1
Exhibit 2.3
================================================================================
REPUBLIC SERVICES, INC.
A Delaware corporation
100,000,000 Shares of Class A Common Stock
INTERNATIONAL PURCHASE AGREEMENT
Dated: April 27, 1999
================================================================================
2
TABLE OF CONTENTS
Page
----
SECTION 1. Representations and Warranties ........................................... 4
(a) Representations and Warranties by the Company ............................... 4
(i) Compliance with Registration Requirements ............................ 4
(ii) Independent Accountants ............................................. 5
(iii) Financial Statements ............................................... 5
(iv) No Material Adverse Change in Business .............................. 5
(v) Good Standing of the Company ......................................... 5
(vi) Good Standing of Subsidiaries ....................................... 6
(vii) Capitalization ..................................................... 6
(viii) Authorization of Agreement ........................................ 6
(ix) Description of Securities ........................................... 7
(x) Absence of Defaults and Conflicts .................................... 7
(xi) Absence of Labor Dispute ............................................ 7
(xii) Absence of Proceedings ............................................. 7
(xiii) Accuracy of Exhibits .............................................. 8
(xiv) Possession of Intellectual Property ................................ 8
(xv) Absence of Further Requirements ..................................... 8
(xvi) Possession of Licenses and Permits ................................. 8
(xvii) Title to Property ................................................. 9
(xviii) Investment Company Act ........................................... 9
(xix) Environmental Laws ................................................. 9
(xx) Registration Rights ................................................. 10
(xxi) Income Taxes ....................................................... 10
(xxii) Internal Controls ................................................. 10
(xxiii) Insurance ........................................................ 11
(xxiv) Offering Material ................................................. 11
(xxv) Related Party Transactions ......................................... 11
(xxvi) Solvency .......................................................... 11
(xxvii) U.S. Real Property Holding Corporation ........................... 11
(xxviii) Year 2000 and Euro Disclosures .................................. 11
(b) Representations and Warranties by AutoNation and the Selling Shareholder .... 12
(i) Accurate Disclosure .................................................. 12
(ii) Authorization of Agreeements ........................................ 12
(iii) Good and Marketable Title .......................................... 12
(iv) Absence of Manipulation ............................................. 12
(v) Absence of Defaults and Conflicts .................................... 13
(vi) Absence of Further Requirements ..................................... 13
(vii) Restriction on Sale of Securities .................................. 13
(viii) No Association with NASD .......................................... 14
(c) Officer's Certificates ...................................................... 14
-i-
3
SECTION 2. Sale and Delivery to International Managers; Closing ..................... 14
(a) Initial Securities .......................................................... 14
(b) Option Securities ........................................................... 14
(c) Payment ..................................................................... 15
(d) Denominations; Registration ................................................. 15
SECTION 3. Covenants of the Company ................................................. 16
(a) Compliance with Securities Regulations and Commission Requests .............. 16
(b) Filing of Amendments ........................................................ 16
(c) Delivery of Registration Statements ......................................... 16
(d) Delivery of Prospectus ...................................................... 17
(e) Continued Compliance with Securities Laws ................................... 17
(f) Blue Sky Qualifications ..................................................... 17
(g) Rule 158 .................................................................... 18
(h) Listing ..................................................................... 18
(i) Restriction on Sale of Securities ........................................... 18
(j) Reporting Requirements ...................................................... 18
SECTION 4. Payment of Expenses ...................................................... 19
(a) Expenses .................................................................... 19
(b) Expenses of AutoNation and the Selling Shareholder .......................... 19
(c) Termination of Agreement .................................................... 19
(d) Allocation of Expenses ...................................................... 19
SECTION 5. Conditions of International Managers' Obligations ........................ 20
(a) Effectiveness of Registration Statement ..................................... 20
(b) Opinion of Counsel for Company .............................................. 20
(c) Opinion of Counsel for AutoNation and the Selling Shareholder ............... 20
(d) Opinion of Counsel for International Managers ............................... 20
(e) Company Officers' Certificate ............................................... 21
(f) AutoNation and Selling Shareholder Officers' Certificates ................... 21
(g) Accountant's Comfort Letter ................................................. 21
(h) Bring-down Comfort Letter ................................................... 22
(i) Approval of Listing ......................................................... 22
(j) No Objection ................................................................ 22
(k) Lock-up Agreements .......................................................... 22
(l) Purchase of Initial U.S. Securities ......................................... 22
(m) Additional Documents ....................................................... 22
(n) Conditions to Purchase of International Option Securities ................... 22
(i) Company Officers' Certificate ........................................ 22
(ii) AutoNation and Selling Shareholder Officers' Certificates ........... 23
(iii) Opinion of Counsel for Company ..................................... 23
(iv) Opinion of Counsel for AutoNation and the Selling Shareholder ....... 23
(v) Opinion of Counsel for International Managers ........................ 23
(vi) Bring-down Comfort Letter ........................................... 23
(o) Termination of Agreement .................................................... 24
-ii-
4
SECTION 6. Indemnification ................................................................ 24
(a) Indemnification of International Managers ......................................... 24
(b) Indemnification of Company, Directors and Officers, AutoNation and the Selling
Shareholder ..................................................................... 25
(c) Actions against Parties; Notification ............................................. 25
(d) Settlement without Consent if Failure to Reimburse ................................ 26
(e) Other Agreements with Respect to Indemnifcation ................................... 26
SECTION 7. Contribution ................................................................... 26
SECTION 8. Representations, Warranties and Agreements to Survive Delivery ................. 28
SECTION 9. Termination Agreement .......................................................... 28
(a) Termination; General .............................................................. 28
(b) Liabilities ....................................................................... 28
SECTION 10. Default by One or More of the International Managers .......................... 28
SECTION 11. Notices ....................................................................... 29
SECTION 12. Parties ....................................................................... 29
SECTION 13 Governing Law and Time ......................................................... 30
SECTION 14 Effect of Headings ............................................................. 30
SCHEDULES
SCHEDULE A LIST OF INTERNATIONAL MANAGERS .................................... SCH A-1
SCHEDULE B PRICING INFORMATION ............................................... SCH B-1
SCHEDULE C LIST OF PERSONS SUBJECT TO LOCK-UP ................................ SCH C-1
EXHIBITS
EXHIBIT A-1 FORM OF OPINION OF COMPANY'S COUNSEL ............................. X-0
XXXXXXX X-0 FORM OF OPINION OF VERMONT COUNSEL ............................... A-2
EXHIBIT B FORM OF LOCK-UP LETTER ............................................. B-1
-iii-
5
REPUBLIC SERVICES, INC.
