EXHIBIT 1.1
5,500,000 Shares of Common Stock
TRANSPORTATION COMPONENTS, INC.
UNDERWRITING AGREEMENT
______, 1998
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
BT ALEX. ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Dear Sirs:
Transportation Components, Inc., a corporation organized and
existing under the laws of Delaware (the "Company"), proposes, subject to the
terms and conditions stated herein, to issue and sell to the several
underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
5,500,000 shares (the "Firm Shares") of its common stock, par value $.01 per
share (the "Common Stock") and, for the sole purpose of covering over-allotments
in connection with the sale of the Firm Shares, at the option of the
Underwriters, up to an additional 825,000 shares (the "Additional Shares") of
Common Stock. The Firm Shares and any Additional Shares purchased by the
Underwriters are referred to herein as the "Shares." The Shares are more fully
described in the Registration Statement referred to below.
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Simultaneously with closing on the Firm Shares by the Underwriters,
the Company will cause each of the Founding Companies (as hereinafter defined)
to be merged with a subsidiary of the Company (collectively, the "Founding
Company Mergers"), the consideration for which will be a combination of cash and
shares of the Company's Common Stock as described in the Registration Statement
(as hereinafter defined).
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the Underwriters that:
(a) A registration statement on Form S-1 (Reg. No.
333-______) with respect to the Shares has been carefully prepared by the
Company in conformity 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. Copies of such
registration statement, including any amendments thereto, the preliminary
prospectuses (meeting the requirements of the Rules and Regulations)
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) under 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. "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 the 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."
(b) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement. Each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Co., Transportation Components Co.,
Gear & Wheel, Inc., Amparts International, Inc., The ▇▇▇▇ Brothers
Companies, Inc., Plaza Automotive, Inc., Universal Fleet Supply, Inc.,
Perfection Equipment Company, Inc. and Drive Line, Inc. (collectively the
"Founding Companies") 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. As of the date hereof, the Company has no subsidiaries except
those listed in Item 16 to the Registration Statement. The Company and
each of the Founding Companies are duly
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qualified to transact business in all jurisdictions in which the conduct
of their respective businesses requires such qualification, except where
the failure to so qualify would not have a materially adverse effect on
the business and operations of the Company and the Founding Companies
taken as a whole. The outstanding shares of capital stock of each of the
Founding Companies have been duly authorized and validly issued, are fully
paid and non-assessable. As of the Closing Date (as hereinafter defined),
after giving effect to the Founding Company Mergers, all of the
outstanding shares of capital stock of each of the Founding Companies will
be owned by the Company free and clear of all liens, encumbrances and
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 shares of capital stock or ownership interests in any of
the Founding Companies will be outstanding.
(c) The outstanding shares of Common Stock of the
Company have been duly authorized and validly issued and are fully paid
and non-assessable; the Shares to be issued and sold by the Company have
been duly authorized and when issued and paid for as contemplated herein
will be validly issued, fully paid and non-assessable; and no preemptive
rights of stockholders exist with respect to any of the Shares or the
issue and 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. Upon completion of the Founding Company Mergers in the manner
described in the Registration Statement, the shares of Common Stock of the
Company to be issued in such mergers will be duly authorized, validly
issued and fully paid and non-assessable.
(d) 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 certificates for the Shares conforms to the
corporate law of the jurisdiction of the Company's incorporation.
(e) 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 proceedings for that purpose. The Registration
Statement contains, and the Prospectus and any amendments or supplements
thereto will contain, all statements which are required to be stated
therein by, and will conform to the requirements of the Act and the Rules
and Regulations. The Registration Statement and any amendment thereto do
not contain, and will not contain, any untrue statement of a material fact
and do not omit, and will not omit, to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading. The Prospectus and any supplements thereto do not contain, and
will not contain, any untrue statement of a material fact and do not omit,
and will not omit, to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
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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 any Underwriter through the Representatives, specifically for
use in the preparation thereof.
