later than two business days prior to the Closing Date or the
applicable Option Closing Date (as defined below), as the case may be. The
Company shall deliver the Shares, with any transfer taxes thereon duly paid by
the Company, to ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation through the
facilities of The Depository Trust Company ("DTC"), for the respective accounts
of the several Underwriters, against payment to the Company of the Purchase
Price therefore by wire transfer of Federal or other funds immediately available
in New York City. The certificates representing the Shares shall be made
available for inspection not later than 9:30 A.M., New York City time, on the
business day prior to the Closing Date or the applicable Option Closing Date (as
defined below), as the case may be, at the office of DTC or its designated
custodian (the "DESIGNATED OFFICE"). The time and date of delivery and payment
for the Firm Shares shall be 9:00 A.M., New York City time, on ________, 1998 or
such other time on the same or such other date as ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation and the Company shall agree in writing. The time and
date of delivery for the Firm Shares are hereinafter referred to as the "CLOSING
DATE." The time and date of delivery and payment for any Additional Shares to
be purchased by the Underwriters shall be 9:00 A.M., New York City time, on the
date specified in the applicable exercise notice given by you pursuant to
Section 2 or such other time on the same or such other date as ▇▇▇▇▇▇▇▇▇, Lufkin
& ▇▇▇▇▇▇▇▇ Securities Corporation and the Company shall agree in writing. The
time and date of delivery for the Additional Shares are hereinafter referred to
as an "OPTION CLOSING DATE."
The documents to be delivered on the Closing Date or any Option Closing Date
on behalf of the parties hereto pursuant to Section 8 of this Agreement shall be
delivered at the offices of ▇▇▇▇▇▇ ▇▇▇▇ Nemerovski ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and the Shares shall be delivered at the Designated Office, all on the
Closing Date or such Option Closing Date, as the case may be.
SECTION 5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such advice in
writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or
for additional information, (ii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
the suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes, (iii)
when any amendment to the Registration Statement becomes effective, (iv) if
the Company is required to file a Rule 462(b) Registration Statement after
the effectiveness of this Agreement, when the Rule 462(b) Registration
Statement has become effective and (v) of the happening of any event during
the period referred to in Section 5(d) below which makes any statement of a
material fact made in the Registration Statement or the Prospectus untrue
or which requires any additions to or changes in the Registration Statement
or the Prospectus in order to make the statements therein not misleading.
If at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will use its best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
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(b) To furnish to you four signed copies of the Registration Statement as first
filed with the Commission and of each amendment to it, including all
exhibits, and to furnish to you and each Underwriter designated by you such
number of conformed copies of the Registration Statement as so filed and of
each amendment to it, without exhibits, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall be
satisfactory to you, and to file the Prospectus in such form with the
Commission within the applicable period specified in Rule 424(b) under the
Act; during the period specified in Section 5(d) below, not to file any
further amendment to the Registration Statement and not to make any
amendment or supplement to the Prospectus of which you shall not previously
have been advised or to which you shall reasonably object after being so
advised; and, during such period, to prepare and file with the Commission,
promptly upon your reasonable request, any amendment to the Registration
Statement or amendment or supplement to the Prospectus which may be
necessary or advisable in connection with the distribution of the Shares by
you, and to use its best efforts to cause any such amendment to the
Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day after
the date of this Agreement and from time to time thereafter for such period
as in the opinion of counsel for the Underwriters a prospectus is required
by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and any dealer as
many copies of the Prospectus (and of any amendment or supplement to the
Prospectus) as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall occur or
condition shall exist as a result of which, in the opinion of counsel for
the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable
law, forthwith to prepare and file with the Commission an appropriate
amendment or supplement to the Prospectus so that the statements in the
Prospectus, as so amended or supplemented, will not in the light of the
circumstances when it is so delivered, be misleading, or so that the
Prospectus will comply with applicable law, and to furnish to each
Underwriter and to any dealer as many copies thereof as such Underwriter or
dealer may reasonably request; provided, however, that if nine months have
passed since the date of the Prospectus, the Company shall do the foregoing
at the expense of the Underwriters.
(f) Prior to any public offering of the Shares, to cooperate with you and
counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request, to continue such registration or
qualification in effect so long as required for distribution of the Shares
and to file such consents to service of process or other documents as may
be necessary in order to effect such registration or qualification;
provided, however, that the
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Company shall not be required in connection therewith to qualify as a
foreign corporation in any jurisdiction in which it is not now so qualified
or to take any action that would subject it to general consent to service
of process or taxation other than as to matters and transactions relating
to the Prospectus, the Registration Statement, any preliminary prospectus
or the offering or sale of the Shares, in any jurisdiction in which it is
not now so subject.
