Exhibit 1.1
CGSH draft: 5/14/99
Concord EFS, Inc.
24,770,500 Shares/a/
Common Stock
($0.33 1/3 par value)
U.S. Underwriting Agreement
New York, New York
., 1999
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxx, Sachs & Co.
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxx & Company, Inc.
As U.S. Representatives of the several
U.S. Underwriters,
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Concord EFS, Inc., a corporation organized under the laws of Delaware
(the "Company"), proposes to sell to the several U.S. Underwriters, for whom the
U.S. Representatives are acting as representatives, 1,600,000 shares of Common
Stock, $0.33 1/3 par value ("Common Stock") of the Company, and the Selling
Stockholders propose to sell to the several U.S. Underwriters 23,170,500 shares
of Common Stock (said shares to be issued and sold by the Company and shares to
be sold by the Selling Stockholders collectively being hereinafter called the
"U.S. Underwritten Securities"). The Company also proposes to grant to the U.S.
Underwriters an option to purchase up to 3,712,000 shares of Common Stock to
cover over-allotments (the "U.S. Option Securities" and together with the U.S.
Underwritten Securities, the "U.S. Securities"). It is understood that the
Company and the Selling Stockholders are concurrently entering into the
International Underwriting Agreement providing for the sale by the Company and
the Selling Stockholders of an aggregate of 6,192,625 shares of Common Stock
(said shares to be sold by the Company and the Selling Stockholders pursuant to
the International Underwriting Agreement being hereinafter called the
"International Underwritten Securities") and providing for the grant to the
International Underwriters of an option to purchase from the Company up to
928,000 shares of Common Stock (the "International Option Securities" and
together with the International Underwritten Securities, the "International
------------
/a/ Plus an option to purchase from the Company up to 3,712,000 additional
U.S. Securities to cover over-allotments.
Securities"). It is further understood and agreed that the International
Underwriters and the U.S. Underwriters have entered into an Agreement Between
U.S. Underwriters and International Underwriters dated the date hereof (the
"Agreement Between U.S. Underwriters and International Underwriters"), pursuant
to which, among other things, the International Underwriters may purchase from
the U.S. Underwriters a portion of the U.S. Securities to be sold pursuant to
this U.S. Underwriting Agreement and the U.S. Underwriters may purchase from the
International Underwriters a portion of the International Securities to be sold
pursuant to the International Underwriting Agreement. The use of the neuter in
this U.S. Underwriting Agreement shall include the feminine and masculine
wherever appropriate. Any reference herein to the Registration Statement, the
Preliminary Prospectuses or the Prospectuses shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Exchange Act on or before the Effective Date
of the Registration Statement or the issue date of such Preliminary Prospectuses
or the Prospectuses, as the case may be; and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration Statement,
any Preliminary Prospectuses or the Prospectuses shall be deemed to refer to and
include the filing of any document under the Exchange Act after the Effective
Date of the Registration Statement, or the issue date of any Preliminary
Prospectuses or the Prospectuses, as the case may be, deemed to be incorporated
therein by reference. Certain terms used in this U.S. Underwriting Agreement
are defined in Section 17 hereof.
1. Representations and Warranties.
(i) The Company represents and warrants to, and agrees with, each U.S.
Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form-3 under the Act
and has prepared and filed with the Commission a registration statement
(file number 333-77829) on Form S-3, including related preliminary
prospectuses, for registration under the Act of the offering and sale of
the Securities. The Company may have filed one or more amendments thereto,
including the related preliminary prospectuses, each of which has
previously been furnished to you. The Company will next file with the
Commission either (1) prior to the Effective Date of such registration
statement, a further amendment to such registration statement (including
the form of final prospectuses) or (2) after the Effective Date of such
registration statement, final prospectuses in accordance with Rules 430A
and 424(b). In the case of clause (2), the Company has included in such
registration statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the
Prospectuses. As filed, such amendment and form of final prospectuses, or
such final prospectuses, shall contain all Rule 430A Information, together
with all other such required information, and, except to the extent the
U.S. Representatives shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond
that contained in the latest Preliminary Prospectuses) as the Company has
advised you, prior to the Execution Time, will be included or made therein.
2
It is understood that two forms of prospectuses are to be used in
connection with the offering and sale of the Securities: one form of
prospectus relating to the U.S. Securities, which are to be offered and
sold to United States and Canadian Persons, and one form of prospectus
relating to the International Securities, which are to be offered and sold
to persons other than United States and Canadian Persons. The U.S.
Prospectus and the International Prospectus are identical except for the
outside front cover page and the outside back cover page.
(b) On the Effective Date, the Registration Statement did or will, and
when the Prospectuses are first filed (if required) in accordance with Rule
424(b) and on the Closing Date (as defined in this U.S. Underwriting
Agreement) and on any date on which Option Securities are purchased, if
such date is not the Closing Date (a "settlement date"), each Prospectus
(and any supplements thereto) will, comply in all material respects with
the applicable requirements of the Act and the Exchange Act and the
respective rules thereunder; on the Effective Date and at the Execution
Time, the Registration Statement did not or will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, each Prospectus, if not filed
pursuant to Rule 424(b), will not, and on the date of any filing pursuant
to Rule 424(b) and on the Closing Date and any settlement date, each
Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or 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; provided,
however, that the Company makes no representations or warranties as to the
information contained in or omitted from the Registration Statement, or the
Prospectuses (or any supplement thereto) in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion in the
Registration Statement or the Prospectuses (or any supplement thereto).