(f) All of the financial statements of the Company and
the separate financial statements of the Founding Companies, in each case
together with related notes and schedules, as set forth in the
Registration Statement, present fairly in all material respects the
financial position and the results of operations and cash flows of the
Company and of each of the Founding Companies, respectively, 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 historical and pro forma financial and statistical data
included in the Registration Statement present fairly the information
shown therein and such data have been compiled on a basis consistent with
the financial statements presented therein and the books and records of
the Company and the Founding Companies, as applicable. The pro forma
combined financial statements of the Company and the Founding Companies
(including the supplemental pro forma information shown therein), together
with the related notes, as set forth in the Registration Statement,
present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to pro
forma financial statements and have been properly compiled on the pro
forma bases described therein, and in the opinon of the Company, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(g) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and Ernst & Young LLP, who have
each certified certain of the financial statements filed with the
Commission as part of the Registration Statement, are independent public
accountants as required by the Act and the Rules and Regulations.
(h) There is no action, suit, claim or proceeding
pending or, to the knowledge of the Company, threatened against the
Company or any of the Founding Companies before any court or
administrative agency or otherwise, which if determined adversely to the
Company or such Founding Company is reasonably likely to 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 the Founding Companies, taken as a whole, or
to prevent the consummation of the transactions contemplated hereby except
as set forth in the Registration Statement.
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(i) Each of the Company and the Founding Companies has
good and marketable title to all of its properties and assets reflected in
its financial statements (or as described in the Registration Statement)
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 which are
not material in amount. Each of the Company and the Founding Companies
occupies its leased properties under valid and binding leases conforming
in all material respects to the description thereof set forth in the
Registration Statement.
(j) Each of the Company and the Founding Companies has
filed all Federal, state, local and foreign income tax returns which have
been required to be filed and have paid all taxes indicated by said
returns and all assessments received by it or any of them to the extent
that such taxes have become due and are not being contested in good faith.
All tax liabilities have been adequately provided for in the financial
statements of the Company and the Founding Companies, as applicable.
(k) 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 the Founding Companies, 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 Founding Companies,
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. Neither the Company nor 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.
(l) Neither the Company nor any of the Founding
Companies is, or with the giving of notice or lapse of time or both, will
be, in violation of or in default under its Charter or By-Laws or 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 which default is of material significance in
respect of the condition (financial or otherwise) of the Company and the
Founding Companies, taken as a whole, or the business, management,
properties, assets, rights, operations, condition (financial or otherwise)
or prospects of the Company and the Founding Companies, 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 material breach of any of the terms
or provisions of, or constitute a material default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which
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the Company or any of the Founding Companies is a party, or of the Charter
or By-Laws of the Company or any of the Founding Companies or any order,
rule or regulation applicable to the Company or any of the Founding
Companies of any court or, assuming compliance with all applicable state
securities or blue sky laws, of any regulatory body or administrative
agency or other governmental body having jurisdiction.
(m) Each material 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 Commission, the
National Association of Securities Dealers, Inc. (the "NASD") or such
additional steps as may be necessary to qualify the Shares for public
offering by the Underwriters under state securities or Blue Sky laws) has
been obtained or made and is in full force and effect.
(n) The Company and each of the Founding Companies hold
all material licenses, certificates and permits from governmental
authorities which are necessary to the conduct of their businesses; and
neither the Company nor any of the Founding Companies has infringed any
patents, patent rights, trade names, trademarks or copyrights, which
infringement is material to the business of the Company or such Founding
Company. 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 or any of the Founding Companies.
(o) Neither the Company, nor to the Company's best
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 designed to cause or result in, or which has constituted or which
might 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.
(p) Neither the Company nor any of the Founding
Companies is an "investment company" within the meaning of such term under
the Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
(q) The Company and each of the Founding Companies
maintain 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
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assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(r) The Company and each of the Founding Companies
carry, or are covered by, insurance in such amounts and covering such
risks as 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.
(s) The Company and each of the Founding Companies are
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 or any of the Founding Companies would have any
liability; neither the Company nor any of the Founding Companies has
incurred nor expects to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, 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 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 action or by failure to act,
which would cause the loss of such qualification.
2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to sell to the Underwriters and the Underwriters,
severally and not jointly, agree to purchase from the Company, at a purchase
price per share of $_______, the number of Firm Shares set forth opposite the
respective names of the Underwriters in Schedule I hereto plus any additional
number of Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of
certificates for, the Shares shall be made at the office of Bear, ▇▇▇▇▇▇▇ & Co.
Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, or at such other place as
shall be agreed upon by you and the Company, at 10:00 A.M. on the third or
fourth business day (as permitted under Rule 15c6- 1 under the Exchange Act)
(unless postponed in accordance with the provisions of Section 9 hereof)
following the date of the effectiveness of the Registration Statement (or, if
the Company has elected to rely upon Rule 430A of the Regulations, the third or
fourth business day (as permitted under Rule 15c6-1 under the Exchange Act)
after the determination of the initial public offering price of the Shares), or
such other time not later than ten business days after such date as shall be
agreed upon by you and the Company (such time and date of payment and delivery
being herein called the "Closing Date"). Payment shall be made to the
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Company by wire transfer in same day funds, against delivery to you for the
respective accounts of the Underwriters of certificates for the Shares to be
purchased by them. Certificates for the Shares shall be registered in such name
or names and in such authorized denominations as you may request in writing at
least two full business days prior to the Closing Date. The Company will permit
you to examine and package such certificates for delivery at least one full
business day prior to the Closing Date.
(c) In addition, the Company hereby grants to the Underwriters
the option to purchase up to 825,000 Additional Shares at the same purchase
price per share to be paid by the Underwriters to the Company for the Firm
Shares as set forth in this Section 2, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriters. This option may
be exercised at any time, in whole or in part, on or before the thirtieth day
following the date of the Prospectus, by written notice by you to the Company.
Such notice shall set forth the aggregate number of Additional Shares as to
which the option is being exercised and the date and time, as reasonably
determined by you, when the Additional Shares are to be delivered (such date and
time being herein sometimes referred to as the "Additional Closing Date");
PROVIDED, HOWEVER, that the Additional Closing Date shall not be earlier than
the Closing Date or earlier than the second full business day after the date on
which the option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 9 hereof). Certificates for the Additional Shares shall be registered in
such name or names and in such authorized denominations as you may request in
writing at least two full business days prior to the Additional Closing Date.
The Company will permit you to examine and package such certificates for
delivery at least one full business day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter shall
be the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto (or such number increased as set forth
in Section 9 hereof) bears to 5,500,000, subject, however, to such adjustments
to eliminate any fractional shares as you in your sole discretion shall make.
Payment for the Additional Shares shall be made by wire transfer in
same day funds at the offices of Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, or such other location as may be mutually acceptable,
upon delivery of the certificates for the Additional Shares to you for the
respective accounts of the Underwriters.
3. OFFERING. Upon your authorization of the release of the Firm
Shares, the Underwriters propose to offer the Shares for sale to the public upon
the terms set forth in the Prospectus.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with
the Underwriters that:
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(a) The Company will (A) use its 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, and (B) not file any amendment to the Registration Statement
or supplement to the Prospectus 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 which is not
in compliance with the Rules and Regulations.
(b) 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 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.
(c) The Company will cooperate with the Representatives
in endeavoring to qualify 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 in effect for so long a period as the
Representatives may reasonably request for distribution of the Shares.
(d) 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, three signed, xeroxed
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
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Statement (including such number of copies of the exhibits filed therewith
that may reasonably be requested), including any documents incorporated by
reference therein, and of all amendments thereto, as the Representatives
may reasonably request.
(e) The Company will comply with the Act and the Rules
and Regulations and the Securities Exchange Act of 1934, as amended (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 or in the reasonable opinion of the Underwriters,
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 prepare and file with the
Commission an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that 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 the
law.
(f) 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.
(g) The Company will, for a period of five years from
the Closing Date, deliver to the Underwriters copies of annual reports and
copies of all other documents, reports and information furnished by the
Company to its stockholders 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, which are not
consolidated in the Company's financial statements.
(h) No offering, sale, short sale or other disposition
of any shares of Common Stock of the Company or other securities
convertible into or exchangeable or exercisable for shares of Common Stock
or derivative of Common Stock (or agreement for such) will be made for a
period of 180 days after the date of the Prospectus, directly or
indirectly, by the Company otherwise than hereunder or with the prior
written consent of
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Bear, ▇▇▇▇▇▇▇ & Co. Inc., except that the Company may, without such
consent, issue shares (i) upon exercise of options granted under its stock
option plans, (ii) upon exercise of warrants outstanding on the date of
this Agreement, (iii) in connection with acquisitions of businesses, (iv)
in connection with conversion of shares of Restricted Common Stock to
Common Stock or (v) pursuant to employee benefit or compensation plans
existing on the date hereof.
(i) The Company will use its best efforts to list,
subject to notice of issuance, the Shares on the New York Stock Exchange.