(g) To mail and make generally available to its stockholders as soon as
practicable an earnings statement covering the twelve-month period ending
June 30, 1999 that shall satisfy the provisions of Section 11(a) of the
Act.
(h) During the period of three years after the date of this Agreement, to
furnish to you as soon as available copies of all reports or other
communications furnished to the record holders of Common Stock or furnished
to or filed with the Commission and such other publicly available
information concerning the Company and its subsidiaries as you may
reasonably request.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Act and all other fees
and expenses in connection with the preparation, printing, filing and
distribution of the Registration Statement (including financial statements
and exhibits), any preliminary prospectus, the Prospectus and all
amendments and supplements to any of the foregoing, including the mailing
and delivering of copies thereof to the Underwriters and dealers in the
quantities specified herein, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) all costs of printing or
producing this Agreement and any other agreements or documents in
connection with the offering, purchase, sale or delivery of the Shares,
(iv) all expenses in connection with the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of the
several states and all costs of printing or producing any Preliminary and
Supplemental Blue Sky Memoranda in connection therewith (including the
filing fees and fees and disbursements of counsel for the Underwriters in
connection with such registration or qualification and memoranda relating
thereto), (v) all expenses in connection with the review and clearance of
the offering of the Shares by the National Association of Securities
Dealers, Inc., including filing fees and fees and disbursements of counsel
for the Underwriters in connection therewith, (vi) all fees and expenses in
connection with the preparation and filing of the registration statement on
Form 8-A relating to the Common Stock and all costs and expenses incident
to the listing of the Shares on the Nasdaq National Market, (vii) the cost
of printing certificates representing the Shares, (viii) the costs and
charges of any transfer agent, registrar and/or depositary, and (ix) all
other costs and expenses incident to the performance of the obligations of
the Company hereunder for which provision is not otherwise made in this
Section.
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(j) To use its best efforts to list for quotation the Shares on the Nasdaq
National Market and to maintain the listing of the Shares on the Nasdaq
National Market for a period of three years after the date of this
Agreement.
(k) To use its best efforts to do and perform all things required or necessary
to be done and performed under this Agreement by the Company prior to the
Closing Date or any Option Closing Date, as the case may be, and to satisfy
all conditions precedent to the delivery of the Shares.
(l) If the Registration Statement at the time of the effectiveness of this
Agreement does not cover all of the Shares, to file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time,
on the date of this Agreement and to pay to the Commission the filing fee
for such Rule 462(b) Registration Statement at the time of the filing
thereof or to give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Act.
(m) To apply the net proceeds from the sale of the Shares as set forth in the
Prospectus and to file such reports with the Commission with respect to the
sale of the Shares and the application of the proceeds therefrom as may be
required in accordance with Rule 463 under the Act.
(n) To use its best efforts to: (i) satisfy all conditions precedent to the
consummation of the Founding Company Mergers and the Keystone Merger as set
forth in the Merger Agreements (as hereinafter defined) with respect
thereto and (ii) promptly notify the Underwriters of the occurrence of any
event which may result in the non-consummation of any of the Founding
Company Mergers on the Closing Date or the Keystone Merger after the
Closing Date.
(o) Not to invest, or otherwise use, the proceeds received by the Company from
its sale of the Shares in such a manner as would require the Company, any
of the Founding Companies or Keystone to register as an investment company
under the Investment Company Act of 1940, as amended (the "1940 Act").
(p) Not to take, directly or indirectly any action designed to cause or result
in, or that has constituted or might reasonably be expected to constitute,
a stabilization or manipulation of the price of any securities of the
Company.
SECTION 6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness
of this Agreement); any Rule 462(b) Registration Statement filed after the
effectiveness of this Agreement will become effective no later than 10:00
P.M., New York City time, on the date of this Agreement; and no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the Company's
knowledge, threatened by the Commission.
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(b) (i) The Registration Statement (other than any Rule 462(b) Registration
Statement to be filed by the Company after the effectiveness of this
Agreement), when it became effective, did not contain and, as amended, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) the Registration Statement
(other than any Rule 462(b) Registration Statement to be filed by the
Company after the effectiveness of this Agreement) and the Prospectus
comply and, as amended or supplemented, if applicable, will comply in all
material respects with the Act, (iii) if the Company is required to file a
Rule 462(b) Registration Statement after the effectiveness of this
Agreement, such Rule 462(b) Registration Statement and any amendments
thereto, when they become effective (A) will not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading and (B) will comply in all material respects with the Act and
(iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph
do not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter furnished
to the Company in writing by such Underwriter through you expressly for use
therein.