A Delaware corporation
100,000,000 Shares of Class A Common Stock
Par Value $0.01 Per Xxxxx
XXXXXXXXXXXXX PURCHASE AGREEMENT
April 27, 1999
Xxxxxxx Xxxxx International
Xxxxxxxxx, Lufkin & Xxxxxxxx International
Deutsche Bank AG London
Bear, Xxxxxxx International Limited
CIBC Oppenheimer International Ltd.
Credit Suisse First Boston (Europe) Limited
Xxxxxx Xxxxxxx & Co. International Limited
Salomon Brothers International Limited.
as Lead Managers of the several International Managers
c/o Merrill Xxxxx International
Ropemaker Place
00 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Ladies and Gentlemen:
Republic Services, Inc., a Delaware corporation (the "Company"),
AutoNation, Inc., a Delaware corporation ("AutoNation"), and AutoNation
Insurance Company, Inc., a Vermont corporation (the "Selling Shareholder"),
confirm their respective agreements with Xxxxxxx Xxxxx International ("Xxxxxxx
Xxxxx") and each of the other International Managers named in Schedule A hereto
(collectively, the "International Managers", which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for whom
Xxxxxxx Lynch, Donaldson, Lufkin & Xxxxxxxx International, Deutsche Bank AG
London, Bear, Xxxxxxx
-1-
6
International Limited, CIBC Oppenheimer International Ltd., Credit Suisse First
Boston (Europe) Limited, Xxxxxx Xxxxxxx & Co. International Limited and Salomon
Brothers International Limited are acting as representatives (in such capacity,
the "Lead Managers"), with respect to (i) the sale by the Selling Shareholder
and the purchase by the International Managers, acting severally and not
jointly, of the respective numbers of shares of Class A Common Stock, par value
$0.01 per share, of the Company ("Common Stock") set forth in Schedule A hereto,
and (ii) the grant by the Selling Shareholder to the International Managers,
acting severally and not jointly, of the option described in Section 2(b) hereof
to purchase all or any part of 2,432,500 additional shares of Common Stock
solely to cover over-allotments, if any. The aforesaid 20,000,000 shares of
Common Stock (the "Initial International Securities") to be purchased by the
International Managers and all or any part of the 2,432,500 shares of Common
Stock subject to the option described in Section 2(b) hereof (the "International
Option Securities") are hereinafter called, collectively, the "International
Securities."
It is understood that the Company, AutoNation and the Selling
Shareholder are concurrently entering into an agreement dated the date hereof
(the "U.S. Purchase Agreement") providing for the offering by the Selling
Shareholder of an aggregate of 80,000,000 shares of Common Stock (the "Initial
U.S. Securities") through arrangements with certain underwriters in the United
States and Canada (the "U.S. Underwriters") for which Xxxxxxx Xxxxx & Co.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation, Deutsche Bank Securities Inc., Bear, Xxxxxxx & Co. Inc.,
CIBC Xxxxxxxxxxx Corp., Credit Suisse First Boston Corporation, Xxxxxx Xxxxxxx &
Co. Incorporated and Xxxxxxx Xxxxx Barney Inc. are acting as representatives
(the "U.S. Representatives") and the grant by the Selling Shareholder to the
U.S. Underwriters, acting severally and not jointly, of an option to purchase
all or any part of the U.S. Underwriters' pro rata portion of up to 9,730,000
additional shares of Common Stock solely to cover over-allotments, if any (the
"U.S. Option Securities" and, together with the International Option Securities,
the "Option Securities"). The Initial U.S. Securities and the U.S. Option
Securities are hereinafter called the "U.S. Securities." It is understood that
the Selling Shareholder is not obligated to sell, and the International Managers
are not obligated to purchase, any Initial International Securities unless all
of the Initial U.S. Securities are contemporaneously purchased by the U.S.
Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters," the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities," and the International Securities and the U.S. Securities are
hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated (in such capacity, the "Global Coordinator").
-2-
7
The Company, AutoNation and the Selling Shareholder understand that the
International Managers propose to make a public offering of the International
Securities as soon as the Lead Managers deem advisable after this Agreement has
been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-73259) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two
forms of prospectus are to be used in connection with the offering and sale of
the Securities: one relating to the U.S. Securities (the "Form of U.S.
Prospectus") and one relating to the International Securities (the "Form of
International Prospectus"). The Form of International Prospectus is identical to
the Form of U.S. Prospectus, except for their respective front cover pages,
"Underwriting" sections and back cover pages. The information included in any
such prospectus or in any such Term Sheet, as the case may be, that was omitted
from such registration statement at the time it became effective but that is
deemed to be part of such registration statement at the time it became effective
(a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each Form of International Prospectus and Form of U.S.
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
schedules thereto at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of U.S.
Prospectus and the final Form of International Prospectus in the forms first
furnished to the Underwriters for use in connection with the offering of the
Securities are herein called the "U.S. Prospectus" and the "International
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "U.S. Prospectus" and "International Prospectus" shall
refer to the preliminary U.S. Prospectus dated April 6, 1999 and preliminary
International Prospectus dated April 6, 1999, respectively, each together with
the applicable Term Sheet and all references in this Agreement to the date of
such Prospectuses shall mean the date of the applicable Term Sheet. For purposes
of this Agreement, all references to the Registration Statement, any preliminary
prospectus, the U.S. Prospectus, the International Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be
-3-
8
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("XXXXX").
