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EXHIBIT 1.2
1,300,000 SHARES
TEAM RENTAL GROUP, INC.
CLASS A COMMON STOCK
SUBSCRIPTION AGREEMENT
London, England
April [ ], 1997
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
ABN AMRO XXXXXXXXXX
XXXX. XXXXX & SONS INTERNATIONAL
XXXXXXXX & COMPANY SECURITIES, INC.,
c/o Credit Suisse First Boston (Europe) Limited ("CSFBEL")
Xxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx X00 0XX
Dear Sirs:
1. Introductory. Team Rental Group, Inc., a Delaware corporation
("Company"), proposes to issue and sell ("International Offering") to the
several Managers named in Schedule A hereto ("Managers") 1,300,000 shares
("International Firm Securities") of its Class A Common Stock ("Securities").
It is understood that the Company is concurrently entering into an
Underwriting Agreement, dated the date hereof ("Underwriting Agreement"), with
certain United States underwriters listed in Schedule A thereto (the "U.S.
Underwriters"), for whom Credit Suisse First Boston Corporation ("CSFBC"), ABN
AMRO Chicago Corporation, Alex. Xxxxx & Sons Incorporated and XxXxxxxx & Company
Securities, Inc. are acting as representatives (the "U.S. Representatives"),
relating to the concurrent offering and sale of 5,200,000 shares of Securities
(" U.S. Firm Securities") in the United States and Canada ("U.S. Offering" and,
together with the International Offering, the "Offerings").
In addition, the Company proposes to issue and sell (i) to the U.S.
Underwriters, at the option of the U.S. Underwriters, an aggregate of not more
than 780,000 additional shares of Securities ("U.S. Optional Securities") and
(ii) to the Managers, at the option of the Managers, an aggregate of not more
than 195,000 additional shares of Securities ("International Optional
Securities"). The U.S. Firm Securities and the U.S. Optional Securities are
hereinafter called the "U.S. Securities"; the International Firm Securities and
the International Optional Securities are hereinafter called the "International
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Securities"; the U.S. Firm Securities and the International Firm Securities are
hereinafter called the "Firm Securities"; the U.S. Optional Securities and the
International Optional Securities are hereinafter called the "Optional
Securities". The U.S. Securities and the International Securities are
collectively referred to as the "Offered Securities". To provide for the
coordination of their activities, the U.S. Underwriters and the Managers have
entered into an Agreement Between U.S. Underwriters and Managers which permits
them, among other things, to sell the Offered Securities to each other for
purposes of resale.
The Offered Securities are being issued and sold in connection with the
consummation of the transactions contemplated by stock purchase agreements, each
dated as of January 13, 1997 (the "Stock Purchase Agreements"), by and among the
Company, Ford Motor Company ("Ford"), Budget Rent a Car Corporation ("BRACC")
and the other stockholders of BRACC, pursuant to which the Company has
agreed, subject to certain conditions, to acquire all the capital stock of BRACC
(the "Acquisition"). In connection with the Acquisition and concurrently with
the consummation of the Offerings: (i) BRACC proposes to privately place $125.0
million aggregate principal amount of its __% Guaranteed Senior Notes due 2007
(the "Senior Notes"), (ii) the Company proposes to enter into new credit
facilities for fleet financings (the "New Fleet Financing Credit Agreements")
with an aggregate commitment of $1.3 billion, (iii) the Company proposes to
privately place $50.0 million aggregate principal amount of its __% Convertible
Subordinated Notes, Series B, due 2007 (the "Series B Notes") and (iv) the
Company will issue 4,500 shares of Series A Convertible Preferred Stock (the
"Series A Preferred Stock") to Ford as part of the consideration for the
Acquisition.
As used in Section 2 and Section 6(e) only of this Agreement,
references to (i) the term "Budget Group" mean Team Rental Group, Inc.,
including its subsidiaries after giving effect to the Acquisition (as defined
below); (ii) the term "Company" mean Team Rental Group, Inc. prior to the
Acquisition, on a stand-alone basis and excluding any subsidiaries; (iii) the
term "BRACC" mean Budget Rent a Car Corporation, prior to the Acquisition, on a
stand-alone basis and excluding any subsidiaries; (iv) the term "Resulting
Company" mean Team Rental Group, Inc. after giving effect to the Acquisition, on
a stand-alone basis and excluding any subsidiaries; and (v) the term
"Subsidiaries" mean all significant subsidiaries of the Resulting Company, as
defined in Rule 1-02(w) of Regulation S-X promulgated under the Securities Act
of 1933 (each of the Subsidiaries referred to in this clause (v), a
"Subsidiary").
The Company hereby agrees with the several Managers as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Managers that:
(a) A registration statement (No. 333-21691) relating to the
Offered Securities, including a form of prospectus relating to the U.S.
Securities and a form of prospectus relating to the International
Securities, has been filed with the Securities and Exchange Commission
("Commission") and either (i) has been declared effective under the
Securities Act of 1933 ("Act") and is not proposed to be amended or
(ii) is proposed to be amended by amendment or post-effective
amendment. If such registration statement (the "initial registration
statement") has been declared effective, either (A) an additional
registration statement (the "additional registration statement")
relating to the Offered Securities may have been filed with the
Commission pursuant to Rule 462(b) ("Rule 462(b)") under the Act and,
if so filed, has become
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effective upon filing pursuant to such Rule and the Offered Securities
all have been duly registered under the Act pursuant to the initial
registration statement and, if applicable, the additional registration
statement or (B) such an additional registration statement is proposed
to be filed with the Commission pursuant to Rule 462(b) and will become
effective upon filing pursuant to such Rule and upon such filing the
Offered Securities will all have been duly registered under the Act
pursuant to the initial registration statement and such additional
registration statement. If the Company does not propose to amend the
initial registration statement or if an additional registration
statement has been filed and the Company does not propose to amend it,
and if any post-effective amendment to either such registration
statement has been filed with the Commission prior to the execution and
delivery of this Agreement, the most recent amendment (if any) to each
such registration statement has been declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c)
("Rule 462(c)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement,
"Effective Time" with respect to the initial registration statement or,
if filed prior to the execution and delivery of this Agreement, the
additional registration statement means (i) if the Company has advised
CSFBEL that it does not propose to amend such registration statement,
the date and time as of which such registration statement, or the most
recent post-effective amendment thereto (if any) filed prior to the
execution and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c),
or (ii) if the Company has advised CSFBEL that it proposes to file an
amendment or post-effective amendment to such registration statement,
the date and time as of which such registration statement, as amended
by such amendment or post-effective amendment, as the case may be, is
declared effective by the Commission. If an additional registration
statement has not been filed prior to the execution and delivery of
this Agreement but the Company has advised CSFBEL that it proposes to
file one, "Effective Time" with respect to such additional registration
statement means the date and time as of which such registration
statement is filed and becomes effective pursuant to Rule 462(b).