(c) Each preliminary Prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed pursuant to
Rule 424 under the Act, complied when so filed in all material respects
with the Act, and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in any preliminary prospectus based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(d) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to carry on its
business as described in the Prospectus and to own, lease and operate its
properties. Each of Northland Auto Transporters, Inc. and Northland Fleet
Leasing, Inc., Falcon Towing and Auto Delivery, Inc., ▇▇▇▇▇ Auto Works,
Inc. and ▇▇▇▇▇ Auto Brokers, Inc., ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇ Enterprises, Inc. and
City Towing, Inc., ASC Transportation Services and Auto Service Center,
Absolute Towing and Transporting, Inc., and Silver State Tow & Recovery,
Inc., and each of their respective subsidiaries (collectively, the
"Founding Companies") has been duly organized and is validly existing as a
corporation under the laws of the jurisdiction of its incorporation and has
the corporate power and authority to carry on its business as described in
the Prospectus and to own, lease and operate its properties. As of the
date hereof, the Company has no subsidiaries. The Company and each of the
Founding Companies is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, except
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where the failure to be so qualified would not have a material adverse
effect on the business, prospects, financial condition or results of
operations of the Company and the Founding Companies, taken as a whole.
(e) There are no outstanding subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sale or liens granted or issued by
the Company relating to or entitling any person to purchase or otherwise to
acquire any shares of the capital stock of the Company, except as otherwise
disclosed in the Registration Statement.
(f) All the outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights; and the Shares have been duly
authorized and, when issued and delivered to the Underwriters against
payment therefor as provided by this Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights; the shares of Common Stock to
be issued in connection with the Founding Company Mergers have been duly
authorized and, upon completion of the Founding Company Mergers in the
manner described in the Registration Statement, will be validly issued,
fully paid and non-assessable when issued as contemplated by the Merger
Agreements and such shares to be issued in the Founding Company Mergers
will not be subject to any preemptive or similar rights.
(g) The outstanding shares of capital stock of each of the Founding Companies
have been duly authorized and validly issued and are fully paid and non-
assessable. Except as described in the Registration Statement, immediately
prior to consummation of the Founding Company Mergers, the outstanding
shares of capital stock of each of the Founding Companies will be owned by
the stockholders of the Founding Companies, directly or indirectly through
one or more subsidiaries, free and clear of any security interest, claim,
lien, encumbrance or adverse interest of any nature and 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 of or ownership interest in any of the Founding Companies will be
outstanding.
(h) The authorized capital stock of the Company conforms as to legal matters to
the description thereof contained in the Prospectus.
(i) None of the Company or any of the Founding Companies is, or with the giving
of notice or lapse of time or both, will be, in violation of its respective
charter or by-laws or in default in the performance of any obligation,
agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Company and the Founding Companies, taken as a whole, to
which the Company or any of the Founding Companies is a party or by which
the Company or any of the Founding Companies or their respective properties
are bound.
(j) The execution, delivery and performance of this Agreement by the Company,
the compliance by the Company with all of the provisions hereof and the
consummation of the transactions contemplated hereby, and the execution,
delivery and
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performance of the Merger Agreements by the Company and the Founding
Companies, the compliance by the Company and the Founding Companies with
all the provisions thereof and the consummation of the transactions
contemplated thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Company or any of the Founding
Companies, or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and the Founding
Companies, taken as a whole, to which the Company or any of the Founding
Companies is a party or by which the Company or any of the Founding
Companies or their respective properties are bound, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order
or decree of any court or any governmental body or agency having
jurisdiction over the Company or any of the Founding Companies or their
respective properties or (iv) result in the suspension, termination or
revocation of any Authorization (as defined below) of the Company or any of
the Founding Companies or any other impairment of the rights of the holder
of any such Authorization.
(k) There are no legal or governmental proceedings pending or threatened to
which the Company or any of the Founding Companies is or would likely be a
party or to which any of their respective properties are or would likely be
subject that are required to be described in the Registration Statement or
the Prospectus and are not so described; nor are there any statutes,
regulations, contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement that are not so described or filed as
required.
(l) The information set forth under the caption "Capitalization" in the
Prospectus is true and correct. All of the Shares conform to the
description thereof contained in the Registration Statement. The form of
certificate for the Shares conforms to the corporate law of the
jurisdiction of the Company's incorporation. The description of the
Company's stock option, stock bonus and other stock plans or arrangements,
and the options and other rights granted thereunder, set forth in the
Prospectus accurately and fairly presents the information required to be
shown pursuant to the Act with respect to such plans, arrangements, options
and rights.