(j) The Company has caused each executive officer and
director of the Company to furnish to you, on or prior to the date of this
Agreement, a letter or letters, in form and substance satisfactory to the
Underwriters, pursuant to which each such person has agreed not to offer,
sell, sell short or otherwise dispose of any shares of Common Stock of the
Company owned by such person (or as to which such person has the right to
direct the disposition of) or request the registration for the offer or
sale of any of the foregoing for a period of 180 days after the date of
the Prospectus, directly or indirectly, except with the prior written
consent of Bear, ▇▇▇▇▇▇▇ & Co. Inc. ("Lockup Agreements").
(k) The Company will: (i) use its best efforts to
satisfy all conditions to the consummation of the Founding Company Mergers
as set forth in the agreements with respect thereto, (ii) use its best
efforts to cause each other party to such agreements to satisfy all
conditions to the consummation of the Founding Company Mergers, and (iii)
promptly notify the Underwriters of the occurence of any event which may
result in the non-consummation of any of the Founding Company Mergers on
the Closing Date.
(l) The Company shall apply the net proceeds of its sale
of the Shares as set forth in the Prospectus and shall 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.
(m) The Company shall not 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 or any of the Founding Companies to
register as an investment company under the Investment Company Act of
1940, as amended (the "1940 Act").
(n) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a
registrar for the Common Stock.
(o) The Company will not take, directly or indirectly,
any action designed to cause or result in, or that has constituted or
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company.
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5. PAYMENT OF EXPENSES. Whether or not the transactions contemplated
in this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including those in connection with (i)
preparing, printing, duplicating, filing and distributing the Registration
Statement, as originally filed and all amendments thereof (including all
exhibits thereto), any preliminary prospectus, the Prospectus and any amendments
or supplements thereto (including, without limitation, fees and expenses of the
Company's accountants and counsel), the underwriting documents (including this
Agreement, the Agreement Among Underwriters and the Selling Agreement) and all
other documents related to the public offering of the Shares (including those
supplied to the Underwriters in quantities as hereinabove stated), (ii) the
issuance, transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) listing the Shares on the New
York Stock Exchange, (iv) filing fees of the Commission and the National
Association of Securities Dealers, Inc.; (v) the cost of printing certificates
representing the Shares and (vi) the cost and charges of any transfer agent or
registrar.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 6 "Closing Date" shall refer to the
Closing Date for the Firm Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Piper & Marbury L.L.P.
("Underwriters' Counsel") pursuant to this Section 6 of any misstatement or
omission, to the performance by the Company of its 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, 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 or the Additional Closing Date, as the case may be, which
would prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing Date or the
Additional Closing Date, as the case may be, the opinion of ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ L.L.P., counsel for the Company, dated the Closing Date or the
Additional Closing Date, as the case
- 12 -
may be, addressed to the Underwriters (and stating that it may be relied upon by
counsel to the Underwriters) to the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and authority to
own or lease its properties and conduct its business as described in
the Registration Statement; each of the Founding Companies has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
corporate power and authority to own or lease its properties and
conduct its business; the Company and each of the Founding Companies
are duly qualified to transact business in each of the jurisdictions
set forth on a schedule to such opinion; and, upon consummation of
the Founding Company Mergers, the outstanding shares of capital stock
of each of the Founding Companies will have been duly authorized and
validly issued and will be fully paid and non-assessable and will be
owned by the Company; and, to the best of such counsel's knowledge,
the outstanding shares of capital stock of each of the Founding
Companies will be owned by the Company, free and clear of all liens,
encumbrances and 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 of or other ownership interests in any of the Founding
Companies will be outstanding.
(ii) The Company has authorized capital
stock as set forth under the caption "Capitalization" in the
Prospectus; the authorized shares of the Company's Preferred Stock
and Common Stock have been duly authorized; the outstanding shares of
the Company's Common Stock have been duly authorized and validly
issued and are fully paid and non-assessable; all of the Shares
conform to the description thereof contained in the Prospectus; the
certificates for the Shares, assuming they are in the form filed with
the Commission, are in due and proper form; the Firm Shares and
Option Shares, if any, to be sold by the Company pursuant to this
Agreement and the shares of Common Stock of the Company to be issued
in connection with the Founding Company Mergers have been duly
authorized and will be validly issued, fully paid and non-assessable
when issued and paid for as contemplated by this Agreement; and no
preemptive rights of stockholders exist under statute or under
agreements known to such counsel with respect to any of the Shares or
the shares to be issued in the Founding Company Mergers or the issue
or 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
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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, which 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 shares of Common
Stock or other 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
- 14 -
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 comply as to form
in all material respects with the requirements of the Act and the
applicable rules and regulations thereunder (except that such counsel
need express no opinion as to the financial statements, notes thereto
and related schedules and other financial and statistical information
included therein or any information furnished by the Underwriters for
use therein).