"Effective Date" with respect to the initial registration statement or
the additional registration statement (if any) means the date of the
Effective Time thereof. The initial registration statement, as amended
at its Effective Time, including all information contained in the
additional registration statement (if any) and deemed to be a part of
the initial registration statement as of the Effective Time of the
additional registration statement pursuant to the General Instructions
of the Form on which it is filed and including all information (if any)
deemed to be a part of the initial registration statement as of its
Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act,
is hereinafter referred to as the "Initial Registration Statement". The
additional registration statement (if any), as amended at its Effective
Time, including the contents of the initial registration statement
incorporated by reference therein and including all information (if
any) deemed to be a part of the additional registration statement as of
its Effective Time pursuant to Rule 430A(b), is hereinafter referred to
as the "Additional Registration Statement". The Initial Registration
Statement and the Additional Registration Statement are hereinafter
referred to collectively as the "Registration Statements" and
individually as a "Registration Statement". The form of prospectus
relating to the U.S. Securities and the form of prospectus relating to
the International Securities, each as first filed with the Commission
pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under
the Act or (if no such filing is required) as included in the
Registration Statement, are hereinafter referred to as the "U.S.
Prospectus" and the "International
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Prospectus", respectively, and collectively as the "Prospectuses". No
document has been or will be prepared or distributed in reliance on
Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement: (i)
on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all material respects to
the requirements of the Act and the rules and regulations of the
Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (ii) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement conformed,
or will conform, in all material respects to the requirements of the
Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and (iii)
on the date of this Agreement, the Initial Registration Statement and,
if the Effective Time of the Additional Registration Statement is prior
to the execution and delivery of this Agreement, the Additional
Registration Statement each conforms, and at the time of filing of each
of the Prospectuses pursuant to Rule 424(b) or (if no such filing is
required) at the Effective Date of the Additional Registration
Statement in which the Prospectuses are included, each Registration
Statement and each of the Prospectuses will conform, in all material
respects to the requirements of the Act and the Rules and Regulations,
and none of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of
this Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and each of the
Prospectuses will conform in all material respects to the requirements
of the Act and the Rules and Regulations, none of such documents will
include any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading, and no Additional Registration
Statement has been or will be filed. The two preceding sentences do not
apply to statements in or omissions from a Registration Statement or
either of the Prospectuses based upon written information furnished to
the Company by any Manager through CSFBEL or by any U.S. Underwriter
through the U.S. Representatives specifically for use therein, it being
understood and agreed that the only such information is that described
as such in Section 7(b).
(c) Each of the Company, BRACC and each Subsidiary has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, with
corporate power and authority to own its properties and conduct its
business as described in the Registration Statement and the
Prospectuses, and is duly qualified to do business as a foreign
corporation in good standing (to the extent such concepts are
recognized in such jurisdictions) in all other jurisdictions in which
it owns or leases substantial properties or in which the conduct of its
business requires such qualification, except where the failure to so
qualify would not have a material adverse effect upon the condition
(financial or other), results of operations, business affairs or
business prospects of the Budget Group (a "Material Adverse Effect").
The Subsidiaries are listed on Schedule B hereto.
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(d) All of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued and is fully
paid and nonassessable; and the capital stock of each Subsidiary owned
by the Company or BRACC, directly or through subsidiaries, is owned
free from liens, encumbrances and defects.
(e) The Company's authorized capitalization is as set forth in
the Registration Statement and the Prospectuses; the Offered
Securities, the Series A Preferred Stock, and all the outstanding
shares of Class A Common Stock and Class B Common Stock of the Company,
par value $.01 per share ("Class B Common Stock") , have been duly
authorized; all outstanding shares of such capital stock of the Company
are, and, when the Offered Securities have been delivered and paid for
in accordance with this Agreement and the Subscription Agreement on
each Closing Date (as defined below), such Offered Securities will have
been, validly issued, fully paid and nonassessable and will conform to
the description thereof contained in the Prospectuses; and the Offered
Securities have been approved for listing on the New York Stock
Exchange subject to notice of issuance.
(f) Except for (i) the 4,500 shares of Series A Preferred
Stock, which are convertible into 4,500,000 shares of Class A Common
Stock, (ii) the 1,936,600 shares of Class B Common Stock, which are
convertible into 1,936,600 shares of Class A Common Stock, (iii) the
warrant held by BRACC to purchase 175,000 shares of Class A Common
Stock (the "BRACC Warrant"), (iv) the warrant held by NationsBank,
National Association (South) to purchase 187,500 shares of Class A
Common Stock (the "NationsBank Warrant"), (v) the options to purchase
729,850 shares of Class A Common Stock and Class B Common Stock issued
under the Company's 1994 Incentive Stock Option Plan (the "1994 Option
Plan"), (vi) the options to purchase 70,000 shares of Class A Common
Stock issued under the Company's 1994 Directors' Stock Option Plan (the
"1994 Directors' Plan"), (vii) the $80.0 million aggregate principal
amount of Series A Convertible Subordinated Notes of the Company (the
"Series A Notes"), which are convertible into 3,986,049 shares of Class
A Common Stock and (viii) the $50.0 million aggregate principal amount
of Series B Notes, which are convertible into 1,428,571 shares of Class
A Common Stock, each as described in the Registration Statement and the
Prospectuses, and except for the conditional rights to acquire
additional shares of Class A Common Stock contained in the agreement
dated October 20, 1995 among the Company, Team Rental of Southern
California, Inc., BRAC-OPCO, Inc., and Budget Rent a Car of Southern
California (the "OPCO Agreement"), there are no, and as of each Closing
Date (as defined in Section 3) there will be no, outstanding securities
or obligations (together, "Convertible Securities") of the Company, the
Resulting Company or any Subsidiary convertible into or exchangeable
for any capital stock of the Company, the Resulting Company or any
Subsidiary, respectively, rights, warrants or options (together,
"Rights") to subscribe for or purchase from the Company, the Resulting
Company or any Subsidiary any such capital stock or any such
Convertible Securities or obligations, or obligations of the Company,
the Resulting Company or any Subsidiary to issue Convertible Securities
or Rights.