(m) None of Company or any of the Founding Companies is in violation of any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), any provisions of the Employee Retirement Income Security Act of
1974, as amended, or any provisions of the Foreign Corrupt Practices Act,
or the rules and regulations promulgated thereunder, except for such
violations which, singly or in the aggregate, would not have a material
adverse effect on the business, prospects, financial condition or results
of operation of the Company and the Founding Companies, taken as a whole.
(n) The Company and each of the Founding Companies has such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals (each,
an "AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or
10
regulatory authorities and self-regulatory organizations and all courts and
other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure
to have any such Authorization or to make any such filing or notice would
not, singly or in the aggregate, have a material adverse effect on the
business, financial condition or results of operations of the Company and
the Founding Companies, taken as a whole. Each such Authorization is valid
and in full force and effect and the Company and each of the Founding
Companies is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies
having jurisdiction with respect thereto; and no event has occurred
(including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of time
or both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would
result in any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
burdensome to the Company or any of the Founding Companies; except where
such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a material adverse
effect on the business, financial condition or results of operations of the
Company and the Founding Companies, taken as a whole.
(o) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on
operating activities and any potential liabilities to third parties) which
would, singly or in the aggregate, have a material adverse effect on the
business, financial condition or results of operations of the Company and
the Founding Companies, taken as a whole.
(p) This Agreement has been duly authorized, executed and delivered by the
Company.
(q) KPMG Peat Marwick LLP, who have expressed their opinion with respect to the
financial statements (which term as used in this Agreement includes the
related notes thereto) and supporting schedules filed with the Commission
as part of the Registration Statement and included in the Prospectus, are
independent public accountants with respect to the Company and each of the
Founding Companies as required by the Act.
(r) The consolidated financial statements of the Company and the separate
financial statements of each of the Founding Companies included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), in each case together with related schedules and notes, present
fairly the consolidated financial position, results of operations and
changes in financial position of the Company and of each of the Founding
Companies, on the basis stated therein at the respective dates or for the
respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed
11
therein; the supporting schedules, if any, included in the Registration
Statement present fairly in accordance with generally accepted accounting
principles the information required to be stated therein; and the other
financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) are, in all material respects, accurately presented and prepared
on a basis consistent with such financial statements and the books and
records of the Company and the Founding Companies. The pro forma financial
statements of the Company and the Founding Companies and the related notes
thereto set forth in the Registration Statement and the Prospectus (and any
supplement or amendment thereto) have been prepared on a basis consistent
with the historical financial statements of the Company and the Founding
Companies, give effect to the assumptions used in the preparation thereof
on a reasonable basis and in good faith and present fairly the historical
and proposed transactions contemplated by the Registration Statement and
the Prospectus and the Merger Agreements. Such pro forma financial
statements have been prepared in accordance with the applicable
requirements of Rule 11-02 of Regulation S-X promulgated by the Commission.
The other pro forma financial and statistical information and data set
forth in the Registration Statement and the Prospectus (and any supplement
or amendment thereto) are, in all material respects, accurately presented
and prepared on a basis consistent with the pro forma financial statements.
(s) The Company is not and, after giving effect to the offering and sale of the
Shares and the application of the proceeds thereof as described in the
Prospectus, will not be, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended.
(t) Except as described in the Registration Statement, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares registered
pursuant to the Registration Statement.
(u) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), (i) there has not occurred any material adverse change or any
development involving a prospective material adverse change in the
condition, financial or otherwise, or the earnings, business, management or
operations of the Company and the Founding Companies, taken as a whole,
(ii) there has not been any material adverse change or any development
involving a prospective material adverse change in the capital stock or in
the long-term debt of the Company, or except as permitted by the Merger
Agreements, any of the Founding Companies; (iii) none of the Company or any
of the Founding Companies has incurred any material liability or
obligation, direct or contingent; and (iv) there has not been any material
transaction entered into or any material transaction that is probable of
being entered into by the Company or any of the Founding Companies, other
than transactions in the ordinary course of business. None of the Company
or any of the Founding Companies has any material contingent obligations
which are not disclosed in the Company's or such Founding Company's
financial statements, as applicable, included in the Registration
Statement.
