Underwriting Agreement

KEYSTONE AUTOMOTIVE INDUSTRIES, INC.


2,700,000 Shares of Common Stock


UNDERWRITING AGREEMENT


June 20, 1996


MORGAN KEEGAN & COMPANY, INC. CROWELL, WEEDON & CO. As Representatives of the Several Underwriters named in Schedule II hereto c/o Morgan Keegan & Company, Inc. 50 Front Street Memphis, Tennessee 38103


Ladies and Gentlemen:


Keystone Automotive Industries, Inc., a California corporation (the "Company"), and the several shareholders of the Company named in Schedule I hereto (the "Selling Shareholders") propose to sell to the several underwriters named in Schedule II hereto (collectively, the "Underwriters") an aggregate of 2,700,000 shares (the "Firm Shares") of the Company's common stock (the "Common Stock"), as set forth in Schedule II hereto. The Firm Shares are to be sold to each Underwriter, acting severally and not jointly, in such amounts as are set forth in Schedule II opposite the name of such Underwriter. In addition, for the sole purpose of covering over-allotments in connection with the sale of the Firm Shares, the Selling Shareholders propose to grant to the Underwriters an option to purchase up to an additional 405,000 shares (the "Option Shares") of Common Stock. The Firm Shares and any Option Shares purchased pursuant to this Agreement are herein referred to as the "Shares."


You have advised the Company and the Selling Shareholders that you are authorized to enter into this Agreement on behalf of the several Underwriters for whom you are acting as representatives (the "Representatives"), and that Morgan Keegan & Company, Inc. has authority to execute this Agreement, bind the Underwriters and Representatives and take all actions on behalf of the Representatives referenced in this Agreement.


1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to, and agrees with, each Underwriter and each Selling Shareholder that:


(a) The Company has prepared and filed with the Securities and Exchange Commission (the "Commission") in accordance with the provisions of the Securities Act of 1933, as amended, and the


Exhibit 10.33


rules and regulations of the Commission thereunder (collectively, the "Act"), a registration statement on Form S-1 (No. 333-3994), including a preliminary prospectus, subject to completion, relating to the Shares. The registration statement, as amended at the time it becomes effective, including financial statements and exhibits and the information (if any) contained in a prospectus that is deemed to be a part of the registration statement at the time of its effectiveness pursuant to Rule 430A under the Act, is hereinafter referred to as the "Registration Statement," and the prospectus in the form first used to confirm sales of the Shares is hereinafter referred to as the "Prospectus."


(b) No order suspending the effectiveness of the Registration Statement or preventing or suspending the use of the Prospectus or any preliminary prospectus has been issued and no proceedings for that purpose are pending, threatened or, to the knowledge of the Company, contemplated by the Commission; no stop order suspending the sale of the Shares in any jurisdiction designated by you pursuant to Section 5(d) hereof has been issued and no proceedings for that purpose are pending, threatened or, to the knowledge of the Company, contemplated; and any request of the Commission and each securities authority or agency of each other jurisdiction for additional information (to be included in the Registration Statement or the Prospectus or otherwise) has been complied with.


(c) Each preliminary prospectus in the form filed as part of the Registration Statement as originally filed or filed as part of any amendment thereto, or, if different, in the form used in connection with the offering of the Shares, complied fully in all material respects when so filed or used with the Act, and when the Registration Statement becomes effective and at all times subsequent thereto, the Registration Statement (including, if applicable, the information deemed to be part of the Registration Statement at the time it was declared effective pursuant to Rule 430A under the Act) and the Prospectus and any supplements or amendments thereto, shall comply in all material respects with the provisions of the Act and the Registration Statement and any such amendment thereto at the time such Registration Statement or such amendment becomes effective will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectus and any supplements or amendments thereto, will not at any such time contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the foregoing shall not apply to statements in, or omissions from, any such document, in reliance upon, and in conformity with, written information furnished to the Company by you, specifically for use in the preparation thereof. The Company and the Selling Shareholders acknowledge for all purposes under this Agreement (including this paragraph and Section 8 hereof) that the statements