(g) Except for (i) the rights of first refusal set forth in
the Share Exchange Agreement dated April 25, 1994, as amended on June
13, 1994 and July 5, 1994, among the Company, Xxxxx Xxxxxxx, Xxxxxxx
Xxxxxxx, Xxxxxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx and Xxxxxxx
Xxxxx, (ii) the rights of Xxxxx Xxxxxxx and Xxxxxx Xxxxxxx to receive
additional shares of Class A
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Common Stock, as set forth in the agreement, dated March 8, 1995, among
the Company, Team Rental of Connecticut, Inc., Rental Car Resources,
Inc., Xxxxx Xxxxxxx and Xxxxxx Xxxxxxx, (iii) the put right set forth
in the BRACC Warrant, (iv) the rights of first refusal held by BRACC
pursuant to certain of its franchise agreements with the Company, (v)
the rights of the parties to the OPCO Agreement and (vi) the rights of
Ford under the Stock Purchase Agreements, there are no preemptive or
other rights to subscribe for or purchase any shares of capital stock
issued by the Company, the Resulting Company or any Subsidiary. Except
for the transfer restrictions set forth in the Registration Rights
Agreements (as defined below), Section 5(i) of this Agreement, BRACC's
right to approve certain transfers of capital stock held by Messrs.
Miller, Kennedy, Congdon, Britton, Xxxxxx and Xxxxx pursuant to the
letter agreement dated May 5, 1994 among such officers and BRACC and
the voting restrictions set forth in the Shareholders' Agreement dated
October 20, 1995 among the Company, the holders of Class B Common Stock
and Budget Rent a Car of Southern California ("SOCAL"), there are, and
after giving effect to the Acquisition there will be, no restrictions
to which the Company or the Resulting Company is a party upon the
voting or transfer of, and no restrictions on the declaration or
payment of any dividend or distribution on, any shares of capital stock
of the Company, the Resulting Company, BRACC or any Subsidiary.
(h) No broker, finder, consultant or other person or entity is
entitled to any brokerage, finder's or other fee or commission in
connection with the issuance and sale of the Offered Securities, except
such fee or commission as may be provided to the Underwriters or the
Managers by the express terms of this Agreement.
(i) Except for certain agreements regarding registration
rights described in each of the Prospectuses and filed as exhibits to
the Registration Statement (collectively, the "Registration Rights
Agreements"), there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company or the Resulting Company to file a registration
statement under the Act with respect to any securities of the Company
or the Resulting Company owned or to be owned by such person or to
require the Company or the Resulting Company to include such securities
in the securities registered pursuant to a registration statement or in
any securities being registered pursuant to any other registration
statement filed by the Company or the Resulting Company under the Act;
and the Company has given proper notice to, or received written waivers
or demand notices from, each person holding such registration rights
pursuant to the Registration Rights Agreements.
(j) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this Agreement
or the Subscription Agreement in connection with the issuance and sale
of the Offered Securities by the Company, except such as have been
obtained and made under the Act and the Rules and Regulations and such
as may be required under state securities laws.
(k) The execution, delivery and performance of this Agreement
and the Subscription Agreement, and the issuance and sale of the
Offered Securities will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under (i) any
statute, rule, regulation or order of any governmental agency or body
or any court, domestic or foreign, having jurisdiction over the
Company, the Resulting Company or any Subsidiary or any of their
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properties, (ii) any agreement or instrument to which the Company, the
Resulting Company or any such Subsidiary is a party or by which the
Company, the Resulting Company or any such Subsidiary is bound or to
which any of the properties of the Company, the Resulting Company or
any such Subsidiary is subject, or (iii) the charter or by-laws of the
Company or any such Subsidiary, except in the case of clause (i) or
(ii), such breaches, violations or defaults that, individually or in
the aggregate, would not have a Material Adverse Effect. The Company
has full power and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement and the Subscription
Agreement, respectively.
(l) This Agreement and the Subscription Agreement have been
duly authorized, executed and delivered by the Company.
(m) The execution, delivery and performance by the Company,
the Resulting Company, BRACC and their respective subsidiaries of the
Stock Purchase Agreements, the New Fleet Financing Credit Agreements,
the purchase agreement and indenture for the Senior Notes (the "Senior
Notes Agreements") and the purchase agreement and indenture for the
Series B Notes (the "Series B Agreements") (to the extent a party
thereto) and the issuance and sale of the Senior Notes and the Series B
Notes will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (i) any statute, rule,
regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company, the
Resulting Company, BRACC or any Subsidiary or any of their respective
properties, (ii) any agreement or instrument to which the Company, the
Resulting Company, BRACC or any such Subsidiary is a party or by which
the Company, the Resulting Company, BRACC or any such Subsidiary is
bound or to which any of the respective properties of the Company, the
Resulting Company, BRACC or any such Subsidiary is subject, or (iii)
the charter or by-laws of the Company, BRACC or any such Subsidiary,
except in the case of clause (i) or (ii), such breaches, violations or
defaults that, individually or in the aggregate, would not have a
Material Adverse Effect. BRACC has the power and authority to
authorize, issue and sell the Senior Notes pursuant to the Senior Notes
Agreements. The Company has the power and authority to authorize, issue
and sell the Series B Notes pursuant to the Series B Agreements.
(n) The Stock Purchase Agreements have been duly authorized,
executed and delivered by each of the Company and BRACC and conform in
all material respects to the descriptions thereof in the Prospectuses.
The Senior Notes Agreements and the Series B Agreements have been duly
authorized, executed and delivered by BRACC and the Company,
respectively, and the parties thereto and conform in all material
respects to the descriptions thereof in the Prospectuses. The Stock
Purchase Agreements, the Senior Notes Agreements and the Series B
Agreements, assuming due execution and delivery by the other parties
thereto, constitute valid and legally binding obligations of the
Company and BRACC (as the case may be) and are enforceable in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, except that the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and the discretion of courts in
granting equitable remedies and except that the enforceability of any
rights to indemnity or contribution may be limited by federal or state
securities laws or by public policy.
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(o) The Company has delivered to CSFBC true and correct copies
of the Stock Purchase Agreements, in each case, in the form as
originally executed, and there have been no amendments or waivers
thereto or in the exhibits or schedules thereto other than those as to
which CSFBC shall have been advised.
(p) The Company, BRACC and the Subsidiaries have (i) such
ownership and possession rights with respect to their respective assets
and properties as are necessary for the continuing conduct of their
respective businesses, as described in the Registration Statement and
the Prospectuses, except where the failure to possess any such rights
would not, individually or in the aggregate, have a Material Adverse
Effect, and (ii) peaceful and undisturbed possession under all material
leases to which the Company, BRACC or any such Subsidiary is a party as
lessee; and all material leases to which the Company, BRACC or any such
Subsidiary is a party are in full force and effect; none of the
Company, BRACC or any Subsidiary has been notified that a lease is
invalid or unenforceable, and no default by the Company, BRACC or such
Subsidiary has occurred and is continuing thereunder, except for any
defaults that would not, individually or in the aggregate, have a
Material Adverse Effect.