(vi) The statements under the captions
"Business Regulation," "Business Legal Proceedings," "Management
Executive Compensation; Employment Agreements;
Covenants-not-to-Compete," "Management Long-Term Incentive
Compensation Plan," "Certain Transactions," "Description of Capital
Stock" and "Shares Eligible for Future Sale" in the Prospectus,
insofar as such statements constitute a summary of documents referred
to therein or matters of law, are accurate summaries and fairly
present in all material respects the information called for with
respect to such documents and matters.
(vii) Each of the Agreements and Plan or
Reorganization with respect to the Founding Company Mergers (which
have been filed with the Commission as exhibits to the Registration
Statement) have been duly authorized, executed and delivered by the
Company and constitutes the valid binding obligation of the Company;
the Certificates or Articles of Merger referred to in such Agreements
and Plans of Reorganization, assuming the due filing thereof with the
appropriate regulatory authorities, will cause the statutory merger
of each of the Founding Companies with the respective subsidiaries of
the Company that are parties thereto.
(viii) Such counsel does not know of any
contracts or documents required to be filed as exhibits to the
Registration Statement or described in the Registration Statement or
the Prospectus which are not so filed or described as required, and
the descriptions of such contracts and documents required to be
described in the Registration Statement or the Prospectus are correct
in all material respects.
(ix) Such counsel knows of no material
legal or governmental proceedings pending or threatened against the
Company or any of the Founding Companies except as set forth in the
Prospectus.
- 15 -
(x) 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, or, in any respect material to
the Company and the Founding Companies, taken as a whole, any
agreement or instrument known to such counsel to which the Company or
any of the Founding Companies is a party or by which the Company or
any of the Founding Companies may be bound.
(xi) This Agreement has been duly
authorized, executed and delivered by the Company.
(xii) 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 NASD or as required by State securities and
Blue Sky laws as to which such counsel need express no opinion),
except such as have been obtained or made, specifying the same.
(xiii) The Company is not, and will not
become, as a result of the consummation of the transactions
contemplated by this Agreement, and application of the net proceeds
therefrom as described in the Prospectus, required to register as an
investment company under the 1940 Act.
In rendering such opinion, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ L.L.P. may
provide that its opinion is limited to matters governed by the laws of
Texas and the General Corporation law of the State of Delaware, and the
Federal securities laws of the United States and may rely on counsel to
one or more of the Founding Companies with respect to matters related to
the Founding Companies, provided that, in lieu of such reliance, ▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇ L.L.P. may provide separate opinions of such counsel so long
as such opinions are addressed to the Underwriters, and further provided,
that, in each case, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ L.L.P. shall state that they
believe that they and the Underwriters are justified in relying on such
other counsel. In addition to the matters set forth above, the opinion of
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ L.L.P. shall also include a statement of belief 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)
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 Additional Closing Date, as
the case may be, contained an untrue statement of a material fact or
omitted to state a material fact
- 16 -
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, schedules or
other financial and statistical information therein). With respect to such
statement of belief, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ L.L.P. may state that their
belief is based upon the procedures set forth therein, but is without
independent check and verification.
(c) The Representatives shall have received from Piper &
Marbury L.L.P., counsel for the Underwriters, an opinion dated the Closing
Date or the Additional Closing Date, as the case may be, substantially to
the effect specified in subparagraphs (ii), (iii), (iv), and (xi) of
Paragraph (b) of this Section 6, and that the Company is a duly organized
and validly existing corporation under the laws of the State of Delaware.
In rendering such opinion, Piper & Marbury L.L.P. may rely as to the
matters relating to the laws of the States other than Maryland and
Delaware on the opinions of counsel referred to in Paragraph (b) 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 which 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 under the Act) 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 Additional 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, schedules and
statistical information therein). With respect to such statement, Piper &
Marbury L.L.P. may state that their belief is based upon the procedures
set forth therein, but is without independent check and verification.