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to each International Manager as of the date hereof, as
of the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
International Manager, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any International
Option Securities are purchased, at the Date of Delivery), the
Registration Statement, the Rule 462(b) Registration Statement and any
amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither the Prospectuses nor any amendments or supplements thereto, at
the time the Prospectuses or any amendments or supplements thereto were
issued and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectuses shall not be "materially
different," as such term is used in Rule 434, from the prospectuses
included in the Registration Statement at the time it became effective.
The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or the
Prospectuses made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the Lead
Managers or the U.S. Representatives expressly for use in the
Registration Statement or the Prospectuses.
Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the
-4-
9
1933 Act Regulations and each preliminary prospectus and the
Prospectuses delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(ii) INDEPENDENT ACCOUNTANTS. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iii) FINANCIAL STATEMENTS. The financial statements included
in the Registration Statement and the Prospectuses, together with the
related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated
and the statement of operations and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data
and the summary financial information included in the Prospectuses
present fairly the information shown therein and have been compiled on
a basis consistent with that of the audited financial statements
included in the Registration Statement. The pro forma financial
information included in the Registration Statement and the Prospectuses
present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial information and have been properly compiled on the
bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
to give effect to the transactions and circumstances referred to
therein.
(iv) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(v) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties
-5-
10
and to conduct its business as described in the Prospectuses or as
proposed to be conducted and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect.
(vi) GOOD STANDING OF SUBSIDIARIES. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation or limited liability company, as the case may be, in good
standing under the laws of the jurisdiction of its organization, has
the corporate or limited liability company power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectuses and is duly qualified as a foreign
corporation or limited liability company, as the case may be, to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock
or limited liability interests of each such Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through Subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock or limited
liability interests of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary.
The only subsidiaries of the Company are (a) the subsidiaries listed on
Exhibit 21.1 to the Registration Statement and (b) certain other
subsidiaries which, considered in the aggregate as a single subsidiary,
do not constitute a "significant subsidiary" as defined in Rule 1-02 of
Regulation S-X.
(vii) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectuses under
the caption "Description of Capital Stock" (except for subsequent
issuances, if any, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectuses or pursuant to the
exercise of convertible securities, warrants or options referred to in
the Prospectuses). The shares of issued and outstanding capital stock
of the Company, including the Securities to be purchased by the
Underwriters from the Selling Shareholder, have been duly authorized
and validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company, including the
Securities to be purchased by the Underwriters from the Selling
Shareholder, was issued in violation of the preemptive or other similar
rights of any securityholder of the Company.
-6-
11
(viii) AUTHORIZATION OF AGREEMENT. This Agreement and the U.S.
Purchase Agreement have been duly authorized, executed and delivered by
the Company.
(ix) DESCRIPTION OF SECURITIES. The Common Stock conforms to
all statements relating thereto contained in the Prospectuses and such
description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to
personal liability by reason of being such a holder.
(x) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor
any of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement
or instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the U.S. Purchase
Agreement and the consummation of the transactions contemplated in this
Agreement, in the U.S. Purchase Agreement and in the Registration
Statement (including the sale and delivery of the Securities) and
compliance by the Company with its obligations under this Agreement and
the U.S. Purchase Agreement have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws of
the Company or any subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company, AutoNation, the
Selling Shareholder or any of their respective subsidiaries.
(xi) ABSENCE OF LABOR DISPUTE. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in any case, may reasonably be expected to result
in a Material Adverse Effect.
-7-
12
(xii) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company, AutoNation, the Selling Shareholder or any of their respective
subsidiaries, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably
be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in this Agreement and the U.S. Purchase Agreement or the
performance by the Company of its obligations hereunder or thereunder;
the aggregate of all pending legal or governmental proceedings to which
the Company or any subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result
in a Material Adverse Effect.
(xiii) ACCURACY OF EXHIBITS. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits thereto which
have not been so described and filed as required.
(xiv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xv) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Securities under this Agreement and the U.S. Purchase
Agreement or the consummation of the transactions contemplated by this
Agreement and the U.S. Purchase Agreement, except such as have been
already obtained or as may be required under the 1933 Act or the 1933
Act Regulations and foreign or state securities or blue sky laws.
(xvi) POSSESSION OF LICENSES AND PERMITS. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively,
-8-
13
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them; the Company and its subsidiaries are in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in
the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xvii) TITLE TO PROPERTY. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Prospectuses or (b) do
not, singly or in the aggregate, materially affect the value of such
property as currently used or intended to be used and do not interfere
with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all of the leases and subleases
material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectuses, are in
full force and effect, and neither the Company nor any subsidiary has
any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any subsidiary under any
of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such subsidiary to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(xviii) INVESTMENT COMPANY ACT. The Company is not, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectuses will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xix) ENVIRONMENTAL LAWS. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation,
-9-
14
laws and regulations relating to the release or threatened release of
chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Company and its
subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with
their requirements, (C) there are no administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
pending or, to the best of the Company's knowledge, threatened relating
to any Environmental Law against the Company or any of its subsidiaries
and (D) to the best of the Company's knowledge, there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the Company or any of its subsidiaries relating to Hazardous Materials
or any Environmental Laws.
(xx) REGISTRATION RIGHTS. Except as disclosed in the
Prospectuses, there are no persons with registration rights or other
similar rights to have any securities registered pursuant to the
Registration Statement, or otherwise registered by the Company under
the 1933 Act.
(xxi) INCOME TAXES. All United States federal income tax
returns of the Company and its subsidiaries required by law to be filed
have been filed (taking into account extensions granted by the
applicable federal governmental agency) and all taxes shown by such
returns or otherwise assessed, which are due and payable, have been
paid, except for such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided. All other
corporate franchise and income tax returns of the Company and its
subsidiaries required to be filed pursuant to applicable foreign, state
or local law have been filed, except insofar as the failure to file
such returns would not individually or in the aggregate have a Material
Adverse Effect, and all taxes shown on such returns or otherwise
assessed which are due and payable have been paid, except for such
taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided. The charges, accruals and
reserves on the books of the Company in respect of any income and
corporation tax liability for any years not finally determined are
adequate to meet any assessments or re-assessments for additional
income tax for any years not finally determined, except to the extent
of any inadequacy that would not have a material adverse effect on the
condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered
together as one enterprise.