(q) The Company, BRACC and the Subsidiaries hold such
licenses, certificates and permits from governmental entities and
authorities as are necessary to the conduct of the business
of the Company, the Resulting Company, BRACC and the Subsidiaries as
described in the Registration Statement and the Prospectuses, the
failure of which to obtain would have a Material Adverse Effect; the
Company, BRACC and the Subsidiaries have fulfilled and performed all of
the material obligations necessary to maintain such licenses,
certificates and permits, except where the failure to perform such
obligations would not have a Material Adverse Effect; the Company,
BRACC and the Subsidiaries conduct their business in compliance with
all applicable federal, state and local laws and regulations, except
where the failure to perform such obligations would not have a Material
Adverse Effect; and there is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or investigation that
could lead to the revocation, termination or suspension of any such
license, certificate or permit.
(r) To the knowledge of the Company, none of the Company,
BRACC or any Subsidiary is engaged in any unfair labor practice that
would have a Material Adverse Effect. There is no unfair labor practice
complaint pending or, to the best knowledge of the Company, threatened
against the Company, BRACC or any Subsidiary before the National Labor
Relations Board, and no grievance or arbitration proceeding arising out
of or under collective bargaining agreements is pending or, to the
knowledge of the Company, threatened except such complaints or
proceedings as would not have a Material Adverse Effect. No strike,
labor dispute, slowdown or stoppage is pending or, to the knowledge of
the Company after due inquiry, threatened against the Company, BRACC or
any Subsidiary.
(s) The Company, the Resulting Company, BRACC and the
Subsidiaries own, possess or can acquire on reasonable terms, adequate
trademarks and trade names necessary to conduct the business now
operated by them, or presently employed by them, and have not received
any notice of infringement of or conflict with asserted rights of
others with respect to such rights that, if determined adversely to the
Company, the Resulting Company, BRACC or any such Subsidiary, would,
individually or in the aggregate, have a Material Adverse Effect.
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(t) To the knowledge of the Company, each of the Company,
BRACC and the Subsidiaries has obtained all permits, licenses and other
authorizations and has made all registrations and other submissions
that are required under all applicable federal, state and local laws
relating to the protection of health, safety or the environment
including but not limited to the Federal Water Pollution Control Act
(33 U.S.C. ss. 1251 et seq.), Resource Conservation and Recovery Act
(42 U.S.C. ss.6901 et seq.), Safe Drinking Water Act (21 U.S.C. ss.349,
42 U.S.C. xx.xx. 300f - 300j), Toxic Substances Control Act (15 U.S.C.
ss.2601 et seq.), Clean Air Act (42 U.S.C. ss.7401 et seq.),
Comprehensive Environmental Response, Compensation and Liability Act
(42 U.S.C. ss.9601 et seq.), any laws relating to emissions,
discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or
wastes into the environment (including but not limited to ambient air,
surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances or wastes, and any
regulation, code, plan, order, decree, judgment, injunction, notice or
demand letter issued, entered, promulgated or approved thereunder
(collectively, the "Environmental Laws"), except to the extent that
failure to have any such permit, license or authorization, or to have
made such registration or submission, individually or in the aggregate,
does not have a Material Adverse Effect.
(u) Except as described in the Registration Statement and the
Prospectuses, each of the Company, BRACC and the Subsidiaries has been
and is in compliance with all terms and conditions of any required
permits, licenses and authorization, and has been and is in compliance
with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables
contained in the Environmental Laws, except to the extent failure to
comply would not have a Material Adverse Effect.
(v) To the best knowledge of the Company, (i) there are no
past or present events, conditions, circumstances, activities,
practices, incidents or actions, or plans relating to the
business as presently being conducted by the Company, BRACC or the
Subsidiaries, that interfere with or prevent compliance or continued
compliance with the Environmental Laws, or that would be reasonably
likely to give rise to any legal liability (whether statutory or at
common law) or otherwise would be reasonably likely to form the basis
of any claim, action, demand, suit, proceeding, hearing, lien, notice
of violation, study, investigation, remediation or cleanup
(collectively, "Claims") based on or related to any Environmental Law
or the generation, manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling, or the emission,
discharge, release into the workplace, the community or the environment
of any pollutant, contaminant, chemical or industrial, toxic or
hazardous substance or waste, except for any liabilities or any Claims
that will not, individually or in the aggregate, have a Material
Adverse Effect, and (ii) except as disclosed in the Registration
Statement and the Prospectuses, no underground or aboveground storage
tanks are located on property owned or leased by the Company, BRACC or
the Subsidiaries.
(w) There are no Claims pending or, to the best knowledge of
the Company, threatened against the Company, BRACC or any Subsidiary
based on or related to any Environmental Law or the generation,
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge, release
into the workplace, the community or
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the environment of any pollutant, contaminant, chemical or industrial,
toxic, or hazardous substance or waste, and none of the Company, BRACC
or any Subsidiary has received any notice of violation or potential
liability based on or related to any Environmental Law or the
generation, manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling, or the emission, discharge,
release into the workplace, the community or the environment of any
pollutant, contaminant, chemical or industrial, toxic, or hazardous
substance or waste, except for any Claim or notice that will not,
individually or in the aggregate, have a Material Adverse Effect.
(x) Except as disclosed in the Registration Statement and the
Prospectuses, there are no pending actions, suits or proceedings
against or affecting the Company, BRACC, any Subsidiary or any of their
respective properties that, if determined adversely to the Company, the
Resulting Company, BRACC or such Subsidiary, would have a Material
Adverse Effect, or would materially and adversely affect the ability of
the Company or the Resulting Company to perform its obligations under
this Agreement or the Subscription Agreement, or which are otherwise
material in the context of the sale of the Offered Securities; and no
such actions, suits or proceedings are threatened or, to the Company's
knowledge, contemplated. All pending legal or governmental proceedings
to which the Company, BRACC or any Subsidiary is a party or of which
any of their property or assets is the subject, including ordinary
routine litigation incidental to the business of the Company or BRACC,
are, considered in the aggregate, not material.
(y) The financial statements of the Company included in the
Registration Statement and the Prospectuses comply in all material
respects with the requirements of the Act and the Rules and Regulations
applicable to a registration statement on Form S-1 and have been
prepared, and fairly present the financial position, results of
operations and cash flows of the Company and its subsidiaries
consolidated at the respective dates and for the respective periods
indicated, in accordance with generally accepted accounting principles
consistently applied throughout such period. The financial information
and financial data set forth in the Registration Statements and the
Prospectuses under the captions "Prospectus Summary--Summary Operating
Data for the Budget System," "Prospectus Summary--Summary Financial
Data of TEAM," "Capitalization" (exclusive of pro forma data contained
therein), "Pro Forma Consolidated Financial Statements of Budget
Group," "Selected Financial Data of TEAM" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations of TEAM"
are derived from the accounting records of the Company and its
subsidiaries, and are a fair presentation of the data purported to be
shown.