(c) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized
with full corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as described in
the Prospectuses, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification;
(d) All the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectuses, all
outstanding shares of capital stock of the Subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries free and clear
of any perfected security interest or any other security interests, claims,
liens or encumbrances;
(e) the Company's authorized equity capitalization is as set forth in
the Prospectuses; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectuses; the
outstanding shares of Common Stock (including the Securities being sold
under the Underwriting Agreements by the
3
Selling Stockholders) have been duly and validly authorized and issued and
are fully paid and nonassessable; the Securities being sold under the
Underwriting Agreements by the Company have been duly and validly
authorized, and, when issued and delivered to and paid for by the U.S.
Underwriters pursuant to this U.S. Underwriting Agreement and by the
International Underwriters pursuant to the International Underwriting
Agreement, will be fully paid and nonassessable; the Securities being sold
by the Selling Stockholders are duly quoted, and admitted and authorized
for trading on the Nasdaq National Market and the Securities being sold
hereunder by the Company are duly quoted, and admitted and authorized for
trading, subject to official notice of issuance, on the Nasdaq National
Market; the certificates for the Securities are in valid and sufficient
form; the holders of outstanding shares of capital stock of the Company are
not entitled to preemptive or other rights to subscribe for the Securities;
and, except as set forth in the Prospectuses, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are outstanding;
(f) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectuses, or
to be filed as an exhibit thereto, which is not described or filed as
required; and the statements in the Prospectuses under the headings "United
States Federal Tax Consequences to Non-United States Holders" and "Business
Supervision and Regulation" fairly summarize the matters therein described.
(g) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms.
(h) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectuses, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the U.S. Underwriters in the manner contemplated herein and
in the Prospectuses.
(j) Neither the issue and sale of the Securities nor the consummation
of any other of the transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of its subsidiaries pursuant to, (i) the charter or
by-laws of the Company or any of its subsidiaries, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
to which the Company or any of its subsidiaries is a party or bound or to
which its or their property is
4
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any of its
subsidiaries or any of its or their properties.
(k) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement, except
for the registration rights of the Selling Stockholders.
(l) The consolidated historical financial statements and schedules of
the Company and its consolidated subsidiaries included in the Prospectuses
and the Registration Statement present fairly in all material respects the
financial condition, results of operations and cash flows of the Company as
of the dates and for the periods indicated, comply as to form with the
applicable accounting requirements of the Act and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption "Selected
Consolidated Financial Data" in the Prospectuses and Registration Statement
fairly present, on the basis stated in the Prospectuses and the
Registration Statement, the information included therein.
(m) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included and
incorporated by reference in the Prospectuses any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectuses; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectuses, there has not been any change in the capital stock or long-
term debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse change,
in or affecting the condition (financial or otherwise), earnings, business
or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectuses
(exclusive of any supplement thereto).
(n) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (i) could reasonably
be expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby or (ii) could reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business.
(o) Each of the Company and each of its subsidiaries owns or leases
all such properties as are necessary to the conduct of its operations as
presently conducted.
5
(p) Neither the Company nor any subsidiary is in violation or default
of (i) any provision of its charter or bylaws, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
to which it is a party or bound or to which its property is subject, or
(iii) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or such
subsidiary or any of its properties, as applicable.
(q) Ernst & Young LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Prospectuses, are independent public
accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder.
(r) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery
of this Agreement or the issuance by the Company or sale by the Company of
the Securities.
(s) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Prospectuses (exclusive of any supplement thereto) and has paid all
taxes required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is currently
being contested in good faith or as would not have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectuses
(exclusive of any supplement thereto).
(t) No labor problem or dispute with the employees of the Company or
any of its subsidiaries exists or is threatened or imminent, and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or its subsidiaries' principal suppliers,
contractors or customers, that could have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectuses (exclusive of any
supplement thereto).
(u) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; all policies of
6
insurance insuring the Company or any of its subsidiaries or their
respective businesses, assets, employees, officers and directors are in
full force and effect; the Company and its subsidiaries are in compliance
with the terms of such policies and instruments in all material respects;
and there are no claims by the Company or any of its subsidiaries under any
such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; neither the
Company nor any such subsidiary has been refused any insurance coverage
sought or applied for; and neither the Company nor any such subsidiary has
any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
at a cost that would not have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth
in or contemplated in the Prospectuses (exclusive of any supplement
thereto).
(v) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company or
any other subsidiary of the Company, except as described in or contemplated
by the Prospectuses.
(w) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Prospectuses (exclusive of any supplement thereto).
(x) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (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 the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(y) The Company has not taken, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the
7
Exchange Act or otherwise, in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Securities.
(z) The Company and its subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) have
not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not, individually
or in the aggregate, have a material adverse change in the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth
in or contemplated in the Prospectuses (exclusive of any supplement
thereto). Neither the Company nor any of the subsidiaries has been named as
a "potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(aa) Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Xxxxxxx 000 xx
xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974 ("ERISA")
and the regulations and published interpretations thereunder with respect
to each "plan" (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company and its
subsidiaries are eligible to participate and each such plan is in
compliance in all material respects with the presently applicable
provisions of ERISA and such regulations and published interpretations. The
Company and its subsidiaries have not incurred any unpaid liability to the
Pension Benefit Guaranty Corporation (other than for the payment of
premiums in the ordinary course) or to any such plan under Title IV of
ERISA.
(bb) The subsidiaries listed on Annex A attached hereto are the only
significant subsidiaries of the Company as defined by Rule 1-02 of
Regulation S-X (the "Subsidiaries").