12
(v) The Company and each of the Founding Companies has good and marketable
title to all of its properties and assets reflected as owned in its
financial statements (or as described in the Registration Statement)
described in Section 6(r) hereof, in each case free and clear of any
security interests, mortgages, liens, encumbrances, pledges, charges or
defects of any kind except those (i) reflected in such financial
statements (or as described in the Registration Statement), (ii) permitted
by the Merger Agreements, or (iii) which, in the aggregate, are not
material in amount to the Company and the Founding Companies, taken as a
whole. The real property, improvements, equipment and personal property
held under lease by the Company or any of the Founding Companies are held
under valid, binding and enforceable leases, conforming in all material
respects to the description thereof set forth in the Registration
Statement.
(w) The Company and each of the Founding Companies has filed all necessary
federal, state, and local income and franchise tax returns and have paid
all taxes required to be paid by any of them and, if due and payable, any
related or similar assessment, fine or penalty levied against any of them.
The Company and each of the Founding Companies has made adequate charges,
accruals and reserves in the applicable financial statements referred to in
Section 6(r) hereof in respect of all federal, state and local income and
franchise taxes for all periods as to which the tax liability of the
Company or any Founding Company has not been finally determined.
(x) The Company and each of the Founding Companies are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; none of the Company or any of the Founding Companies has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other material expenditures will have to be made in
order to continue such insurance; and the Company has no reason to believe
that, upon consummation of the Founding Company Mergers, it will not be
able to obtain insurance coverage similar to that possessed by the Founding
Companies as of the date hereof from a reputable insurer or insurers at a
cost that would not have a material adverse effect on the business,
financial condition or results of operations of the Company and the
Founding Companies, taken as a whole.
(y) The Company and each of the Founding Companies 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 authorizations, (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.
(z) The Company and each of the Founding Companies is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, and the rules and
regulations promulgated thereunder (collectively, "ERISA"); no "reportable
event" (as defined in
13
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company or any of the Founding Companies would have
any liability; none of the Company or any of the Founding Companies has
incurred nor expects to incur liability under (1) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan," or (2)
Section 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 or any of the
Founding Companies 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 accident or by failure to
act, which would cause the loss of such qualification.
(aa) The Company has entered into the agreements (the "Merger Agreements") set
forth as Exhibits 2.1 through 2.10 to the Registration Statement, pursuant
to which the Company will acquire in separate merger and exchange
transactions all of the capital stock and ownership interests of the
Founding Companies and Keystone. Each of the Merger Agreements is in full
force and effect, has been duly and validly authorized, executed and
delivered by the parties thereto, and is valid and binding on the parties
thereto in accordance with its terms and neither the Company nor, to the
Company's knowledge, any other party thereto, is in default in any respect
thereunder. A complete and correct copy of each Merger Agreement
(including Exhibits and Schedules) has been delivered to the
Representatives and no changes therein will be made subsequent hereto and
prior to the Closing Date.
(bb) The representations, warranties and covenants made in each Merger Agreement
by the Company, and to the Company's knowledge, by each of the Founding
Companies and by each stockholder of each of the Founding Companies are
true and correct in all material respects, except for such changes
permitted or contemplated by, or waived pursuant to, such Merger Agreement.
(cc) All conditions precedent to the obligation of the Company to consummate the
Founding Company Mergers have been satisfied or waived as of the date
hereof.
(dd) Neither the Company, nor to the Company's knowledge, any of its affiliates
or any of the Founding Companies or any of their affiliates, has taken or
may take, directly or indirectly, any action designated to cause or result
in, which has constituted or which reasonably may 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.
(ee) Each certificate signed by any officer of the Company and delivered to the
Underwriters or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the
matters covered thereby.
(ff) The Company also makes all of the representations and warranties set forth
in Sections 6(d), 6(g), 6(i), 6(j) (with an exception for the municipal
approval of the contract assignment required in connection with the
Keystone Merger as described
14
in the Prospectus), 6(k), 6(m), 6(n), 6(o), 6(q), 6(r), 6(u), 6(v), 6(w),
6(x), 6(y), 6(z), 6(bb), 6(cc), 6(dd), 6(ee), and the third clause of
Section 6(f) with respect to Keystone and the Keystone Merger; provided,
however, that with respect to such representations and warranties the
phrase "material adverse effect" shall be deemed to refer to a material
adverse effect on the business, financial condition or results of
operations of the Company, the Founding Companies and Keystone, taken as a
whole.