(z) The financial statements of BRACC included in the
Registration Statement and the Prospectuses comply in all material
respects with the requirements of the Act and the Rules and Regulations
applicable to a registration statement on Form S-1 and have been
prepared, and fairly present the financial position, results of
operations and cash flows of BRACC and its subsidiaries consolidated at
the respective dates and for the respective periods indicated, in
accordance with generally accepted accounting principles consistently
applied throughout such period. The financial information and financial
data set forth in the Registration Statements and the Prospectuses
under the captions "Prospectus Summary--Summary Operating Data for the
Budget System," "Prospectus Summary--Summary Financial Data of BRACC,"
"Capitalization"
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(exclusive of pro forma data contained therein), "Pro Forma
Consolidated Financial Statements of Budget Group," "Selected Financial
Data of BRACC" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations of BRACC" are derived from the
accounting records of BRACC and its subsidiaries, and are a fair
presentation of the data purported to be shown.
(aa) The pro forma financial data of the Resulting Company and
its subsidiaries contained in the Registration Statement have been and
the Prospectuses have been prepared in accordance with Article XI of
Regulation S-X under the Act; the assumptions used in the preparation
thereof (taken as a whole) are reasonable, and the adjustments used
therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(bb) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectuses, (i) there has been no material adverse change, nor any
development involving a prospective material adverse change, in the
condition (financial or other), results of operations, business affairs
or business prospects of the Company and its subsidiaries, or BRACC and
its subsidiaries, each taken as a whole, whether or not arising in the
ordinary course of business, and (ii) there have been no transactions
entered into by the Company or BRACC or any of their respective
subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries, or
BRACC and its subsidiaries, each taken as a whole.
(cc) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectuses, the Resulting
Company will not be an "investment company" as defined in the
Investment Company Act of 1940.
(dd) There is no document or contract of a character required
to be described in the Registration Statement or the Prospectuses, or
to be filed as an exhibit to the Registration Statement, that is not
described or filed as required.
Any certificate signed by any officer of the Company and delivered to
the Underwriters or to counsel for the Underwriters pursuant to this Agreement
shall be deemed a representation and warranty by the Company to the Underwriters
as to the matters covered thereby.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Managers, and the Managers agree, severally and not jointly, to purchase from
the Company, at a purchase price of U.S.$ per share, the respective numbers
of shares of International Firm Securities set forth opposite the names of the
Managers in Schedule A hereto.
The Company will deliver the International Firm Securities to CSFBEL
for the accounts of the Managers, at such office in New York, New York as the
Managers may designate, against payment of the purchase price by wire transfer
of immediately available Federal (same day) funds payable to the Company, such
payment to be made to an account designated by the Company at a bank acceptable
to CSFBC, and confirmed at the office of King & Spalding, 191 Peachtree St.,
N.E., Atlanta, Georgia
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30303, at 10:00 A.M., Atlanta time, on [ ], or at such other time not later than
seven full business days thereafter as CSFBC and the Company determine, such
time being herein referred to as the "First Closing Date". For purposes of Rule
15c6-1 under the Securities Exchange Act of 1934, the First Closing Date (if
later than the otherwise applicable settlement date) shall be the settlement
date for payment of funds and delivery of securities for all the Offered
Securities sold pursuant to the U.S. Offering and the International Offering.
The certificates for the U.S. Firm Securities so to be delivered will be in
definitive form, in such denominations and registered in such names as CSFBC
requests and will be made available for checking and packaging at least 24 hours
prior to the First Closing Date at such office in New York, New York as you may
designate.
In addition, upon written notice from CSFBC given to the Company from
time to time not more than 30 days subsequent to the date of the Prospectuses,
the Managers may purchase all or less than all of the International Optional
Securities at the purchase price per Security to be paid for the International
Firm Securities. The International Optional Securities to be purchased by the
Managers on any Optional Closing Date shall be in the same proportion to all the
Optional Securities to be purchased by the Managers and U.S. Underwriters on
such Optional Closing Date as the International Firm Securities bear to all the
Firm Securities. The Company agrees to sell to the Managers such International
Optional Securities and the Managers agree, severally and not jointly, to
purchase such International Optional Securities. Such International Optional
Securities shall be purchased for the account of each Manager in the same propor
tion as the number of shares of International Firm Securities set forth opposite
such Manager's name bears to the total number of shares of International Firm
Securities (subject to adjustment by CSFBC to eliminate fractions) and may be
purchased by the Managers only for the purpose of covering over-allotments made
in connection with the sale of the International Firm Securities. No Optional
Securities shall be sold or delivered unless the International Firm Securities
and the U.S. Firm Securities previously have been, or simultaneously are, sold
and delivered. The right to purchase the Optional Securities or any portion
thereof may be exercised from time to time and to the extent not previously
exercised may be surrendered and terminated at any time upon notice by CSFBC on
behalf of the Managers and the U.S. Underwriters to the Company. It is
understood that CSFBC is authorized to make payment for and accept delivery of
such Optional Securities on behalf of the U.S. Underwriters and Managers
pursuant to the terms of CSFBC's instructions to the Company.
Each time for the delivery of and payment for the International
Optional Securities, being herein referred to as an "Optional Closing Date",
which may be the First Closing Date (the First Closing Date and each Optional
Closing Date, if any, being sometimes referred to as a "Closing Date"), shall be
determined by CSFBC but shall be not later than three full business days after
written notice of election to purchase Optional Securities is given. The Company
will deliver the International Optional Securities being purchased on each
Optional Closing Date to CSFBEL for the accounts of the several Managers, at
such office in New York, New York as the Managers may designate, against payment
of the purchase price therefor by wire transfer of immediately available Federal
(same day) funds payable to the Company, such payment to be made to an account
designated by the Company at a bank acceptable to CSFBC, and confirmed at the
office of King & Spalding, 000 Xxxxxxxxx Xx., X.X., Xxxxxxx, Xxxxxxx 00000. The
certificates for the U.S. Optional Securities will be in definitive form, in
such denominations and registered in such names as CSFBC requests upon
reasonable notice prior to such Optional Closing Date and will be made available
for checking and packaging at a reasonable time in advance of such Optional
Closing Date at such office in New York, New York as you may designate.