(cc) The Company and its subsidiaries own, possess, license or have
other rights to use, on reasonable terms, all patents, patent applications,
trade and service marks, trade and service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how and
other intellectual property (collectively, the "Intellectual Property")
necessary for the conduct of the Company's business as now conducted or as
proposed in the Prospectuses to be conducted, and (a) to the Company's
knowledge, there are no rights of third parties to any such Intellectual
Property; (b) to the Company's best knowledge, there is no material
infringement by third parties of any such Intellectual Property; (c) there
is no pending or, to the Company's best knowledge, threatened action, suit,
proceeding or claim by others challenging the Company's rights
8
in or to any such Intellectual Property, and the Company is unaware of any
facts which would form a reasonable basis for any such claim; (d) to the
Company's best knowledge, there is no pending or threatened action, suit,
proceeding or claim by others challenging the validity or scope of any such
Intellectual Property, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; (e) there is no pending or, to
the Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of others,
and the Company is unaware of any other fact which would form a reasonable
basis for any such claim; (f) to the Company's knowledge, there is no U.S.
patent or published U.S. patent application which contains claims that
dominate or may dominate any Intellectual Property described in the
Prospectuses as being owned by or licensed to the Company or that
interferes with the issued or pending claims of any such Intellectual
Property; and (g) there is no prior art of which the Company is aware that
may render any U.S. patent held by the Company invalid or any U.S. patent
application held by the Company unpatentable which has not been disclosed
to the U.S. Patent and Trademark Office.
(dd) The Company and its subsidiaries do not have any material lending
or other relationship with any bank or lending affiliate of the
Underwriters and the Company does not intend to use any of the proceeds
from the sale of the Securities hereunder to repay any outstanding debt
owed to any affiliate of the Underwriters.
(ee) The Company and its subsidiaries have implemented a
comprehensive, detailed program to analyze and address the risk that the
computer hardware and software used by them may be unable to recognize and
properly execute date-sensitive functions involving certain dates prior to
and any dates after December 31, 1999 (the "Year 2000 Problem"), and have
determined that such risk will be remedied on a timely basis without
material expense and will not have a material adverse effect upon the
financial condition and results of operations of the Company and its
subsidiaries, taken as a whole; and the Company believes, after due
inquiry, that each supplier, vendor, customer or financial service
organization used or serviced by the Company and its subsidiaries has
remedied or will remedy on a timely basis the Year 2000 Problem, except to
the extent that a failure to remedy by any such supplier, vendor, customer
or financial service organization would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole. The Company is in
compliance with the Commission's staff legal bulletin No. 5 dated January
12, 1998 related to Year 2000 compliance, as amended to date.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in
connection with the offering of the Securities shall be deemed a
representation and warranty by the Company, as to matters covered thereby,
to each U.S. Underwriter.
(ii) Each Selling Stockholder represents and warrants to, and
agrees with, each U.S. Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the U.S.
Securities to be sold by such Selling Stockholder under this U.S.
Underwriting Agreement and upon sale and
9
delivery of, and payment for, such U.S. Securities, as provided in this
U.S. Underwriting Agreement, such Selling Stockholder will convey to the
U.S. Underwriters good and marketable title to such U.S. Securities, free
and clear of all liens, encumbrances, equities and claims whatsoever.
(b) Such Selling Stockholder has not taken, directly or indirectly,
any action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the U.S. Securities.
(c) Certificates in negotiable form for such Selling Stockholder's
U.S. Securities have been placed in custody, for delivery pursuant to the
terms of this U.S. Underwriting Agreement, under a Custody Agreement and
Power of Attorney duly authorized (if applicable) executed and delivered by
such Selling Stockholder, in the form heretofore furnished to you (the
"Custody Agreement") with _______________, as Custodian (the "Custodian");
the U.S. Securities represented by the certificates so held in custody for
each Selling Stockholder are subject to the interests under this U.S.
Underwriting Agreement of the U.S. Underwriters; the arrangements for
custody and delivery of such certificates, made by such Selling Stockholder
under this U.S. Underwriting Agreement and under the Custody Agreement, are
not subject to termination by any acts of such Selling Stockholder, or by
operation of law, whether by the death or incapacity of such Selling
Stockholder or the occurrence of any other event; and if any such death,
incapacity or any other such event shall occur before the delivery of such
U.S. Securities under this U.S. Underwriting Agreement, certificates for
the U.S. Securities will be delivered by the Custodian in accordance with
the terms and conditions of this U.S. Underwriting Agreement and the
Custody Agreement as if such death, incapacity or other event had not
occurred, regardless of whether or not the Custodian shall have received
notice of such death, incapacity or other event.
(d) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated in this U.S.
Underwriting Agreement, except such as may have been obtained under the Act
and such as may be required under the blue sky laws of any jurisdiction and
the securities laws of any jurisdiction outside the United States in
connection with the purchase and distribution of the U.S. Securities by the
U.S. Underwriters and such other approvals as have been obtained.
(e) Neither the sale of the U.S. Securities being sold by such
Selling Stockholder nor the consummation of any other of the transactions
in this U.S. Underwriting Agreement contemplated by such Selling
Stockholder or the fulfillment of the terms hereof by such Selling
Stockholder will conflict with, result in a breach or violation of, or
constitute a default under any law or the charter or by-laws of such
Selling Stockholder or the terms of any indenture or other agreement or
instrument to which such Selling Stockholder or any of its subsidiaries is
a party or bound, or any judgment, order or decree applicable to such
Selling Stockholder or any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Stockholder or any of its subsidiaries.