(d) The Representatives shall have received, on the date
hereof, the Closing Date and the Additional Closing Date, as the case may
be, letters dated the date hereof, the Closing Date or the Additional
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 of the Company and
the Founding Companies 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 such financial statements and certain financial and statistical
information contained in the Registration Statement and Prospectus.
- 17 -
(e) The Representatives shall have received, on the date
hereof, the Closing Date and the Additional Closing Date, as the case may
be, letters dated the date hereof, the Closing Date or the Additional
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, 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 of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Co. 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 such
financial statements and certain financial and statistical information
contained in the Registration Statement and Prospectus.
(f) The Representatives shall have received on the
Closing Date or the Additional Closing Date, as the case may be, a
certificate or certificates of the Company and signed by the Chief
Executive Officer and the Chief Financial Officer of the Company to the
effect that, as of the Closing Date or the Additional Closing Date, as the
case may be:
(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
material respects as of the Closing Date or the Additional 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) As of the effective date of the
Registration Statement, the statements contained in the Registration
Statement were true and correct in all material respects, and such
Registration Statement and Prospectus did not 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 which
should have been set forth in a supplement to or an amendment of the
Prospectus which has not been so set forth in such supplement or
amendment; and
- 18 -
(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 or any of the
Subsidiaries or the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or
prospects of the Company or any of the Subsidiaries, whether or not
arising in the ordinary course of business, except as set forth in,
or contemplated by, the Prospectus or as described in such
certificate.
(g) The Company 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.
(h) The Firm Shares and Option Shares, if any, shall
have been approved for designation upon notice of issuance on the New York
Stock Exchange.
(i) The Lockup Agreements described in Section 4(j)
shall be in full force and effect.
- 19 -
(j) Each of the Founding Company Mergers shall have been
completed upon the terms set forth in the Prospectus simultaneously with
the closing of the purchase of the Firm Shares by the Underwriters.
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 satisfactory to the Representatives and to Piper & Marbury L.L.P.,
counsel for the Underwriters, in their reasonable judgment.
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
Underwriters by notifying the Company of such termination in writing or by
telegram at or prior to the Closing Date or the Additional Closing Date, as the
case may be.
In such event, 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. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), against any and all losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the registration
of the Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have including under this Agreement.
(b) Each Underwriter severally, and not jointly, agrees to
indemnify and hold harmless the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statement, and each other person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against
any losses, liabilities, claims, damages and expenses whatsoever as
- 20 -
incurred (including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), jointly or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Shares, as originally filed or any
amendment thereof, or any related preliminary prospectus or the Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through you
expressly for use therein; PROVIDED, HOWEVER, that in no case shall any
Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder. This indemnity will be in addition to any liability which any
Underwriter may otherwise have including under this Agreement. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page and in the section under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing by or on behalf of any
Underwriter expressly for use in the registration statement relating to the
Shares as originally filed or in any amendment thereof, any related preliminary
prospectus or the Prospectus or in any amendment thereof or supplement thereto,
as the case may be.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the
- 21 -
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying parties.
Anything in this subsection to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its written consent; PROVIDED, HOWEVER, that such consent was not
unreasonably withheld.
8. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company and
the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company any
contribution received by the Company from persons, other than the Underwriters,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, officers of the Company who signed the Registration Statement and
directors of the Company) as incurred to which the Company and one or more of
the Underwriters may be subject, in such proportions as is appropriate to
reflect the relative benefits received by the Company and the Underwriters from
the offering of the Shares or, if such allocation is not permitted by applicable
law or indemnification is not available as a result of the indemnifying party
not having received notice as provided in Section 7 hereof, in such proportion
as is appropriate to reflect not only the relative benefits referred to above
but also the relative fault of the Company and the Underwriters in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (x) the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company and (y) the underwriting discounts and commissions
received by the Underwriters, respectively, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company and
of the Underwriters 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 8 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 8, (i) in no case shall any Underwriter be liable or
responsible for any amount in excess of the underwriting discount applicable to
the Shares purchased by such Underwriter hereunder, and (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. Notwithstanding the provisions of this Section 8
and the preceding sentence,
- 22 -
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 that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. For
purposes of this Section 8, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
shall have the same rights to contribution as such Underwriter, and each person,
if any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to clauses
(i) and (ii) of this Section 8. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 8 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; PROVIDED, HOWEVER, that such consent was not unreasonably
withheld.