2.


appearing in any preliminary prospectus, the Prospectus or the Registration Statement in the first, second and sixth paragraphs and the penultimate sentence of the eighth paragraph under the caption "Underwriting", the last paragraph on the cover page and the inside front cover concerning stabilization and overallotment by the Underwriters constitute the only written information furnished to the Company by you for use in the Registration Statement or the Prospectus or any preliminary prospectus (or any amendment or supplement thereto). There is no contract or document required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed as required.


(d) Ernst & Young LLP, whose report appears in the Prospectus, are, to the best knowledge of the Company, independent public accountants with respect to the Company as required by the Act. The financial statements (including the related notes) included in the Prospectus and the Registration Statement (and any amendments or supplements thereto) comply as to form with the requirements of the Act, present fairly the financial condition, the results of the operations and changes in cash flows and equity of the entities purported to be shown thereby at the dates and for the periods indicated and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods indicated; and the other financial and statistical information and the supporting schedules included in the Prospectus and the Registration Statement (and any amendments or supplements thereto), present fairly, in all material respects, the information required to be stated therein. No other financial statements or schedules are required by Form S-1 or otherwise to be included in the Registration Statement or the Prospectus.


(e) The only subsidiary of the Company is Keystone Warehouse Distributors, Inc., a California corporation (the "Subsidiary"). The Subsidiary is not a "significant" subsidiary as defined under the Act, and has no assets, liabilities, employees or operations. The Company has been duly organized and is validly existing as a corporation in good standing under the laws of California, with full corporate power and authority to own or lease and occupy its properties and conduct its business as it is currently being conducted and as described in the Prospectus and to authorize the offering of the Shares and to execute, deliver and perform this Agreement and to issue, sell and deliver the Shares to be sold by it, and is duly qualified to do business and is in good standing in each jurisdiction in which the character of the business conducted by it or the location of the properties owned or leased by it makes such qualification necessary except where the failure to be so qualified or be in good standing would not have a Material Adverse Effect (as defined); and the Company holds all licenses, certificates and permits from governmental authorities necessary for the conduct of its business as described in the Prospectus. The expiration of any such licenses, permits or other governmental authorizations would not materially affect the


3.


operations of the Company. Complete and correct copies of the restated articles of incorporation and bylaws of the Company and all amendments thereto have been delivered to you, and no changes therein will be made subsequent to the date hereof and prior to the date of the consummation of the sale of the Shares.


(f) The capitalization of the Company is as set forth under the caption "Capitalization" in the Prospectus, and the Common Stock conforms to all statements relating thereto contained in the Registration Statement and the Prospectus; the outstanding shares of Common Stock (including any Shares to be purchased by the Underwriters from the Selling Shareholders) have been, and the Shares that are being sold by the Company, upon issuance and delivery and payment therefor in the manner herein described, will be, duly authorized, validly issued, fully paid and nonassessable. Except for the capital stock of the Subsidiary, the Company does not own, and at the date of the consummation of the sale of the Firm Shares will not own, directly or indirectly, any shares of stock or any other equity or long-term debt securities of any corporation or have any equity interest in any firm, partnership, joint venture, association or other entity. There are no preemptive or other rights to subscribe for or to purchase, or any restriction upon the voting or transfer of, any shares of Common Stock pursuant to the Company's restated articles of incorporation, bylaws or other governing documents or any agreement or other instrument to which the Company is a party or by which it may be bound. Neither the filing of the Registration Statement nor the offering or sale of the Shares as contemplated by this Agreement gives rise to any rights, other than those which have been waived or satisfied, for or relating to the registration of any shares of Common Stock.