10
(f) Such Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in this Section 1
are not true and correct, is familiar with the Registration Statement and
has no knowledge of any material fact, condition or information not
disclosed in the Prospectuses or any supplement thereto which has adversely
affected or may adversely affect the business of the Company or any of its
subsidiaries; and the sale of Securities by such Selling Stockholder
pursuant hereto is not prompted by any information concerning the Company
or any of its subsidiaries which is not set forth in the Prospectuses or
any supplement thereto.
(g) In respect of any statements in or omissions from the
Registration Statement or the Prospectuses or any supplements thereto made
in reliance upon and in conformity with information furnished in writing to
the Company by any Selling Stockholder specifically for use in connection
with the preparation thereof, such Selling Stockholder hereby makes the
same representations and warranties to each U.S. Underwriter as the Company
makes to such U.S. Underwriter under paragraph (i)(b) of this Section.
Any certificate signed by any officer of any Selling Stockholder and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by such Selling Stockholder, as to matters covered thereby, to each
U.S. Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties set forth in this U.S.
Underwriting Agreement, the Company and the Selling Stockholders agree,
severally and not jointly, to sell to each U.S. Underwriter, and each U.S.
Underwriter agrees, severally and not jointly, to purchase from the Company and
the Selling Stockholders, at a purchase price of $ . per share, the amount of
the U.S. Underwritten Securities set forth opposite such U.S. Underwriter's name
in Schedule I to this U.S. Underwriting Agreement.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties set forth in this U.S. Underwriting Agreement,
the Company hereby grants an option to the several U.S. Underwriters to purchase
up to 3,712,000 U.S. Option Securities at the same purchase price per share as
the U.S. Underwriters shall pay for the U.S. Underwritten Securities. Said
option may be exercised only to cover over-allotments in the sale of the U.S.
Underwritten Securities by the U.S. Underwriters. Said option may be exercised
in whole or in part at any time (but not more than once) on or before the 30th
day after the date of the U.S. Prospectus upon written or telegraphic notice by
the U.S. Representatives to the Company setting forth the number of shares of
the U.S. Option Securities as to which the several U.S. Underwriters are
exercising the option and the settlement date. The number of U.S. Option
Securities to be purchased by each U.S. Underwriter shall be the same percentage
of the total number of shares of the U.S. Option Securities to be purchased by
the several U.S. Underwriters as such U.S. Underwriter is purchasing of the U.S.
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the U.S.
Underwritten Securities and the U.S. Option Securities (if the option provided
for in Section 2(b) hereof shall have been exercised on or before the third
Business Day prior to the Closing Date) shall be made
11
at 10:00 AM, New York City time, on . , 1999, or at such time on such later date
not more than three Business Days after the foregoing date as the U.S.
Representatives and the International Representatives shall designate, which
date and time may be postponed by agreement among the U.S. Representatives, the
International Representatives, the Selling Stockholders and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
U.S. Securities being called in this U.S. Underwriting Agreement the "Closing
Date"). Delivery of the U.S. Securities shall be made to the U.S.
Representatives for the respective accounts of the several U.S. Underwriters
against payment by the several U.S. Underwriters through the U.S.
Representatives of the respective aggregate purchase prices of the U.S.
Securities being sold by the Company and each of the Selling Stockholders to or
upon the order of the Company and the Selling Stockholders by wire transfer
payable in same-day funds to the accounts specified by the Company and the
Selling Stockholders. Delivery of the U.S. Underwritten Securities and the U.S.
Option Securities shall be made through the facilities of The Depository Trust
Company unless the U.S. Representatives shall otherwise instruct.
Each Selling Stockholder will pay all applicable state transfer taxes,
if any, involved in the transfer to the several U.S. Underwriters of the U.S.
Securities to be purchased by them from such Selling Stockholder and the
respective U.S. Underwriters will pay any additional stock transfer taxes
involved in further transfers.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
U.S. Option Securities (at the expense of the Company) to the U.S.
Representatives, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date
specified by the U.S. Representatives (which shall be within three Business Days
after exercise of said option) for the respective accounts of the several U.S.
Underwriters, against payment by the several U.S. Underwriters through the U.S.
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to the accounts specified by
the Company. If settlement for the U.S. Option Securities occurs after the
Closing Date, the Company will deliver to the U.S. Representatives on the
settlement date for the U.S. Option Securities, and the obligation of the U.S.
Underwriters to purchase the U.S. Option Securities shall be conditioned upon
receipt of, supplemental opinions, certificates and letters confirming as of
such date the opinions, certificates and letters delivered on the Closing Date
pursuant to Section 6 hereof.
It is understood and agreed that the Closing Date shall occur
simultaneously with the "Closing Date" under the International Underwriting
Agreement, and that the settlement date, if any, shall occur simultaneously with
the "settlement date" under the International Underwriting Agreement.
4. Offering by Underwriters. It is understood that the several U.S.
Underwriters propose to offer the U.S. Securities for sale to the public as set
forth in the U.S. Prospectus.