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The Company will pay to the Managers as aggregate compensation for
their commitments hereunder and for their services in connection with the
purchase of the International Securities and the management of the offering
thereof, if the sale and delivery of the International Securities to the
Managers provided herein is consummated, an amount equal to U.S. $ per
International Security purchased, which may be divided among the Managers in
such proportions as they may determine. Such payment will be made on the First
Closing Date in the case of the International Firm Securities and on each
Optional Closing Date in the case of the International Optional Securities sold
to the Manager on such Closing Date, in each case by way of deduction by the
Managers of said amount from the purchase price for the International Securities
referred to above.
4. Offering by Managers. It is understood that the several Managers
propose to offer the International Securities for sale to the public as set
forth in the International Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
several Managers that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Company will file each of the Prospectuses with the Commission pursuant
to and in accordance with subparagraph (1) (or, if applicable and if
consented to by CSFBEL, subparagraph (4)) of Rule 424(b) not later than
the earlier of (A) the second business day following the execution and
delivery of this Agreement or (B) the fifteenth business day after the
Effective Date of the Initial Registration Statement.
The Company will advise CSFBEL promptly of any such filing pursuant to
Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement and
an additional registration statement is necessary to register a portion
of the Offered Securities under the Act but the Effective Time thereof
has not occurred as of such execution and delivery, the Company will
file the additional registration statement or, if filed, will file a
post-effective amendment thereto with the Commission pursuant to and in
accordance with Rule 462(b) on or prior to 10:00 P.M., New York time,
on the date of this Agreement or, if earlier, on or prior to the time
either Prospectus is printed and distributed to any Manager or U.S.
Underwriter, or will make such filing at such later date as shall have
been consented to by CSFBEL.
(b) The Company will advise CSFBEL promptly of any proposal to
amend or supplement the initial or any additional registration
statement as filed or either of the related prospectuses or the Initial
Registration Statement, the Additional Registration Statement (if any)
or either of the Prospectuses and will not effect such amendment or
supplementation without CSFBEL's prior written consent; and the Company
will also advise CSFBEL promptly of the effectiveness of each
Registration Statement (if its Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or
supplementation of a Registration Statement or either of the
Prospectuses and of the institution by the Commission of any stop order
proceedings in respect of a Registration Statement and will use its
best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any U.S. Underwriter, Manager or dealer,
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any event occurs as a result of which either or both of the
Prospectuses as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend either or both of the Prospectuses to
comply with the Act, the Company will promptly notify CSFBEL of such
event and will promptly prepare and file with the Commission an
amendment or supplement which will correct such statement or omission
or an amendment which will effect such compliance. Neither CSFBEL's
consent to, nor the Managers' delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth
in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the
Initial Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "Availability Date" means the
90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Managers copies of each
Registration Statement (five of which will include all exhibits), each
preliminary prospectus relating to the International Securities, and,
until completion of the distribution of the International Securities as
determined by CSFBEL, the International Prospectus and all amendments
and supplements to such documents, in each case in such quantities as
CSFBEL requests. The International Prospectus shall be so furnished on
or prior to 3:00 P.M., New York time, on the business day following the
later of the execution and delivery of this Agreement or the Effective
Time of the Initial Registration Statement. All other such documents
shall be so furnished as soon as available. The Company will pay the
expenses of printing and distributing to the Managers all such
documents.
(f) No action has been or, prior to the completion of the
distribution of the Offered Securities, will be taken by the Company in
any jurisdiction outside the United States and Canada that would permit
a public offering of the Offered Securities, or possession or
distribution of the International Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus issued in
connection with the offering of the Offered Securities, or any other
offering material, in any country or jurisdiction where action for that
purpose is required.
(g) During the period of five years hereafter, the Company
will furnish to CSFBEL and, upon request, to each of the other
Managers, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the
Company will furnish to CSFBEL (i) as soon as available, a copy of each
report and any definitive proxy statement of the Company filed with the
Commission under the Securities Exchange Act of 1934 or mailed to
stockholders, and (ii) from time to time, such other information
concerning the Company as CSFBEL may reasonably request.
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(h) The Company will pay all expenses incident to the
performance of its obligations under this Agreement and will reimburse
the Managers (if and to the extent incurred by them) for any filing
fees and other expenses (including fees and disbursements of counsel)
incurred by them in connection with the filing relating to the review
of documents by the National Association of Securities Dealers, Inc.
("NASD") pursuant to the Corporate Financing Rule of the NASD's Conduct
Rules and for expenses incurred in distributing preliminary
prospectuses and the Prospectuses (including any amendments and
supplements thereto) to the Managers.
(i) For a period of 180 days after the date of the initial
public offering of the Offered Securities, the Company will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under
the Act relating to, any additional shares of its Securities or
securities convertible into or exchangeable or exercisable for any
shares of its Securities, or publicly disclose the intention to make
any such offer, sale, pledge, disposal or filing, without the prior
written consent of CSFBC, except registrations required pursuant to the
Stock Purchase Agreements, the Series A Notes and the Series B Notes,
and grants of employee stock options pursuant to the terms of the 1994
Option Plan or the 1994 Directors' Plan in effect on the date hereof
that may not be exercised until 180 days after the public offering of
the Offered Securities, issuances of Securities pursuant to the
exercise of such options or the exercise of any other employee stock
options outstanding on the date hereof.
6. Conditions of the Obligations of the Managers. The obligations of
the several Managers to purchase and pay for the International Firm Securities
on the First Closing Date and the International Optional Securities to be
purchased on each Optional Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company herein, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) The Managers shall have received a letter, dated the date
of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if
the Effective Time of the Initial Registration Statement is subsequent
to the execution and delivery of this Agreement, shall be prior to the
filing of the amendment or post-effective amendment to the registration
statement to be filed shortly prior to such Effective Time), of Xxxxxx
Xxxxxxxx LLP in the agreed form.
(b) The Managers shall have received a letter, dated the date
of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of
this Agreement, shall be on or prior to the date of this Agreement or,
if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to the
registration statement to be filed shortly prior to such Effective
Time), of KPMG Peat Marwick LLP in the agreed form.
(c) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than
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10:00 P.M., New York time, on the date of this Agreement or such later
date as shall have been consented to by CSFBEL. If the Effective Time
of the Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the time either Prospectus is printed
and distributed to any Manager or U.S. Underwriter, or shall have
occurred at such later date as shall have been consented to by CSFBEL.
If the Effective Time of the Initial Registration Statement is prior to
the execution and delivery of this Agreement, each of the Prospectuses
shall have been filed with the Commission in accordance with the Rules
and Regulations and Section 5(a) of this Agreement. Prior to such
Closing Date, no stop order suspending the effectiveness of a
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the
Company or the Managers, shall be contemplated by the Commission.