(xxii) INTERNAL CONTROLS. The Company and its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance
with management's general or specific
-10-
15
authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (C) access to assets is permitted
only in accordance with management's general or specific authorization;
and (D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any material differences.
(xxiii) INSURANCE. The Company and its subsidiaries carry or
are entitled to the benefits of insurance, with financially sound and
reputable insurers, in such amounts and covering such risks as is
generally maintained by companies of established repute engaged in the
same or similar business, and all such insurance is in full force and
effect.
(xxiv) OFFERING MATERIAL. The Company has not distributed and,
prior to the later to occur of (i) the Closing Time and (ii) completion
of the distribution of the Securities, will not distribute any offering
material in connection with the offering and sale of the Securities
other than the Registration Statement, any preliminary prospectuses,
the Prospectuses or other materials, if any, permitted by the 1933 Act
and approved by the Global Coordinator.
(xxv) RELATED PARTY TRANSACTIONS. There are no business
relationships or related party transactions of the nature described in
Item 404 of Regulation S-K involving the Company and any person
described in such Item that are required to be disclosed in the
Registration Statement and which have not been so disclosed.
(xxvi) SOLVENCY. The Company is, and immediately after the
Closing Time the Company will be, Solvent. As used herein, the term
"Solvent" means, with respect to the Company on a particular date, that
on such date (A) the fair market value of the assets of the Company is
greater than the total amount of liabilities (including contingent
liabilities) of the Company, (B) the present fair salable value of the
assets of the Company is greater than the amount that will be required
to pay the probable liabilities of the Company on its debts as they
become absolute and matured, (C) the Company is able to realize upon
its assets and pay its debts and other liabilities, including
contingent obligations, as they mature, and (D) the Company does not
have unreasonably small capital.
(xxvii) U.S. REAL PROPERTY HOLDING CORPORATION. The Company is
not, and has not been, at any time within the year prior to the date
hereof, a "United States real property holding corporation" within the
meaning of Section 897 of the Internal Revenue Code of 1986, as
amended.
(xxviii) YEAR 2000 AND EURO DISCLOSURES. All disclosure
regarding year 2000 compliance and the Euro conversion that is required
to be described under the 1933 Act and the 1933 Act Regulations
(including disclosures required by Staff Legal Bulletin Xx. 0, XXX
Xxxxxxx Xx. 00-0000 (July 29, 1998) and SEC Release No. 33-7609
-11-
16
(November 9, 1998)) has been included in the Prospectuses. Neither the
Company nor any of its subsidiaries will incur significant operating
expenses or costs to ensure that its information systems will be year
2000 compliant or to adjust its operating and information systems to
the conversion to a single currency in Europe, other than as disclosed
in the Prospectuses.
(b) REPRESENTATIONS AND WARRANTIES BY AUTONATION AND THE SELLING
SHAREHOLDER. AutoNation and the Selling Shareholder, jointly and severally,
represent and warrant to each International Manager as of the date hereof, as of
the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b), hereof and agrees with each
International Manager as follows:
(i) ACCURATE DISCLOSURE. To the best knowledge of AutoNation
and the Selling Shareholder, the representations and warranties of the
Company contained in Section 1(a) hereof are true and correct. At the
respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments
and supplements thereto did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. Neither the Prospectuses nor any amendments or supplements
thereto, at the time the Prospectuses or any amendments or supplements
thereto were issued and at the Closing Time (and, if any International
Option Securities are purchased, at the Date of Delivery), included or
will include an untrue statement of a material fact or omitted or will
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(ii) AUTHORIZATION OF AGREEMENTS. Each of AutoNation and the
Selling Shareholder has the full right, power and authority to enter
into this Agreement and the U.S. Purchase Agreement and to sell,
transfer and deliver the Securities.
(iii) GOOD AND MARKETABLE TITLE. The Selling Shareholder has
and will at the Closing Time and, if any Option Securities are
purchased, on the Date of Delivery have good and marketable title to
the Securities to be sold by the Selling Shareholder hereunder, free
and clear of any security interest, mortgage, pledge, lien, charge,
claim, equity or encumbrance of any kind, other than pursuant to this
Agreement; and upon delivery of such Securities and payment of the
purchase price therefor as herein contemplated, assuming each such
Underwriter has no notice of any adverse claim, each of the
Underwriters will receive good and marketable title to the Securities
purchased by it from the Selling Shareholder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.
-12-
17
(iv) ABSENCE OF MANIPULATION. Each of AutoNation and the
Selling Shareholder has not taken, and will not take, directly or
indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(v) ABSENCE OF DEFAULTS AND CONFLICTS. Neither AutoNation, the
Selling Shareholder nor any of their subsidiaries is in violation of
its charter or by-laws or in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which AutoNation, the
Selling Shareholder or any of their subsidiaries is a party or by which
it or any of them may be bound, or to which any of the property or
assets of AutoNation, the Selling Shareholder or any of their
subsidiaries is subject (collectively, "the AutoNation/Selling
Shareholder Agreements and Instruments") except for such defaults that
would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the U.S. Purchase
Agreement and the consummation of the transactions contemplated in this
Agreement, in the U.S. Purchase Agreement, and in the Registration
Statement (including the sale and delivery of the Securities) and
compliance by AutoNation and the Selling Shareholder with their
obligations under this Agreement and the U.S. Purchase Agreement have
been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or
Repayment Event under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of AutoNation
and the Selling Shareholder or any subsidiary pursuant to, the
AutoNation/Selling Shareholder Agreements and Instruments (except for
such conflicts, breaches or defaults or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or
by-laws of each of AutoNation and the Selling Shareholder or any
subsidiary or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over AutoNation, the
Selling Shareholder or any of their subsidiaries or any of their
assets, properties or operations.