(g) There has not been any material adverse change in, or any adverse development which materially affects, the business, properties, financial condition, results of operations or prospects of the Company and the Subsidiary, taken as a whole, from the date as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein, and neither the Company nor the Subsidiary has, directly or indirectly, incurred any liabilities or obligations, direct or contingent, or entered into any transactions, not in the ordinary course of business, which are material to the business of the Company and the Subsidiary, taken as a whole, and there has not been any change in the capital stock of, or any incurrence of long-term debt or material increase in short-term debt by, the Company, or any issuance or grant of options, warrants or rights to purchase the capital stock of the Company, or any declaration or payment of any dividend or other distribution on the capital stock of the Company from the date as of which information is given in the Registration Statement and the Prospectus.


(h) The Company is not, nor with the giving of notice or lapse of time or both would be, in violation of or in default under


4.


the restated articles of incorporation or bylaws of the Company, or any material agreement, indenture or other instrument, to which the Company is a party or by which it is bound, or to which its properties are subject. Neither the issuance, sale or delivery by the Company of the Shares, nor the execution, delivery and performance of this Agreement nor the consummation by the Company of the transactions contemplated hereby will result in a violation of, or constitute a default under, the restated articles of incorporation or bylaws of the Company or the Subsidiary, or any agreement, indenture or other instrument to which the Company or the Subsidiary is a party or by which either of them is bound, or to which either of their properties is subject, nor will the performance by the Company of its obligations hereunder violate any law, ordinance, rule, administrative regulation or decree of any court or any governmental agency or body having jurisdiction over the Company or the Subsidiary or any of their respective properties or assets, or result in the creation or imposition of any lien, charge, claim or encumbrance upon any property or asset of the Company. Except for permits and similar authorizations required under the Act and the securities or "blue sky" laws of certain jurisdictions and for such permits and authorizations which have been obtained, no consent, approval, authorization or order of any court, governmental agency or body or financial institution is required in connection with the consummation of the transactions contemplated by this Agreement.


(i) This Agreement has been duly and validly authorized, executed and delivered by the Company and constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms except as rights to indemnity and contribution hereunder may be limited by federal or state securities laws or principles of public policy, and except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors' rights generally or by general equitable principles.


(j) The Company has good and marketable title to its properties, free and clear of all liens, encumbrances and defects except such as are described or referred to in the Prospectus or such as do not materially affect the value of such property and do not interfere with the use made or proposed to be made of such property by the Company, and any real property and buildings held under lease by the Company are held by it under valid, existing and enforceable leases with such exceptions as are not material and do not interfere with the use made or proposed to be made of such property and buildings by the Company and except as the enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors' rights generally or by general equitable principles. The properties of the Company necessary to the conduct of its business (as presently conducted and as described in the Prospectus) are in good repair (reasonable wear and tear excepted)


5.


insured in accordance with industry practice and suitable for their uses.


(k) Neither the Company nor the Subsidiary nor any other person or entity for whom the Company or the Subsidiary is or may be liable is in violation of any federal, state, local, provincial or foreign laws or regulations relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products, asbestos or asbestos-containing materials, or polychlorinated biphenyls ("Materials of Environmental Concern"), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern (collectively, "Environmental Laws"), which violation could have a material adverse effect on the condition, financial or otherwise, or the earnings, cash flow, business affairs or business prospects of the Company (a "Material Adverse Effect"). "Violation" includes, but is not limited to, noncompliance with any permit or other governmental authorization required under applicable Environmental Laws and noncompliance with the terms and conditions of any such permit or authorization.


(l) The Company has not received any communication (written or oral), whether from a governmental authority, citizens' group, employee or otherwise, alleging that the Company or any other person or entity for whom the Company is or may be liable is not in full compliance with any Environmental Laws or permit or authorization required under applicable Environmental Laws, and there are no circumstances that may prevent or interfere with such full compliance in the future, except where failure to so comply would not have a Material Adverse Effect.