(d) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (A) a change in U.S. or
international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the judgment of
CSFBEL, be likely to prejudice materially the success of the proposed
issue, sale or distribution of the International Securities, whether in
the primary market or in respect of dealings in the secondary market,
or (B)(i) any change, or any development involving a prospective
change, in the condition (financial or other), results of operations,
business affairs or business prospects of the Company and its
subsidiaries or BRACC and its subsidiaries which, in the judgment of
CSFBEL, is material and adverse and makes it impractical or inadvisable
to proceed with completion of the public offering or the sale of and
payment for the International Securities; (ii) any downgrading in the
rating of any debt securities or preferred stock of the Company or
BRACC or any of their respective subsidiaries by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities or preferred stock of the Company, BRACC or any of their
respective subsidiaries (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any suspension or limitation of
trading in securities generally on the New York Stock Exchange or The
Nasdaq National Market, or any setting of minimum prices for trading on
such exchange or market, or any suspension of trading of any securities
of the Company on any exchange or in the over-the-counter market; (iv)
any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by the
United States Congress or any other substantial national or
international calamity or emergency if, in the judgment of CSFBEL, the
effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
International Securities.
(e) The Managers shall have received an opinion, dated such
Closing Date, of King & Spalding, counsel for the Company, in the
agreed form.
(f) The Managers shall have received an opinion, dated such
Closing Date, of Xxxxxx X. Xxxxxx, Senior Vice President, General
Counsel and Secretary of BRACC, in the agreed form.
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(g) The Managers shall have received from Cravath, Swaine &
Xxxxx, counsel for the Managers, such opinion or opinions, dated such
Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities delivered on such Closing Date, the
Registration Statement, the Prospectuses and other related matters as
the Managers may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(h) The Managers shall have received a certificate, dated such
Closing Date, of the President and the principal financial officer of
the Company in which such officers, to the best of their knowledge
after reasonable investigation, shall state that: the representations
and warranties of the Company in this Agreement are true and correct on
and as of such Closing Date to the same effect as if made on such
Closing Date; the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date; no stop order suspending
the effectiveness of any Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated
by the Commission; the Additional Registration Statement (if any)
satisfying the requirements of subparagraphs (1) and (3) of Rule 462(b)
was filed pursuant to Rule 462(b), including payment of the applicable
filing fee in accordance with Rule 111(a) or (b) under the Act, prior
to the time either Prospectus was printed and distributed to any
Manager or U.S. Underwriter; and, subsequent to the date of the most
recent financial statements in the Prospectuses, there has been no
material adverse change in the condition (financial or other), results
of operations, business affairs or business prospects of the Company,
BRACC and any Subsidiary except as set forth in or contemplated by the
Prospectuses or as described in such certificate.
(i) The Managers shall have received letters, dated such
Closing Date, of Xxxxxx Xxxxxxxx LLP and KPMG Peat Marwick LLP, which
meet the requirements of subsections (a) and (b) of this Section,
respectively, except that the specified date referred to in such
subsection will be a date not more than five days prior to such Closing
Date for the purposes of this subsection.
(j) On such Closing Date, the U.S. Underwriters shall have
purchased the U.S. Firm Securities or the U.S. Optional Securities, as
the case may be, pursuant to the Underwriting Agreement.
(k) Concurrently with or prior to the issuance and sale of the
Offered Securities by the Company, the Acquisition shall be consummated
on terms that conform in all material respects to the description
thereof in the Registration Statement and Prospectuses and CSFBC shall
have received true and correct copies of all documents pertaining
thereto and evidence reasonably satisfactory to CSFBC of the
consummation thereof.
(l) Concurrently with or prior to the issuance and sale of the
Offered Securities by the Company, the Company shall have entered into
the New Fleet Financing Credit Agreements and shall have made the
initial borrowings thereunder. CSFBC shall have received conformed
counterparts thereof and all other documents and agreements entered
into and received thereunder in connection with the closing of the New
Fleet Financing Credit Agreements. There shall exist at and as of the
Closing Date (after giving effect to the transactions contemplated by
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this Agreement and the Acquisition) no condition that would constitute
a default (or an event that with notice or lapse of time, or both,
would constitute a default) under the New Fleet Financing Credit
Agreements.
(m) Concurrently with or prior to the issuance and sale of the
Offered Securities by the Company, the offering of the Senior Notes by
BRACC and the Series B Notes by the Company shall be consummated on
terms that conform in all material respects to the descriptions thereof
in the Registration Statement and Prospectuses and CSFBC shall have
received true and correct copies of all documents pertaining thereto
and evidence reasonably satisfactory to CSFBC of the consummation
thereof.
(n) On any Optional Closing Date for the purchase of Optional
Shares, CSFBC shall receive a certificate, dated such Closing Date,
from the Company which shall state that the representations and
warranties by the Company in this Agreement and in the Underwriting
Agreement are true and correct on and as of such Optional Closing Date
to the same effect as if made on such Optional Closing Date and that
the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to such Optional Closing Date.
(o) The Representatives shall have received executed
agreements in the form annexed hereto as Exhibit A from each officer
and director of the Company.
Documents described as being "in the agreed form" are documents which are in the
forms which have been initialed for the purpose of identification by Cravath,
Swaine & Xxxxx, copies of which are held by the Company and CSFBEL with such
changes as CSFBEL may approve. The Company will furnish the Managers with such
conformed copies of such opinions, certificates, letters and documents as the
Managers reasonably request. CSFBEL may in its sole discretion waive on behalf
of the Managers compli ance with any conditions to the obligations of the
Managers hereunder, whether in respect of an Optional Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Manager against any losses, claims, damages or liabilities,
joint or several, to which such Manager may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
either of the Prospectuses, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the omis sion
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Manager for any legal or other expenses reasonably incurred by
such Manager in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Manager through CSFBEL specifically
for use therein, it being understood and agreed that the only information
furnished by any Manager consists of the information described as such in
subsection (b) below; provided further, that such indemnity with respect
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to any untrue statement or omission of a material fact contained in any
preliminary prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages or liabilities
purchased the shares that are the subject thereof if such person did not receive
a copy of the Prospectus (or the Prospectus as supplemented) at or prior to the
confirmation of the sale of such shares to such person in any case where such
delivery is required under the Act and such untrue statement or omission of a
material fact contained in any preliminary prospectus was corrected in the
Prospectus (or the Prospectus as supplemented).