(vi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency, is necessary or required for the performance by AutoNation and
the Selling Shareholder of their respective obligations hereunder, in
connection with the offering or sale of the Securities under this
Agreement and the U.S. Purchase Agreement or the consummation of the
transactions contemplated by this Agreement and the U.S. Purchase
Agreement, except such as have been already obtained or as may be
required under the 1933 Act or the 1933 Act Regulations and foreign or
state securities or blue sky laws.
-13-
18
(vii) RESTRICTION ON SALE OF SECURITIES. During a period of 90
days from the date of the Prospectuses, neither AutoNation nor the
Selling Shareholder will, without the prior written consent of the
Global Coordinator, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any share of Common Stock
or the Company's Class B Common Stock, par value $0.01 per share (the
"Class B Common Stock") or any securities convertible into or
exercisable or exchangeable for Common Stock and/or Class B Common
Stock or file any registration statement under the 1933 Act with
respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the
Common Stock and/or the Class B Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of such Stock or such other securities, in cash or otherwise.
(viii) NO ASSOCIATION WITH NASD. Neither AutoNation, the
Selling Shareholder nor any of their affiliates (within the meaning of
NASD Conduct Rule 2720(b)(1)(a)) directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common
control with, or is an associated person (within the meaning of Article
I, Section 1(q) of the By-laws of the National Association of
Securities Dealers, Inc.) of, any member firm of the National
Association of Securities Dealers, Inc.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of
the Company, AutoNation, the Selling Shareholder or any of the Company's
subsidiaries delivered to the Global Coordinator, the Lead Managers, or to
counsel for the International Managers shall be deemed a representation and
warranty by the Company, AutoNation or the Selling Shareholder, as the case may
be, to each International Manager as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO INTERNATIONAL MANAGERS; CLOSING.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Selling Shareholder agrees to sell to each International Manager,
severally and not jointly, and each International Manager, severally and not
jointly, agrees to purchase from the Selling Shareholder, at the price per share
set forth in Schedule B, the number of Initial International Securities set
forth in Schedule A opposite the name of such International Manager, plus any
additional number of Initial International Securities which such International
Manager may become obligated to purchase pursuant to the provisions of Section
10 hereof.
(b) OPTION SECURITIES. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Selling Shareholder hereby grants an option to the International
Managers, severally and not jointly, to purchase up to an additional 2,432,500
shares of Common Stock at the price per share set forth in Schedule B, less an
amount per share equal to any dividends or distributions declared by the Company
and
-14-
19
payable on the Initial International Securities but not payable on the
International Option Securities. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial International Securities upon
notice by the Global Coordinator to the Company and the Selling Shareholder
setting forth the number of International Option Securities as to which the
several International Managers are then exercising the option and the time and
date of payment and delivery for such International Option Securities. Any such
time and date of delivery for the Option Securities (a "Date of Delivery") shall
be determined by the Global Coordinator, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined. If the option is exercised as to all or
any portion of the International Option Securities, each of the International
Managers, acting severally and not jointly, will purchase that proportion of the
total number of International Option Securities then being purchased which the
number of Initial International Securities set forth in Schedule A opposite the
name of such International Manager bears to the total number of Initial
International Securities, subject in each case to such adjustments as the Global
Coordinator in its discretion shall make to eliminate any sales or purchases of
fractional shares.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
or at such other place as shall be agreed upon by the Global Coordinator and the
Company and the Selling Shareholder, at 9:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Global Coordinator and the
Company and the Selling Shareholder (such time and date of payment and delivery
being herein called "Closing Time").
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the Company, on each Date
of Delivery as specified in the notice from the Global Coordinator to the
Company and the Selling Shareholder.
Payment shall be made to the Selling Shareholder by wire transfer of
immediately available funds to a bank account designated by the Selling
Shareholder, against delivery to the Lead Managers for the respective accounts
of the International Managers of certificates for the International Securities
to be purchased by them. It is understood that each International Manager has
authorized the Lead Managers, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Initial International
Securities and the International Option Securities, if any, which it has agreed
to purchase. Xxxxxxx Xxxxx, individually and not as representative of the
International Managers, may (but shall not be obligated to) make payment
-15-
20
of the purchase price for the Initial International Securities or the
International Option Securities, if any, to be purchased by any International
Manager whose funds have not been received by the Closing Time or the relevant
Date of Delivery, as the case may be, but such payment shall not relieve such
International Manager from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
International Manager as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION
REQUESTS. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify
the Global Coordinator as soon as practicable, and confirm the notice
in writing, (i) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the Prospectuses
or any amended Prospectuses shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectuses or for additional
information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities
for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company
will promptly effect the filings necessary pursuant to Rule 424(b) and
will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)),
any Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectuses, will furnish the Global Coordinator
with copies of any such documents a reasonable amount of time prior to
such proposed filing or use,
-16-
21
as the case may be, and will not file or use any such document to which
the Global Coordinator or counsel for the International Managers shall
reasonably object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has
furnished or will deliver to the Lead Managers and counsel for the
International Managers, without charge, signed copies of the
Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates
of experts, and will also deliver to the Lead Managers, without charge,
a conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the
International Managers. The copies of the Registration Statement and
each amendment thereto furnished to the International Managers will be
identical to the electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company has delivered to
each International Manager, without charge, as many copies of each
preliminary prospectus as such International Manager reasonably
requested, and the Company hereby consents to the use of such copies
for purposes permitted by the 1933 Act. The Company will furnish to
each International Manager, without charge, during the period when the
International Prospectus is required to be delivered under the 1933 Act
or the Securities Exchange Act of 1934 (the "1934 Act"), such number of
copies of the International Prospectus (as amended or supplemented) as
such International Manager may reasonably request. The International
Prospectus and any amendments or supplements thereto furnished to the
International Managers will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company
will comply with the 1933 Act and the 1933 Act Regulations so as to
permit the completion of the distribution of the Securities as
contemplated in this Agreement, the U.S. Purchase Agreement and in the
Prospectuses. If at any time when a prospectus is required by the 1933
Act to be delivered in connection with sales of the Securities, any
event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the International Managers or
for the Company, to amend the Registration Statement or amend or
supplement any Prospectus in order that the Prospectuses will not
include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion
of such counsel, at any such time to amend the Registration Statement
or amend or supplement any Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such
-17-
22
statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will
furnish to the International Managers such number of copies of such
amendment or supplement as the International Managers may reasonably
request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best
efforts, in cooperation with the International Managers, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the
Global Coordinator may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration
Statement and any Rule 462(b) Registration Statement.