SECTION 7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter, its
directors, its officers and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), from
and against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any
action, that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or
any amendment thereto), the Prospectus (or any amendment or supplement
thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to any Underwriter furnished in
writing to the Company by such Underwriter through you expressly for use
therein; provided, however, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter who failed to deliver a Prospectus (as then amended or
supplemented, provided by the Company to the several Underwriters in the
requisite quantity and on a timely basis to permit proper delivery on or
prior to the Closing Date) to the person asserting any losses, claims,
damages and liabilities and judgments caused by any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, or caused by any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such material misstatement or
omission or alleged material misstatement or omission was cured in such
Prospectus and such Prospectus was required by law to be delivered at or
prior to the written confirmation of sale to such person.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the
same extent as the foregoing indemnity from the Company to such Underwriter
but only with reference to information relating to such Underwriter
furnished in writing to the Company by such Underwriter through you
expressly for use in the Registration Statement (or any amendment thereto),
the Prospectus (or any amendment or supplement thereto) or any preliminary
prospectus.
15
(c) In case any action shall be commenced involving any person in respect of
which indemnity may be sought pursuant to Section 7(a) or 7(b) hereof (the
"indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying party")
in writing and the indemnifying party shall assume the defense of such
action, including the employment of counsel reasonably satisfactory to the
indemnified party and the payment of all fees and expenses of such counsel,
as incurred (except that in the case of any action in respect of which
indemnity may be sought pursuant to both Sections 7(a) and 7(b), the
Underwriter shall not be required to assume the defense of such action
pursuant to this Section 7(c), but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such
counsel, except as provided below, shall be at the expense of such
Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of the
indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action
or employ counsel reasonably satisfactory to the indemnified party or (iii)
the named parties to any such action (including any impleaded parties)
include both the indemnified party and the indemnifying party, and the
indemnified party shall have been advised by such counsel that there may be
one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such
action on behalf of the indemnified party). In any such case, the
indemnifying party shall not, in connection with any one action or separate
but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for
the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such
fees and expenses shall be reimbursed as they are incurred. Such firm
shall be designated in writing by ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation, in the case of parties indemnified pursuant to Section 7(a),
and by the Company, in the case of parties indemnified pursuant to Section
7(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written
consent if the settlement is entered into more than twenty business days
after the indemnifying party shall have received a request from the
indemnified party for reimbursement for the fees and expenses of counsel
(in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the
indemnifying party shall have failed to comply with such reimbursement
request. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could
have been a party and indemnity or contribution may be or could have been
sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability on claims that are or could have been
the subject matter of such action and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act, by or on
behalf of the indemnified party.
16
(d) To the extent the indemnification provided for in this Section 7 is
unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as
a result of such losses, claims, damages, liabilities and judgments (i) in
such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other hand from
the offering of the Shares or (ii) if the allocation provided by clause
7(d)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
7(d)(i) above but also the relative fault of the Company on the one hand
and the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the
Underwriters on the other hand shall be deemed to be in the same proportion
as the total net proceeds from the offering (after deducting underwriting
discounts and commissions, but before deducting expenses) received by the
Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Shares, in
each case as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7(d) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
17
(e) The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
SECTION 8. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters to purchase the Firm Shares under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in this
Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement shall have become effective by 10:00 P.M., New York City time, on
the date of this Agreement; and no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings for
that purpose shall have been commenced or shall be pending before or
contemplated by the Commission.
(c) You shall have received on the Closing Date a certificate dated the Closing
Date, signed by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ in his capacity as the Chief Executive
Officer and Secretary of the Company, confirming the matters set forth in
Sections 6(u) (with respect to the Company and the Founding Companies, and
also with respect to the Company, the Founding Companies and Keystone),
8(a) and 8(b) and that the Company has complied with all of the agreements
and satisfied all of the conditions herein contained and required to be
complied with or satisfied by the Company on or prior to the Closing Date.