5. Agreements.
(i) The Company agrees with the several U.S. Underwriters that:
12
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statement or supplement to the Prospectuses or any Rule 462(b) Registration
Statement unless the Company has furnished you a copy for your review prior
to filing and will not file any such proposed amendment or supplement to
which you reasonably object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectuses is otherwise required under Rule
424(b), the Company will cause the Prospectuses, properly completed, and
any supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the U.S. Representatives of such
timely filing. The Company will promptly advise the U.S. Representatives
(1) when the Registration Statement, if not effective at the Execution
Time, shall have become effective, (2) when the Prospectuses, and any
supplement thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement
shall have been filed with the Commission, (3) when, prior to termination
of the offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (4) of any request by
the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any supplement
to the Prospectuses or for any additional information, (5) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding
for that purpose and (6) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the institution or threatening of any
proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which either of the Prospectuses as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to
amend the Registration Statement or supplement either of the Prospectuses
to comply with the Act or the rules thereunder, the Company promptly will
(1) notify the U.S. Representatives of any such event; (2) prepare and file
with the Commission, subject to the second sentence of paragraph (i)(a) of
this Section 5, an amendment or supplement which will correct such
statement or omission or effect such compliance; and (3) supply any
supplemented Prospectuses to you in such quantities as you may reasonably
request.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the U.S. Representatives an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
13
(d) The Company will furnish to the U.S. Representatives and counsel
for the U.S. Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and to each other U.S.
Underwriter a copy of the Registration Statement (without exhibits thereto)
and, so long as delivery of a prospectus by a U.S. Underwriter or dealer
may be required by the Act, as many copies of each U.S. Preliminary
Prospectus and the U.S. Prospectus and any supplement thereto as the U.S.
Representatives may reasonably request.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the U.S.
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the U.S. Securities;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take
any action that would subject it to service of process in suits, other than
those arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
Xxxxxxx Xxxxx Xxxxxx Inc. and Xxxxxxx Xxxxx & Company, L.L.C., offer, sell,
contract to sell, pledge, or otherwise dispose of, (or enter into any
transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Company or
any affiliate of the Company or any person in privity with the Company or
any affiliate of the Company) directly or indirectly, including the filing
(or participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any other shares of Common Stock
or any securities convertible into, or exercisable, or exchangeable for,
shares of Common Stock, or publicly announce an intention to effect any
such transaction, for a period of 90 days after the date of the
Underwriting Agreement; provided, however, that the Company may issue and
sell Common Stock (i) in connection with acquisition transactions (ii)
pursuant to any employee stock option plan, stock ownership plan or
dividend reinvestment plan of the Company in effect at the Execution Time,
or (iii) issuable upon the conversion of securities or the exercise of
warrants outstanding at the Execution Time.
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(h) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction and filing
with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each Preliminary Prospectus, each
Prospectus, and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
Registration Statement, each Preliminary Prospectus, each Prospectus, and
all amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in
14
connection with the offering and sale of the Securities; (iii) the
preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes in
connection with the original issuance and sale of the Securities; (iv) the
printing (or reproduction) and delivery of this U.S. Underwriting Agreement
and the International Underwriting Agreement, any blue sky memorandum and
all other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Securities; (v) the registration of the
Securities under the Exchange Act and the listing of the Securities on the
Nasdaq National Market; (vi) any registration or qualification of the
Securities for offer and sale under the securities or blue sky laws of the
several states (including filing fees and the reasonable fees and expenses
of counsel for the Underwriters relating to such registration and
qualification); (vii) any filings required to be made with the National
Association of Securities Dealers, Inc. (including filing fees and the
reasonable fees and expenses of counsel for the Underwriters relating to
such filings); (viii) the transportation and other expenses incurred by or
on behalf of Company representatives in connection with presentations to
prospective purchasers of the Securities; (ix) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local
and special counsel) for the Company; and (x) all other costs and expenses
incident to the performance by the Company and the Selling Stockholders of
their obligations under the Underwriting Agreements.
(ii) Each U.S. Underwriter agrees that (i) it is not purchasing any
of the U.S. Securities for the account of anyone other than a United States or
Canadian Person, (ii) it has not offered or sold, and will not offer or sell,
directly or indirectly, any of the U.S. Securities or distribute any U.S.
Prospectus to any person outside the United States or Canada, or to anyone other
than a United States or Canadian Person, and (iii) any dealer to whom it may
sell any of the U.S. Securities will represent that it is not purchasing for the
account of anyone other than a United States or Canadian Person and agree that
it will not offer or resell, directly or indirectly, any of the U.S. Securities
outside the United States or Canada, or to anyone other than a United States or
Canadian Person or to any other dealer who does not so represent and agree;
provided, however, that the foregoing shall not restrict (A) purchases and sales
between the International Underwriters on the one hand and the U.S. Underwriters
on the other hand pursuant to the Agreement Between U.S. Underwriters and
International Underwriters, (B) stabilization transactions contemplated under
the Agreement Between U.S. Underwriters and International Underwriters,
conducted through Xxxxxxx Xxxxx Xxxxxx Inc. (or through the U.S. Representatives
and International Representatives) as part of the distribution of the
Securities, and (C) sales to or through (or distributions of U.S. Prospectuses
or U.S. Preliminary Prospectuses to) United States or Canadian Persons who are
investment advisors, or who otherwise exercise investment discretion, and who
are purchasing for the account of anyone other than a United States or Canadian
Person.
(iii) The agreements of the U.S. Underwriters set forth in paragraph
(ii) of this Section 5 shall terminate upon the earlier of the following events:
(a) a mutual agreement of the U.S. Representatives and the
International Representatives to terminate the selling restrictions set
forth in paragraph (ii) of this Section 5 and in Section 5(ii) of the
International Underwriting Agreement; or
15
(b) the expiration of a period of 30 days after the Closing Date,
unless (A) the U.S. Representatives shall have given notice to the Company
and the International Representatives that the distribution of the U.S.
Securities by the U.S. Underwriters has not yet been completed, or (B) the
International Representatives shall have given notice to the Company and
the U.S. Representatives that the distribution of the International
Securities by the International Underwriters has not yet been completed. If
such notice by the U.S. Representatives or the International
Representatives is given, the agreements set forth in such paragraph (ii)
shall survive until the earlier of (1) the event referred to in clause (a)
of this subsection (iii) or (2) the expiration of an additional period of
30 days from the date of any such notice.