(g) RULE 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) LISTING. The Company will use its best efforts to effect
the listing of the Securities on the New York Stock Exchange (the
"NYSE").
(i) RESTRICTION ON SALE OF SECURITIES. During a period of 90
days from the date of the Prospectuses, the Company will not, without
the prior written consent of the Global Coordinator, (i) directly or
indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or
dispose of any share of Common Stock or the Company's Class B Common
Stock, par value $0.01 per share (the "Class B Common Stock") or any
securities convertible into or exercisable or exchangeable for Common
Stock and/or Class B Common Stock or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers,
in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock and/or the Class B Common Stock,
whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of such Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not
apply to (a) shares of Common Stock issued to a third party as
consideration for the Company's acquisition from such third party of a
non-hazardous
-18-
23
solid waste business and (b) options to purchase shares of Common Stock
granted under the Company's 1998 Stock Option Plan.
(j) REPORTING REQUIREMENTS. The Company, during the period
when the Prospectuses are required to be delivered under the 1933 Act
or the 1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the rules and regulations of the Commission
thereunder.
SECTION 4. PAYMENT OF EXPENSES. (a) EXPENSES. The Company, AutoNation
and the Selling Shareholder will pay or cause to be paid all expenses incident
to the performance of their obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters and the transfer of
the Securities between the International Managers and the U.S. Underwriters,
(iv) the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectuses and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of copies of the Blue Sky
Survey and any supplement thereto, (viii) the fees and expenses of any transfer
agent or registrar for the Securities, (ix) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the NASD of the terms of the sale of the Securities and (x)
the fees and expenses incurred in connection with the listing of the Securities
on the NYSE.
(b) EXPENSES OF AUTONATION AND THE SELLING SHAREHOLDER. AutoNation and
the Selling Shareholder will pay or cause to be paid all expenses incident to
the performance of their obligations under, and the consummation of the
transactions contemplated by, this Agreement, including (i) any stamp duties,
capital duties and stock transfer taxes, if any, payable upon the sale of the
Securities to the Underwriters, and their transfer between the Underwriters
pursuant to an agreement between such Underwriters, and (ii) the fees and
disbursements of its counsel and accountants.
(c) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Lead Managers in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company, AutoNation and the Selling Shareholder shall reimburse the
International Managers for all of
-19-
24
their reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the International Managers.
(d) ALLOCATION OF EXPENSES. The provisions of this Section shall not
affect any agreement that the Company, AutoNation and the Selling Shareholder
may make for the sharing of such costs and expenses.
SECTION 5. CONDITIONS OF INTERNATIONAL MANAGERS' OBLIGATIONS. The
obligations of the several International Managers hereunder are subject to the
accuracy of the representations and warranties of the Company, AutoNation and
the Selling Shareholder contained in Section 1 hereof or in certificates of any
officer of the Company or any subsidiary of the Company or on behalf of
AutoNation or the Selling Shareholder delivered pursuant to the provisions
hereof, to the performance by the Company of its covenants and other obligations
hereunder, and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the International Managers. A prospectus
containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) or, if the
Company has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the Lead
Managers shall have received the opinion, dated as of Closing Time, of
Akerman, Senterfitt & Xxxxxx, P.A., counsel for the Company, in form
and substance reasonably satisfactory to counsel for the International
Managers, together with signed or reproduced copies of such letter for
each of the other International Managers to the effect set forth in
Exhibit A-1 hereto and to such further effect as counsel to the
International Managers may reasonably request, based upon events
occurring or information discovered after the date hereof.
(c) OPINION OF COUNSEL FOR AUTONATION AND THE SELLING
SHAREHOLDER. At Closing Time, the Lead Managers shall have received the
favorable opinion, dated as of Closing Time, of Akerman, Senterfitt &
Xxxxxx, P.A., counsel for AutoNation and the Selling Shareholder and of
Xxxxxxx & Piper, P.C., Vermont counsel for the Selling Shareholder, in
form and substance satisfactory to counsel for the International
Managers, together with signed or reproduced copies of such letter for
each of the other International Managers to the effect set forth in
Exhibits A-1 and A-2, respectively, hereto and to such further effect
as counsel to the International Managers may reasonably request.
-20-
25
(d) OPINION OF COUNSEL FOR INTERNATIONAL MANAGERS. At Closing
Time, the Lead Managers shall have received the favorable opinion,
dated as of Closing Time, of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx,
counsel for the International Managers, together with signed or
reproduced copies of such letter for each of the other International
Managers with respect to the matters pertaining to the Company set
forth in clauses (i), (ii), (vi) through (viii), inclusive, (ix), (xi)
(solely as to the information in the Prospectus under "Description of
Capital Stock--Common Stock") and (xviii) and the matters set forth in
the penultimate paragraph of Exhibit A hereto. In giving such opinion
such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the
federal law of the United States and the General Corporation Law of the
State of Delaware, upon the opinions of counsel satisfactory to the
Lead Managers which may include counsel to the Company. Such counsel
may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of
officers of the Company and its subsidiaries and certificates of public
officials.