(m) There is no claim, action, cause of action, investigation or notice (written or oral) by any person or entity alleging potential liability (including, without limitation, potential liability for investigatory costs, natural resources damages, property damages, personal injuries or penalties) arising out of, based on or resulting from (i) the presence in or release into the environment of any Materials of Environmental Concern at any location owned, leased or operated, now or in the past, by the Company or any other person or entity for whom the Company is or may be liable, or (ii) circumstances forming the basis of any violation or alleged violation of any Environmental Law (collectively, "Environmental Claims") pending or threatened against the Company or to the Company's knowledge, any other person or entity whose liability for any Environmental Claim the Company has retained or assumed either contractually or by operation of law.


6.


(n) Except as set forth in the Registration Statement and Prospectus, there are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission, discharge, presence or disposal of any Materials of Environmental Concern, that could form the basis of any Environmental Claim against the Company with respect to property owned, leased or operated by or for the Company, now or in the past, or against any person or entity whose liability for any Environmental Claim the Company has retained or assumed either contractually or by operation of law.


(o) Except as would not, singly or in the aggregate, have a Material Adverse Effect, the Company has not (A) violated any applicable federal, state, provincial or foreign law relating to employment or employment practices or the terms and conditions of employment, including, without limitation, discrimination in the hiring, promotion or pay of employees, wages, hours of work, plant closings and layoffs, collective bargaining, and occupational safety and health, or any provisions of the Employee Retirement Income Security Act of 1974 ("ERISA") or the rules and regulations promulgated thereunder or any other applicable law (whether foreign or domestic) relating to or governing the operation or maintenance of any plan or arrangement falling within the definition of an "employee benefit plan" (as such term is defined in Section 3(3) of ERISA) or any other employee benefit plan or arrangement, nor (B) engaged in any unfair labor practice. There is (i) no unfair labor practice charge or complaint pending or threatened against the Company before the National Labor Relations Board or any corresponding state, local, provincial or foreign agency, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending or threatened against the Company which would, singly or in the aggregate, have a Material Adverse Effect; and (ii) no union representation claim pending with respect to the employees of the Company and to the Company's knowledge, no union organizing activities taking place. No labor dispute involving the employees of the Company is pending or is threatened or to the Company's knowledge, is imminent which could singly or in the aggregate have a Material Adverse Effect; and the Company is not aware of any existing, threatened or imminent labor disturbance by the employees of any principal suppliers, manufacturers or contractors of the Company which could singly or in the aggregate have a Material Adverse Effect.


(p) There is no legal or governmental proceeding to which the Company is a party or to which any of its property is subject or which is pending or, to the Company's knowledge, threatened or contemplated against the Company which could result in any Material Adverse Effect or which is required to be disclosed in the Registration Statement or the Prospectus.


(q) The Company is not in violation of any law, ordinance, rule, administrative regulation or decree known to the Company of any court or governmental agency or body having


7.


jurisdiction over the Company or any of its properties or assets, which violation could have a Material Adverse Effect.


(r) The Company has not taken, and shall not take, directly or indirectly, any action designed to cause or result in, or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Shares.


(s) The Company and the Subsidiary have timely (giving effect to permitted extensions) and properly prepared and filed all necessary federal, state, local and foreign income, franchise and any other required tax returns and have paid all taxes shown as due thereon (other than those being contested in good faith), and neither the Company nor the Subsidiary has any knowledge of any tax deficiency which has been or might have a Material Adverse Effect.


(t) (A) Neither the Company nor any existing officers or directors has at any time and (B) no employee or agent acting on behalf of the Company has at any time within the last five (5) years, (i) made any contributions to any candidate for political office in violation of law, or failed to disclose fully any contributions to any candidate for political office in accordance with any applicable statute, rule, regulation or ordinance requiring such disclosure, (ii) made any payment to any local, state, federal or foreign governmental officer or official, or other person charged with similar public or quasi-public duties, other than payments required or allowed by applicable law, (iii) made any payment outside the ordinary course of business to any purchasing or selling agent or person charged with similar duties of any entity to which the Company sells or from which the Company buys products for the purpose of influencing such agent or person to buy products from or sell products to the Company, or (iv) engaged in any transaction, maintained any bank account or used any corporate funds except for transactions, bank accounts and funds which have been and are reflected in the normally maintained books and records of the Company.