9. DEFAULT BY AN UNDERWRITER.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such default relates
do not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to the respective proportions which
the numbers of Firm Shares set forth opposite their respective names in Schedule
I hereto bear to the aggregate number of Firm Shares set forth opposite the
names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of
the Firm Shares or Additional Shares, as the case may be, you may in your
discretion arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within 5 calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 9, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Company to sell the Additional Shares shall thereupon terminate, without
liability on the part of the Company with respect thereto (except in each case
as provided in Section 5, 7(a) and 8 hereof) or the Underwriters, but nothing in
this Agreement shall relieve a defaulting Underwriter or Underwriters of its or
their liability, if any, to the other Underwriters and the Company for damages
occasioned by its or their default hereunder.
- 23 -
(c) In the event that the Firm Shares or Additional Shares to
which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Company shall have the right to postpone the Closing Date or
Additional Closing Date, as the case may be for a period, not exceeding five
business days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the opinion
of Underwriters' Counsel, may thereby be made necessary or advisable. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 9 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares and Additional Shares.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations
and warranties, covenants and agreements of the Underwriters and the Company
contained in this Agreement, including the agreements contained in Section 5,
the indemnity agreements contained in Section 7 and the contribution agreements
contained in Section 8, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter or any
controlling person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling person thereof, and shall survive
delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8 and 11(d) hereof shall survive the termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.
11. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective, upon the later of
when (i) you and the Company shall have received notification of the
effectiveness of the Registration Statement or (ii) the execution of this
Agreement. If either the initial public offering price or the purchase price per
Share has not been agreed upon prior to 5:00 P.M., New York time, on the fifth
full business day after the Registration Statement shall have become effective,
this Agreement shall thereupon terminate without liability to the Company or the
Underwriters except as herein expressly provided. Until this Agreement becomes
effective as aforesaid, it may be terminated by the Company by notifying you or
by you notifying the Company. Notwithstanding the foregoing, the provisions of
this Section 11 and of Sections 1, 5, 7 and 8 hereof shall at all times be in
full force and effect.
(b) You shall have the right to terminate this Agreement at
any time prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing Date,
as the case may be, if (A) 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; or (B) if trading on the New York or American Stock Exchanges shall
have been suspended, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required, on
the New York or American Stock
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Exchanges by the New York or American Stock Exchanges or by order of the
Commission or any other governmental authority having jurisdiction; or (C) if a
banking moratorium has been declared by a state or federal authority or if any
new restriction materially adversely affecting the distribution of the Firm
Shares or the Additional Shares, as the case may be, shall have become
effective; or (D) (i) if the United States becomes engaged in hostilities or
there is an escalation of hostilities involving the United States or there is a
declaration of a national emergency or war by the United States or (ii) if there
shall have been such change in political, financial or economic conditions if
the effect of any such event in (i) or (ii) as in your judgment makes it
impracticable or inadvisable to proceed with the offering, sale and delivery of
the Firm Shares or the Additional Shares, as the case may be, on the terms
contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone, telex, or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by you, reimburse the Underwriters for all
out-of-pocket expenses (including the fees and expenses of their counsel),
incurred by the Underwriters in connection herewith.
12. NOTICES. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and , if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and confirmed
in writing, to such Underwriter c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇; if sent to the Company, shall
be mailed, delivered, or telegraphed and confirmed in writing to the Company,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
13. PARTIES. This Agreement shall insure solely to the benefit of,
and shall be binding upon, the Underwriters and the Company and the controlling
persons, directors, officers, employees and agents referred to in Section 7 and
8, and their respective successors and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Shares from any of the Underwriters.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
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If the foregoing correctly sets forth the understanding between you
and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
TRANSPORTATION COMPONENTS, INC.
By ___________________________________
T. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer
Accepted as of the date first above written
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
BT ALEX. ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
By _______________
On behalf of themselves and the other Underwriters named in Schedule I hereto.
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SCHEDULE I
NUMBER OF FIRM
NAME OF UNDERWRITER SHARES TO BE PURCHASED
------------------- ----------------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc
BT Alex. ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Total..................... 5,500,000
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SCHEDULE II
Shareholders subject to the lock-up provision
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