(e) COMPANY OFFICERS' CERTIFICATE. At Closing Time, there
shall not have been, since the date hereof or since the respective
dates as of which information is given in the Prospectuses, any
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, and the Lead Managers shall have
received a certificate of the Chief Executive Officer, the President or
a Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii)
the representations and warranties in Section 1(a) hereof are true and
correct with the same force and effect as though expressly made at and
as of Closing Time, (iii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied
at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of such officers, are contemplated by the Commission.
(f) AUTONATION AND SELLING SHAREHOLDER OFFICERS' CERTIFICATES.
At Closing Time the Lead Managers shall have received a certificate of
a Co-Chief Executive Officer, the President or a Vice President of each
of AutoNation and the Selling Shareholder, each dated as of Closing
Time, to the effect that (i) the representations and warranties in
Section 1(b) hereof are true and correct with the same force and effect
as though expressly made at and as of Closing Time, and (ii) AutoNation
or the Selling Shareholder, as the case may be, has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time.
(g) ACCOUNTANT'S COMFORT LETTER. At the time of the execution
of this Agreement, the Lead Managers shall have received from Xxxxxx
Xxxxxxxx LLP a letter
-21-
26
dated such date, in form and substance satisfactory to the Lead
Managers, together with signed or reproduced copies of such letter for
each of the other International Managers containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement
and the Prospectuses.
(h) BRING-DOWN COMFORT LETTER. At Closing Time, the Lead
Managers shall have received from Xxxxxx Xxxxxxxx LLP a letter, dated
as of Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (g) of this
Section, except that the specified date referred to shall be a date not
more than three business days prior to Closing Time.
(i) APPROVAL OF LISTING. At Closing Time, the Securities shall
have been approved for listing on the NYSE, subject only to official
notice of issuance.
(j) NO OBJECTION. The NASD has confirmed that it has not
raised any objection with respect to the fairness and reasonableness of
the underwriting terms and arrangements.
(k) LOCK-UP AGREEMENTS. At the date of this Agreement, the
Lead Managers shall have received an agreement substantially in the
form of Exhibit B hereto signed by AutoNation, the Selling Shareholder
and the persons listed on Schedule C hereto.
(l) PURCHASE OF INITIAL U.S. SECURITIES. Contemporaneously
with the purchase by the International Managers of the Initial
International Securities under this Agreement, the U.S. Underwriters
shall have purchased the Initial U.S. Securities under the U.S.
Purchase Agreement.
(m) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of
Delivery, counsel for the International Managers shall have been
furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the
Company, AutoNation and the Selling Shareholder in connection with the
issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Lead Managers and counsel for
the International Managers.
(n) CONDITIONS TO PURCHASE OF INTERNATIONAL OPTION SECURITIES.
In the event that the International Managers exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the
International Option Securities, the representations and warranties of
the Company, AutoNation and the Selling Shareholder contained herein
and the statements in any certificates furnished by the Company, any
subsidiary of the Company, AutoNation or the Selling Shareholder
hereunder shall be true and correct as
-22-
27
of each Date of Delivery and, at the relevant Date of Delivery, the
Lead Managers shall have received:
(i) COMPANY OFFICERS' CERTIFICATE. A certificate, dated
such Date of Delivery, of the Chief Executive
Officer, the President or a Vice President of the
Company and of the chief financial or chief
accounting officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to
Section 5(e) hereof remains true and correct as of
such Date of Delivery.
(ii) AUTONATION AND SELLING SHAREHOLDER OFFICERS'
CERTIFICATES. A certificate, dated such Date of
Delivery, of a Co-Chief Executive Officer, the
President or a Vice President of each of AutoNation
and the Selling Shareholder confirming that the
certificates delivered at the Closing Time pursuant
to Section 5(f) hereof remains true and correct as of
such Date of Delivery.
(iii) OPINION OF COUNSEL FOR COMPANY. The opinion of
Akerman, Senterfitt & Xxxxxx, P.A., counsel for the
Company, in form and substance reasonably
satisfactory to counsel for the International
Managers, dated such Date of Delivery, relating to
the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the
opinion required by Section 5(b) hereof.
(iv) OPINION OF COUNSEL FOR AUTONATION AND THE SELLING
SHAREHOLDER. The opinion of Akerman, Senterfitt &
Xxxxxx, P.A., counsel for AutoNation and the Selling
Shareholder and of Xxxxxxx & Piper, P.C., Vermont
counsel for the Selling Shareholder, in form and
substance reasonably satisfactory to counsel for the
International Managers, dated such Date of Delivery,
relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(c)
hereof.
(v) OPINION OF COUNSEL FOR INTERNATIONAL MANAGERS. The
favorable opinion of Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx, counsel for the International Managers,
dated such Date of Delivery, relating to the
International Option Securities to be purchased on
such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(d)
hereof.
-23-
28
(vi) BRING-DOWN COMFORT LETTER. A letter from Xxxxxx
Xxxxxxxx LLP, in form and substance satisfactory to
the Lead Managers and dated such Date of Delivery,
substantially in the same form and substance as the
letter furnished to the Lead Managers pursuant to
Section 5(h) hereof, except that the "specified date"
in the letter furnished pursuant to this paragraph
shall be a date not more than five days prior to such
Date of Delivery.
(o) TERMINATION OF AGREEMENT. If any condition specified in
this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of International Option Securities on a Date of Delivery which
is after the Closing Time, the obligations of the several International
Managers to purchase the relevant Option Securities, may be terminated
by the Lead Managers by notice to the Company at any time at or prior
to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF INTERNATIONAL MANAGERS. The Company, AutoNation
and the Selling Shareholder, jointly and severally, agree to indemnify and hold
harmless each International Manager and each person, if any, who controls any
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
-24-
29
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxxx
Xxxxx), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission or any such
alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto).
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS AND THE SELLING
SHAREHOLDER. Each International Manager severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, AutoNation,
each person, if any, who controls AutoNation within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, and the Selling Shareholder and each
person, if any, who controls the Selling Shareholder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such International Manager through the Lead Managers expressly
for use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the International Prospectus (or any amendment or
supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action;
-25-
30
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a) (ii) or (iii) effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of such
settlement.