(d) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), (i) there shall not have occurred any change or any
development involving a prospective change in the condition, financial or
otherwise, or the earnings, business, management or operations of the
Company and the Founding Companies, taken as a whole, (ii) there shall not
have been any change or any development involving a prospective change in
the capital stock or in the long-term debt of the Company or any of the
Founding Companies and (iii) none of the Company or any of the Founding
Companies shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause
8(d)(i), 8(d)(ii) or 8(d)(iii), in your judgment, is material and adverse
and, in your judgment, makes it impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
(e) You shall have received on the Closing Date an opinion (satisfactory to you
and counsel for the Underwriters), dated the Closing Date, of Howard, Rice,
Nemerovski, Canady, ▇▇▇▇ & ▇▇▇▇▇▇, A Professional Corporation, counsel for
the Company, to the effect that:
(i) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to carry on its
business as described in the Prospectus and to own, lease and operate its
properties;
(ii) the Company is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified would not
have a material adverse effect on the business, financial condition or
results of operations of the Company and the Founding Companies, taken as a
whole;
(iii) to such counsel's knowledge, there are no outstanding subscriptions,
rights, warrants, options, calls, convertible securities, commitments of
sales or liens granted or issued by the Company, relating to or entitling
any person to purchase or otherwise acquire any shares of the capital stock
of the Company except as otherwise disclosed in the Registration Statement;
(iv) all the outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights under the Company's
certificate of incorporation or bylaws or under any agreement or other
instrument known to such counsel;
(v) the Shares have been duly authorized and, when issued and delivered
to the Underwriters against payment therefor as provided by this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar rights under
the Company's certificate of incorporation or bylaws or under any agreement
or other instrument known to such counsel; and the shares of Common Stock
to be issued in connection with the Founding Company Mergers and the
Keystone Merger have been duly authorized and will be validly issued, fully
paid and non-assessable when issued as contemplated by the Merger
Agreements and such shares to be issued in the Founding Company Mergers and
the Keystone Merger will not be subject to any preemptive or similar rights
under the Company's certificate of incorporation or bylaws or under any
agreement or other instrument known to such counsel;
(vi) this Agreement has been duly authorized, executed and delivered by
the Company;
(vii) the authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus; the
description of the Company's stock option, stock bonus and other stock
plans or arrangements, and any options or other rights granted and
exercised thereunder, set forth in the Prospectus accurately and fairly
presents the information required to be shown with respect to such plans,
arrangements, options and rights;
(viii) the Registration Statement has become effective under the Act, no
stop order suspending its effectiveness has been issued and no proceedings
18
for that purpose are, to the best of such counsel's knowledge after due
inquiry, pending before or contemplated by the Commission;
(ix) the statements in the Prospectus under the captions "The Company",
"Management Executive Compensation; Employment Agreements; Covenants-Not-
to-Compete", "- Stock Option Plan", "Certain Transactions", "Shares
Eligible For Future Sale", "Description of Capital Stock" and the seventh
paragraph of "Underwriting" and Items 14 and 15 of Part II of the
Registration Statement, insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings;
(x) the Company is not in violation of its certificate of incorporation
or by-laws ;
(xi) the execution, delivery and performance of this Agreement and the
Merger Agreements by the Company, the compliance by the Company with all
the provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby does not (A) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (B) conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the certificate of Incorporation or by-laws of the Company or any
indenture, loan agreement, mortgage, lease or other agreement or instrument
that is material to the Company and the Founding Companies, taken as a
whole, to which the Company is a party or by which the Company or its
property is bound, (C) violate or conflict with any applicable law or any
rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company or its
property or (D) result in the suspension, termination or revocation of any
Authorization of the Company or any other material impairment of the rights
of the Company under any such Authorization;
(xii) such counsel does not know of any legal or governmental proceedings
pending or threatened to which the Company, any of the Founding Companies
or Keystone is, or has been threatened to be made a party to which any of
their respective property is, or has been threatened to be made subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described, or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described or filed as required;
(xiii) the Company is not and, after giving effect to the offering and sale
of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended;
19
(xiv) except as described in the Registration Statement, to such counsel's
knowledge, there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement;
(xv) each of the Merger Agreements has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company in
accordance with its terms and, to the knowledge of such counsel, the
Company is not in default in any respect thereunder; the Certificates or
Articles of Merger referred to in the Merger Agreements, assuming the due
filing thereof with the appropriate regulatory authorities, will cause the
statutory merger of each of the Founding Companies and Keystone with the
Company.
(xvi) upon the filing of the appropriate documents with the appropriate
governmental entities, the Founding Company Mergers will become effective
pursuant to the Merger Agreements and applicable state law; and
(xvii) the Registration Statement and the Prospectus and any supplement or
amendment thereto (except for the financial statements and other financial
data included therein as to which no opinion need be expressed) comply as
to form in all material respects with the Act.
In addition to the matters set forth above, such counsel shall also
provide a statement that (A) such counsel has no reason to believe that at
the time the Registration Statement became effective or on the date of this
Agreement, the Registration Statement and the prospectus included therein
(except for the financial statements and other financial data as to which
such counsel need not express any belief) contained any 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 (B)
such counsel has no reason to believe that the Prospectus, as amended or
supplemented, if applicable (except for the financial statements and other
financial data, as aforesaid) contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
The opinion of Howard, Rice, Nemerovski, Canady, ▇▇▇▇ & Rabkin, A
Professional Corporation, described in Section 8(e) above shall be rendered to
you at the request of the Company and shall so state therein.