(u) Except as contemplated by this Agreement, the Company is not aware of any claims for services in the nature of a finder's fee, brokerage fee or otherwise with respect to this offering for which the Company or any of the several Underwriters may be responsible.


(v) The Company owns or possesses adequate rights to use all trademarks, service marks, trade names and copyrights necessary for the conduct of its business as described in the Prospectus and has taken reasonable security measures to protect the secrecy, confidentiality and value of its trade secrets and know-how which are valid and protectible and are not part of the public knowledge or literature and which are necessary for, used in, or proposed to be used in the conduct of its business as described in the Prospectus. The Company has not received any notice of


8.


infringement of or conflict with, and the Company, to the best of its knowledge, is not infringing or in conflict with, asserted rights of others with respect to any trademarks, service marks, trade names, copyrights or trade secrets.


(w) There are no outstanding loans or advances or guarantees of indebtedness by the Company to or for the benefit of any affiliate of the Company, any of the officers or directors of the Company, or any of the members of the families of any of the foregoing, which are required by the Act to be described in the Registration Statement or the Prospectus except such that are so described.


(x) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorization, (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with generally accepted accounting principles and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.


Any certificate signed by any duly authorized officer of the Company or by or on behalf of the Selling Shareholders, respectively, and delivered to you or counsel for the Underwriters shall be deemed a representation and warranty by the Company or the Selling Shareholders, respectively, to each Underwriter as to the matters covered thereby.


2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS.


(a) Each Selling Shareholder, severally and not jointly, represents and warrants to, and agrees with, each Underwriter, the Company and the other Selling Shareholders that:


(i) The execution, delivery and performance of this Agreement by such Selling Shareholder, the sale of the Shares to be sold by such Selling Shareholder, and the performance of this Agreement and the consummation of the transactions contemplated hereby will not conflict with or result in a breach of any of the terms or provisions, or constitute a default or cause an acceleration of any obligation under any agreement, indenture or other instrument to which such Selling Shareholder is a party or by which such Selling Shareholder or the property of such Selling Shareholder is subject, nor will the performance by such Selling Shareholder of his obligations hereunder violate any law, ordinance, rule, administrative regulation or decree of any court or any governmental agency or body known to such Selling Shareholder having jurisdiction over such Selling Shareholder or


9.


any of his properties or assets, or result in the creation or imposition of any lien, charge, claim, or encumbrance upon any property or asset of such Selling Shareholder.


(ii) Such Selling Shareholder is, and on the applicable Closing Date (as defined) will be, the lawful owner of the number of Shares to be sold by such Selling Shareholder and has, and on the applicable Closing Date will have, good and marketable title to the Shares to be sold by him to the Underwriters hereunder, free and clear of any security interest, mortgage, pledge, lien, encumbrance, restriction on transfer, claim or equity (including, without limitation, claims made by reason of community property rights), other than those imposed by the Act, the securities or Blue Sky laws of certain jurisdictions and the Power of Attorney and Custody Agreement, as defined below); and upon delivery to the Underwriters of the Shares to be sold by such Selling Shareholder hereunder and payment of the purchase price therefor by the Underwriters as herein contemplated in good faith and without notice of an adverse claim within the meaning of Article VII of the Uniform Commercial Code, each of the Underwriters will receive good and marketable title to its ratable share of the Shares purchased by it from such Selling Shareholder, free and clear of any security interest, mortgage, pledge, lien, encumbrance, restriction on transfer, claim or equity (including, without limitation, claims made by reason of community property rights), other than those imposed by the Act and the securities ...