(e) OTHER AGREEMENTS WITH RESPECT TO INDEMNIFICATION. The provisions of
this Section shall not affect any agreement among the Company, AutoNation and
the Selling Shareholder with respect to indemnification.
-26-
31
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, AutoNation
and the Selling Shareholder on the one hand and the International Managers on
the other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) 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, AutoNation and the Selling Shareholder on the one hand and of the
International Managers on the other hand in connection with the statements or
omissions, which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, AutoNation and the
Selling Shareholder on the one hand and the International Managers on the other
hand in connection with the offering of the International Securities pursuant to
this Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the International Securities pursuant to
this Agreement (before deducting expenses) received by the Company, AutoNation
and the Selling Shareholder and the total underwriting discount received by the
International Managers, in each case as set forth on the cover of the
International Prospectus, or, if Rule 434 is used, the corresponding location on
the Term Sheet, bear to the aggregate initial public offering price of the
International Securities as set forth on such cover.
The relative fault of the Company, AutoNation and the Selling
Shareholder on the one hand and the International Managers on the other hand
shall be determined by reference to, among other things, whether any such untrue
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the Company,
AutoNation or the Selling Shareholder or by the International Managers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, AutoNation, the Selling Shareholder and the International
Managers agree that it would not be just and equitable if contribution pursuant
to this Section 7 were determined by pro rata allocation (even if the
International Managers were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 7. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
-27-
32
Notwithstanding the provisions of this Section 7, no International
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 International Manager has otherwise been required to pay
by reason of any 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 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company, AutoNation or the Selling Shareholder within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company, AutoNation or the Selling Shareholder, as
the case may be. The International Managers' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number of
Initial International Securities set forth opposite their respective names in
Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement among the
Company, AutoNation and the Selling Shareholder with respect to contribution.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries, AutoNation or the Selling Shareholder submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any International Manager or controlling
person, or by or on behalf of the Company, AutoNation or the Selling
Shareholder, and shall survive delivery of the Securities to the International
Managers.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Lead Managers may terminate this
Agreement, by notice to the Company, AutoNation and the Selling Shareholder, at
any time at or prior to Closing Time (i) if there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the International Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial markets
in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
-28-
33
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Lead Managers, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company has been suspended or
materially limited by the Commission, or the NYSE, or if trading generally on
the American Stock Exchange or the NYSE or in the Nasdaq National Market has
been suspended or materially limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal or New York
authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE INTERNATIONAL MANAGERS. If
one or more of the International Managers shall fail at Closing Time or a Date
of Delivery to purchase the Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Lead Managers
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting International Managers, or any other underwriters,
to purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if, however,
the Lead Managers shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of International Securities to be purchased on such date,
each of the non-defaulting International Managers shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting
International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of International Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which occurs after
the Closing Time, the obligation of the International Managers to
purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without
liability on the part of any non-defaulting International Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a
-29-
34
termination of the obligation of the International Managers to purchase and the
Selling Shareholder to sell the relevant International Option Securities, as the
case may be, either the Lead Managers or the Selling Shareholder shall have the
right to postpone Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "International Manager" includes any
person substituted for a International Manager under this Section 10.
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers at Ropemaker
Place, 00 Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, attention of the Lead Managers;
with a copy to Xxxxxxx Xxxx Jacob, Esq., Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and notices to the
Company shall be directed to it at Republic Services, Inc., 000 X.X. Xxxxx
Xxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, attention of Xxxxx X. Xxxxxxx, General
Counsel; with a copy to Xxxxxxxx X. Xxxxx, Esq., Akerman, Senterfitt & Xxxxxx,
P.A., Xxx X.X. Xxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000; notices to AutoNation shall
be directed to it at AutoNation, Inc., 000 X.X. Xxxxx Xxxxxx, Xxxx Xxxxxxxxxx,
Xxxxxxx 00000, attention of Xxxxx X. Xxxx with a copy to Xxxxxxxx X. Xxxxx,
Esq., Akerman, Senterfitt & Xxxxxx, P.A.; and notices to the Selling Shareholder
shall be directed to it at AutoNation Insurance Company, Inc., 00 Xx. Xxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, attention of Xxx X. Xxxxxxx with a
copy to Xxxxxxxx X. Xxxxx, Esq., Akerman, Senterfitt & Xxxxxx, P.A.
SECTION 12. PARTIES. This Agreement shall each inure to the benefit of
and be binding upon the International Managers, the Company, AutoNation and the
Selling Shareholder and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the International Managers, the Company,
AutoNation and the Selling Shareholder and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the International Managers and the
Company, AutoNation and the Selling Shareholder and their respective successors,
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any International Manager shall be
deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
-30-
35
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
-31-
36
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company, AutoNation and the Selling
Shareholder a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the International Managers,
the Company, AutoNation and the Selling Shareholder in accordance with its
terms.
Very truly yours,
AUTONATION, INC.
By /s/ Xxxxx X. Xxxx
---------------------------------
Title: Senior Vice President
General Counsel
AUTONATION INSURANCE
COMPANY, INC.
By /s/ Gui X. Xxxxxxx
---------------------------------
Title: Vice President
REPUBLIC SERVICES, INC.
By /s/ Xxxxx X. Xxxxxxx
---------------------------------
Title: Senior Vice President
-32-
37
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX INTERNATIONAL
XXXXXXXXX, LUFKIN & XXXXXXXX INTERNATIONAL
DEUTSCHE BANK AG LONDON
BEAR, XXXXXXX INTERNATIONAL LIMITED
CIBC OPPENHEIMER INTERNATIONAL LTD.
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
SALOMON BROTHERS INTERNATIONAL LIMITED
By: XXXXXXX XXXXX INTERNATIONAL
By /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Authorized Signatory
For themselves and as Lead Managers of the other International Managers named in
Schedule A hereto
-33-