(iv) Each Selling Stockholder agrees with the several Underwriters
that:
(a) Such Selling Stockholder will not, without the prior written
consent of Xxxxxxx Xxxxx Barney Inc. and Xxxxxxx Xxxxx & Company, L.L.C.,
offer, sell, contract to sell, pledge or otherwise dispose of, (or enter
into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Company or
any affiliate of the Company or any person in privity with the Company or
any affiliate of the Company) directly or indirectly, or file (or
participate in the filing of) a registration statement with the Commission
in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act with respect to, any shares of capital stock
of the Company or any securities convertible into or exercisable or
exchangeable for such capital stock, or publicly announce an intention to
effect any such transaction, for a period of 90 days after the date of this
U.S. Underwriting Agreement, other than shares of Common Stock disposed of
as bona fide gifts approved by Xxxxxxx Xxxxx Barney Inc. and Xxxxxxx Xxxxx
& Company, L.L.C.
(b) Such Selling Stockholder will not take any action designed to or
which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(c) Such Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as delivery
of a prospectus relating to the Securities by an underwriter or dealer may
be required under the Act, of (i) any material change in the Company's
condition (financial or otherwise), prospects, earnings, business or
properties, (ii) any change in information in the Registration Statement or
the Prospectuses relating to such Selling Stockholder or (iii) any new
material information relating to the Company or relating to any matter
stated in the Prospectuses which come to the attention of such Selling
Stockholder.
(d) Such Selling Stockholder agrees to pay the fees and expenses of
counsel (including local and special counsel) for such Selling Stockholder.
16
6. Conditions to the Obligations of the U.S. Underwriters. The
obligations of the U.S. Underwriters to purchase the U.S. Underwritten
Securities and the U.S. Option Securities, as the case may be, shall be subject
to the accuracy of the representations and warranties on the part of the Company
and the Selling Stockholders contained in this U.S. Underwriting Agreement as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company and the Selling
Stockholders made in any certificates pursuant to the provisions hereof, to the
performance by the Company and the Selling Stockholders of their respective
obligations under this U.S. Underwriting Agreement and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the U.S. Representatives and the International
Representatives agree in writing to a later time, the Registration Statement
will become effective not later than (i) 6:00 PM New York City time on the date
of determination of the public offering price, if such determination occurred at
or prior to 3:00 PM New York City time on such date or (ii) 9:30 AM on the
Business Day following the day on which the public offering price was
determined, if such determination occurred after 3:00 PM New York City time on
such date; if filing of either of the Prospectuses, or any supplement thereto,
is required pursuant to Rule 424(b), the Prospectuses, and any such supplement,
will be filed in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have requested and caused Sidley & Austin,
counsel for the Company, to have furnished to the Representatives their opinion,
dated the Closing Date and addressed to the Representatives, to the effect that:
(i) each of the Company and EFS National Bank, EFS Federal Savings
Bank, Concord Computing Corporation, Concord Retail Services, Inc., Concord
Equipment Sales, Pay Systems of America, Inc., Digital Merchants Systems of
Illinois, Inc., American Bankcard, International, Inc. and Electronic
Payment Services, Inc. (individually a "Subsidiary" and collectively the
"Subsidiaries") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction in which it
is chartered or organized, with full corporate power and authority to own
or lease, as the case may be, and to operate its properties and conduct its
business as described in the Prospectuses, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification, and the Company is
duly registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended;
(ii) all the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectuses, all
outstanding shares of capital stock of the Subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries free and clear
of any perfected security interest and, to the knowledge of such counsel,
after due inquiry, any other security interest, claim, lien or encumbrance;
17
(iii) the Company's authorized equity capitalization is as set forth
in the Prospectuses; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Prospectuses;
the outstanding shares of Common Stock (including the Securities being sold
under the Underwriting Agreements by the Selling Stockholders) have been
duly and validly authorized and issued and are fully paid and
nonassessable; the Securities being sold under the Underwriting Agreements
by the Company have been duly and validly authorized, and, when issued and
delivered to and paid for by the U.S. Underwriters pursuant to this U.S.