Insofar as the foregoing indemnity agreement, or the representations
and warranties contained in Section 2(b), may permit indemnification for
liabilities under the Act of any person who is a Manager or a partner or
controlling person of a Manager within the meaning of Section 15 of the Act and
who, at the date of this Agreement, is a director, officer or controlling person
of the Company, the Company has been advised that in the opinion of the
Commission such provisions may contravene Federal public policy as expressed in
the Act and may therefore be unenforceable. In the event that a claim for
indemnification under such agreement or such representations and warranties for
any such liabilities (except insofar as such agreement provides for the payment
by the Company of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or proceeding)
is asserted by such a person, the Company will submit to a court of appropriate
jurisdiction (unless in the opinion of counsel for the Company the matter has
already been settled by controlling precedent) the question of whether or not
indemnification by it for such liabilities is against public policy as expressed
in the Act and therefore unenforceable, and the Company will be governed by the
final adjudication of such issue.
(b) Each Manager will severally and not jointly indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, either of the
Prospectuses, or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Manager
through CSFBEL specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Manager consists of (i) the following information
in the International Prospectus furnished on behalf of each Manager: the last
paragraph at the bottom of the cover page concerning the terms of the offering
by the Managers, the legend concerning over-allotments, stabilizing and passive
market making on the inside front cover page and the fourteenth paragraph under
the caption "Subscription and Sale", the concession and reallowance figures
appearing in the fifth paragraph under the caption "Subscription and Sale" and
the information contained in the eleventh paragraph under the caption
"Subscription and Sale" and (ii) the information in the thirteenth paragraph
under the caption "Subscription and Sale" in the International Prospectus
furnished on behalf of CSFBC concerning material relationship disclosure.
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(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Managers on the other from the offering of the International
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Managers on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Managers on
the other shall be deemed to be in the same proportion as the total net proceeds
from the offering of the International Securities (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by the Managers. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Managers and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to
in the first sentence of this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Manager shall be required to contribute any amount in excess
of the amount by which the total price at which the International Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Manager 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
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was not guilty of such fraudulent misrepresentation. The Managers' obligations
in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Manager within the meaning of the Act; and the obligations of the Managers under
this Section shall be in addition to any liability which the respective Managers
may otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has signed a
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
8. Default of Managers. If any Manager or Managers default in their
obligations to purchase International Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of International
Securities that such defaulting Manager or Managers agreed but failed to
purchase does not exceed 10% of the total number of shares of International
Securities that the Managers are obligated to purchase on such Closing Date,
CSFBEL may make arrangements satisfactory to the Company for the purchase of
such International Securities by other persons, including any of the Managers,
but if no such arrangements are made by such Closing Date the non-defaulting
Managers shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the International Securities that such
defaulting Managers agreed but failed to purchase on such Closing Date. If any
Manager or Managers so default and the aggregate number of shares of
International Securities with respect to which such default or defaults occur
exceeds 10% of the total number of shares of International Securities that the
Managers are obligated to purchase on such Closing Date and arrangements
satisfactory to CSFBEL and the Company for the purchase of such International
Securities by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Manager or the Company, except as provided in Section 9 (provided
that if such default occurs with respect to International Optional Securities
after the First Closing Date, this Agreement will not terminate as to the
International Firm Securities or any International Optional Securities purchased
prior to such termination). As used in this Agreement, the term "Manager"
includes any person substituted for a Manager under this Section. Nothing herein
will relieve a defaulting Manager from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Managers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Manager, the Company or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and payment
for the International Securities. If this Agreement is terminated pursuant to
Section 8 or if for any reason the purchase of the International Securities by
the Managers is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Managers pursuant to Section 7 shall remain
in effect and if any International Securities have been purchased hereunder the
representations and warranties in Section 2 and all obligations under Section 5
shall also remain in effect. If the purchase of the International Securities by
the Managers is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 8 or the occurrence of any
event specified in Section 6(d)(A) or clause (iii), (iv), or (v) of Section
6(d)(B), the
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Company will reimburse the Managers for all out-of-pocket expenses (including
fees and disbursements of counsel) reasonably incurred by them in connection
with the offering of the International Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Managers, will be mailed, delivered or telexed and confirmed to
CSFBEL at Xxx Xxxxx Xxxxxx, Xxxxxx X00 0XX England, Attention: Company
Secretary, or, if sent to the Company, will be mailed, delivered or telegraphed
and confirmed to it at Team Rental Group, Inc., 000 Xxxxx Xxxxxx, Xxxxxxx Xxxxx,
Xxxxxxx 00000, Attention: Xx. Xxxxxxx Xxxxxx; provided, however, that any notice
to a Manager pursuant to Section 7 will be mailed, delivered or telexed and
confirmed to such Manager.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
12. Representation of Managers. CSFBEL will act for the several
Managers in connection with this financing, and any action under this Agreement
taken by CSFBEL will be binding upon all the Managers.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
If the foregoing is in accordance with the Managers' understanding of
our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement between the Company and the
several Managers in accordance with its terms.
Very truly yours,
By
--------------------------------
Xxxxxxx Xxxxxx
Chairman and Chief
Executive Officer
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The foregoing Subscription Agreement is hereby
confirmed and accepted as of
the date first above written.
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
By:
-----------------------------------------
[Insert title]
ABN AMRO XXXXXXXXXX
XXXX. XXXXX & SONS INTERNATIONAL
XXXXXXXX & COMPANY SECURITIES, INC.
Each by its duly authorized attorney-in-fact:
----------------------------------------------
[Insert name]
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SCHEDULE A
Number of
International
Manager Firm Securities
------- ---------------
Credit Suisse First Boston Limited.................
ABN AMRO Rothschild................................
Alex. Xxxxx & Sons International...................
XxXxxxxx & Company Securities, Inc.................
---------
Total........................ 1,300,000
=========
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EXHIBIT A
April __, 1997
Team Rental Group, Inc.
000 Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010
ABN AMRO Chicago Corporation
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Alex. Xxxxx & Sons Incorporated
0 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
XxXxxxxx & Company Securities, Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Dear Sirs:
As an inducement to the Underwriters to execute the Underwriting
Agreement, pursuant to which an offering will be made of Class A Common Stock,
par value $.01 per share (the "Securities"), of Team Rental Group, Inc. (the
"Company"), the undersigned hereby agrees that, for a period of 90 days after
the public offering (the "Commencement Date") of the Securities pursuant to the
Underwriting Agreement to which you are or expect to become party, the
undersigned will not offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, any shares of Securities or securities convertible
into or exchangeable or exercisable for any shares of Securities, or publicly
disclose the intention to make any such offer, sale, pledge or disposal, without
the prior written consent of Credit Suisse First Boston Corporation.
In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer of shares of
Securities if such transfer would constitute a violation or breach of this
Agreement.
This Agreement shall be binding on the undersigned and the respective
successors, heirs, personal representatives and assigns of the undersigned. This
agreement shall lapse and become null and void if the Commencement Date shall
not have occurred on or before ____________, 1997.
Very truly yours,
------------------------------
Name:
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