(f) You shall have received on the Closing Date opinions, dated the Closing
Date, of counsel reasonably satisfactory to you and in form and substance
satisfactory to you as to the matters referred to in Sections 8(e)(i),
8(e)(ii), 8(e)(iii), 8(e)(iv), 8(e)(x), 8(e)(xi) (with respect to the
Merger Agreements only), 8(e)(xii), 8(e)(xv), and 8(e)(xvi) hereof with
respect to each of the Founding Companies and
20
Keystone. Such opinions shall also include an opinion that, upon
consummation of the Founding Company Mergers or the Keystone Merger, as the
case may be, all outstanding shares of capital stock of the Founding
Company that is the subject of the opinion or Keystone, as the case may be,
will be owned by the Company free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature, and to such
counsel's knowledge, 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 of or other ownership interest
in such Founding Company or Keystone will be outstanding.
(g) You shall have received on the Closing Date an opinion, dated the Closing
Date, of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, counsel for the Underwriters, as to the
matters referred to in Sections 8(e)(iv), 8(e)(vi), 8(e)(ix) (but only with
respect to the statements under the caption "Description of Capital Stock"
and "Underwriting") 8(e)(xvii) and a statement as to the matters referred
to in the second to last paragraph of Section 8(e).
In giving such opinions with respect to the matters covered by Section
8(e)(xvii), Howard, Rice, Nemerovski, Canady, ▇▇▇▇ & ▇▇▇▇▇▇, A Professional
Corporation, and ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇ may state that their opinion and
belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification except as specified.
(h) You shall have received, on each of the date hereof and the Closing Date, a
letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from KPMG Peat Marwick, LLP,
independent public accountants, containing the information and statements
of the type ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(i) The Company shall have delivered to you the agreements specified in Section
2 hereof which agreements shall be in full force and effect on the Closing
Date.
(j) The Shares shall have been duly listed for quotation on the Nasdaq National
Market.
(k) The Company shall not have failed on or prior to the Closing Date to
perform or comply with any of the agreements herein contained and required
to be performed or complied with by the Company on or prior to the Closing
Date.
(l) (i) Each Founding Company Merger shall have been consummated upon the
terms set forth in the Prospectus simultaneously with the closing of the
purchase of the Firm Shares by the Underwriters hereunder; and
(ii) each certificate delivered to the Company pursuant to each Merger
Agreement shall have also been delivered to the Underwriters.
21
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
SECTION 9. Effectiveness of Agreement and Termination. This Agreement shall
become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Company if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and the
Founding Companies, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase the Firm
Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each non-
defaulting Underwriter shall be obligated severally, in the proportion which the
number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Firm Shares or Additional
Shares, as the case may be, which any Underwriter has agreed to purchase
pursuant to Section 2 hereof be increased pursuant to this Section 9 by an
amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the
22
written consent of such Underwriter. If on the Closing Date any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased by all
Underwriters and arrangements satisfactory to you and the Company for purchase
of such Firm Shares are not made within 48 hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter and the Company. In any such case which does not result in
termination of this Agreement, either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. If, on an
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased on such date, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase such Additional Shares or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase on such date in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of any such Underwriter under this
Agreement.
SECTION 10. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company, to United Road
Services, Inc., ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and (ii) if to any Underwriter or to you, to you c/▇ ▇▇▇▇▇▇▇▇▇, Lufkin &
▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Syndicate Department, or in any case to such other address as the
person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Shares,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the officers or directors of any
Underwriter, any person controlling any Underwriter, the Company, the officers
or directors of the Company or any person controlling the Company, (ii)
acceptance of the Shares and payment for them hereunder and (iii) termination of
this Agreement.
If for any reason the Shares are not delivered by or on behalf of the
Company as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 9), the Company agrees to reimburse the several
Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(i) hereof. Any party that is entitled to
indemnification pursuant to Section 7 hereof shall be entitled to reimbursement
by the indemnifying party of such indemnified party's fees and expenses
23
(including, without limitation, the fees disbursements of counsel) incurred by
them in connection with enforcing their rights under Section 7 hereof.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Underwriters, the
Underwriters' directors and officers, any controlling persons referred to
herein, the Company's directors and the Company's officers who sign the
Registration Statement and their respective successors and assigns, all as and
to the extent provided in this Agreement, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Shares from any of the
several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
UNITED ROAD SERVICES, INC.
By:
-----------------------------------
Title:
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON
BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Acting severally on behalf of themselves and the several
Underwriters named in Schedule I hereto
By: ▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By:
----------------------------
24
SCHEDULE I
----------
Underwriters Number of Firm Shares
to be Purchased
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation
Credit Suisse First Boston
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Total
Sch. I-1
Annex I
Persons and Entities to Execute Lock-Up Agreements
[To be determined.]
Annex. I-1