Underwriting Agreement and by the International Underwriters pursuant to
the International Underwriting Agreement, will be fully paid and
nonassessable; the Securities being sold by the Selling Stockholders are
duly quoted, and admitted and authorized for trading on the Nasdaq National
Market and the Securities being sold hereunder by the Company are duly
quoted, and admitted and authorized for trading, subject to official notice
of issuance, on the Nasdaq National Market; the certificates for the
Securities are in valid and sufficient form; the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive or
other rights to subscribe for the Securities; and, except as set forth in
the Prospectuses, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital stock of
or ownership interests in the Company are outstanding;
(iv) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property of a character
required to be disclosed in the Registration Statement which is not
adequately disclosed in the Prospectuses, and there is no franchise,
contract or other document of a character required to be described in the
Registration Statement or Prospectuses, or to be filed as an exhibit
thereto, which is not described or filed as required; the descriptions
contained in the Prospectuses under the heading "United States Federal Tax
Consequences to Non-United States Holders" constitute fair summaries of
those statutes and regulations discussed therein applicable to the offering
of the Securities; and the statements in the Prospectuses under the heading
"Business Supervision and Regulation" fairly summarize the matters therein
described;
(v) the Registration Statement has become effective under the Act; any
required filing of the Prospectuses, and any supplements thereto, pursuant
to Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b); to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued,
no proceedings for that purpose have been instituted or threatened and the
Registration Statement and each of the Prospectuses (other than the
financial statements and other financial information contained therein, as
to which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act and the
Exchange Act and the respective rules thereunder; and such counsel has no
reason to believe that on the Effective Date or at the Execution Time the
Registration Statement contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectuses as of the date thereof and on the Closing Date included or
include any untrue statement of a
18
material fact or omitted or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading (in each case, other than the financial
statements and other financial information contained therein, as to which
such counsel need express no opinion);
(vi) the Underwriting Agreements have been duly authorized, executed
and delivered by the Company;
(vii) the Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectuses, will not be, an "investment company" as
defined in the Investment Company Act of 1940, as amended;
(viii) no consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with the
transactions contemplated in the Underwriting Agreements, except such as
have been obtained under the Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated in and the Underwriting Agreements and in the Prospectuses and
such other approvals (specified in such opinion) as have been obtained;
(ix) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions contemplated in the
Underwriting Agreements nor the fulfillment of the terms of the
Underwriting Agreements will conflict with, result in a breach or violation
of or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or its subsidiaries pursuant to, (i) the charter or
by-laws of the Company or its subsidiaries, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
to which the Company or its subsidiaries is a party or bound or to which
its or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or its
subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
the Company or its subsidiaries or any of its or their properties; and
(x) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement except for
such rights of the Selling Stockholders.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Illinois or the
Federal laws of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Underwriters
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials. Reference to the
Prospectuses in this paragraph (b) include any supplements thereto at the
Closing Date.
19
(c) The Selling Stockholders shall have requested and caused
___________, counsel for the Selling Stockholders, to have furnished to the
Representatives their opinion dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) the Underwriting Agreements, and the Custody Agreement and Power-
of-Attorney have been duly authorized, executed and delivered by the
Selling Stockholders, the Custody Agreement is valid and binding on the
Selling Stockholders and each Selling Stockholder has full legal right and
authority to sell, transfer and deliver in the manner provided in the
Underwriting Agreements and the Custody Agreement the Securities being sold
by such Selling Stockholder under the Underwriting Agreements;
(ii) the delivery by each Selling Stockholder to the several
Underwriters of certificates for the Securities being sold under the
Underwriting Agreements by such Selling Stockholder against payment
therefor as provided in the Underwriting Agreements, will pass good and
marketable title to such Securities to the several Underwriters, free and
clear of all liens, encumbrances, equities and claims whatsoever;
(iii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by any Selling
Stockholder of the transactions contemplated in the Underwriting
Agreements, except such as may have been obtained under the Act and such as
may be required under the blue sky laws of any jurisdiction and the
securities laws of any jurisdiction outside the United States in connection
with the purchase and distribution of the Securities by the Underwriters
and such other approvals (specified in such opinion) as have been obtained;
and
(iv) neither the sale of the Securities being sold by any Selling
Stockholder nor the consummation of any other of the transactions
contemplated in the Underwriting Agreements by any Selling Stockholder or
the fulfillment of the terms hereof by any Selling Stockholder will
conflict with, result in a breach or violation of, or constitute a default
under any law or the charter or By-laws of the Selling Stockholder or the
terms of any indenture or other agreement or instrument known to such
counsel and to which any Selling Stockholder or any of its subsidiaries is
a party or bound, or any judgment, order or decree known to such counsel to
be applicable to any Selling Stockholder or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over any Selling Stockholder or any of its
subsidiaries.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of ______________
or the Federal laws of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
U.S. Underwriters and the International Underwriters, and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Selling Stockholders and public officials.
(d) The Representatives shall have received from Cleary, Gottlieb,
Xxxxx & Xxxxxxxx, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with respect
to the issuance and sale of the Securities, the
20
Registration Statement, the Prospectuses (together with any supplement thereto)
and other related matters as the Representatives may reasonably require, and the
Company and each Selling Stockholder shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectuses, any supplements to the
Prospectuses and the Underwriting Agreements and that:
(i) the representations and warranties of the Company in the
Underwriting Agreements are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the Closing
Date and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements included
in the Prospectuses (exclusive of any supplement thereto), there has been
no material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Prospectuses (exclusive of any supplement thereto).
(f) Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of such Selling
Stockholder, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectuses, any supplement to either of the Prospectuses and this U.S.
Underwriting Agreement and the International Underwriting Agreement and that the
representations and warranties of such Selling Stockholder in this U.S.
Underwriting Agreement and the International Underwriting Agreement are true and
correct in all material respects on and as of the Closing Date to the same
effect as if made on the Closing Date.
(g) The Company shall have requested and caused Ernst & Young LLP
to have furnished to the Representatives letters, dated respectively as of the
Execution Time and as of the Closing Date, in form and substance satisfactory to
the Representatives, confirming that they are independent accountants within the
meaning of the Act and the applicable rules and regulations adopted by the
Commission thereunder and that they have performed a review of the unaudited
interim financial information of the Company for the three-month period ended
March 31, 1999 and as at March 31, 1999, in accordance with Statement on
Auditing Standards No. 71, and stating in effect that:
21
(i) in their opinion the audited financial statements and financial
statement schedules included and incorporated by reference in the
Registration Statement and the Prospectuses and reported on by them comply
as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; their
limited review, in accordance with standards established under Statement on
Auditing Standards No. 71, of the unaudited interim financial information
for the three-month period ended March 31, 1999, and as at March 31, 1999
[, as indicated in their report dated _______________, 1999
included/incorporated by reference in the Registration Statement and the
Prospectuses]; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the meetings
of the stockholders, directors, board of directors' audit committee and
compensation committee of the Company and the Subsidiaries; and inquiries
of certain officials of the Company who have responsibility for financial
and accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to December 31, 1998, nothing came to
their attention which caused them to believe that:
(1) any unaudited financial statements included or incorporated
by reference in the Registration Statement and the Prospectuses do not
comply as to form in all material respects with applicable accounting
requirements of the Act and with the related rules and regulations
adopted by the Commission with respect to financial statements
included or incorporated by reference in quarterly reports on Form
10-Q under the Exchange Act; and said unaudited financial statements
are not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
financial statements included or incorporated by reference in the
Registration Statement and the Prospectuses;
(2) with respect to the period subsequent to March 31, 1999,
there were any changes, at a specified date not more than five days
prior to the date of the letter, in the long-term debt of the Company
and its subsidiaries or capital stock of the Company or decreases in
the stockholders' equity of the Company or decreases in working
capital of the Company and its subsidiaries as compared with the
amounts shown on the March 31, 1999 consolidated balance sheet
included or incorporated by reference in the Registration Statement
and the Prospectuses, or for the period from April 1, 1999 to such
specified date there were any decreases, as compared with the
corresponding period in the preceding quarter, in revenue, operating
income or income before taxes or in total or per share amounts of net
income of the Company and its subsidiaries except in all instances for
changes or decreases set forth in such letter, in which case the
letter shall be accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed necessary
by the Representatives;
22
(3) the information included or incorporated by reference in the
Registration Statement and Prospectuses in response to Regulation S-K,
Item 301 (Selected Financial Data), Item 302 (Supplementary Financial
Information) and Item 402 (Executive Compensation) is not in
conformity with the applicable disclosure requirements of Regulation
S-K; and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
the Company and its subsidiaries) set forth in the Registration Statement
and the Prospectuses, including the information set forth under the
captions "Capitalization", "Selected Consolidated Financial Data",
"Management's Discussion and Analysis of Financial Condition and Results of
Operation" and "Business" in the Prospectuses, the information included or
incorporated by reference in Items 1, 2, 6, 7 and 11 of the Company's
Annual Report on Form 10-K, incorporated by reference in the Registration
Statement and the Prospectuses, and the information included in the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in the Company's Quarterly Report on Form 10-Q,
incorporated by reference in the Registration Statement and the
Prospectuses, agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Prospectuses in this paragraph (g) include any supplement
thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectuses (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (g) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the condition
(financial or otherwise), earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the
Prospectuses (exclusive of any supplement thereto) the effect of which, in any
case referred to in clause (i) or (ii) above, is, in the sole judgment of the
U.S. Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the U.S. Securities as
contemplated by the Registration Statement (exclusive of any amendment thereof)
and the Prospectuses (exclusive of any supplement thereto).
(i) The closing of the purchase of the U.S. Underwritten Securities
to be issued and sold by the Company and the Selling Stockholders pursuant to
the U.S. Underwriting Agreement shall occur concurrently with the closing of the
International Underwritten Securities to be issued and sold by the Company and
the Selling Stockholders pursuant to the International Underwriting Agreement.
23
(j) Prior to the Closing Date, the Company and the Selling
Stockholders shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may reasonably
request.
(k) The Securities shall have been listed and admitted and
authorized for trading on the Nasdaq National Market, and satisfactory evidence
of such actions shall have been provided to the Representatives.
(l) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto (and in
the case of Xxxxxxx X. Xxxxxx and Xxxx Xxx Xxxxxxxx, substantially in the form
of Exhibit B hereto) from each executive officer and director of the Company,
which persons are listed on Schedule III hereto, KeyCorp and Xxx Xxxxxxxxxx, all
addressed to the Representatives.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this U.S.
Underwriting Agreement and the International Underwriting Agreement, or if any
of the opinions and certificates mentioned above or elsewhere in this U.S.
Underwriting Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the U.S. Representatives and counsel for
the Underwriters, this U.S. Underwriting Agreement and all obligations of the
U.S. Underwriters under this U.S. Underwriting Agreement may be canceled at, or
at any time prior to, the Closing Date by the U.S. Representatives. Notice of
such cancellation shall be given to the Company and each Selling Stockholder in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel for the
Underwriters, at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing
Date.
7. Reimbursement of U.S. Underwriters' Expenses. If the sale of
the U.S. Securities provided for in this U.S. Underwriting Agreement is not
consummated because any condition to the obligations of the U.S. Underwriters
set forth in Section 6 hereof is not satisfied, because of any termination
pursuant to Section 10 hereof or because of any refusal, inability or failure on
the part of the Company or any Selling Stockholders to perform any agreement in
this U.S. Underwriting Agreement or comply with any provision hereof other than
by reason of a default by any of the U.S. Underwriters, the Company will
reimburse the U.S. Underwriters severally through Xxxxxxx Xxxxx Barney Inc. on
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities. If the Company is
required to make any payments to the Underwriters under this Section 7 because
of any Selling Stockholder's refusal, inability or failure to satisfy any
condition to the obligations of the Underwriters set forth in Section 6, the
Selling Stockholders pro rata in proportion to the percentage of Securities to
be sold by each shall reimburse the Company on demand for all amounts so paid.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each U.S. Underwriter, the directors, officers,
employees and agents of each U.S. Underwriter and each person who controls any
U.S. Underwriter within the meaning of either the
24
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the registration statement for the registration of the Securities as originally
filed or in any amendment thereof, or in any U.S. or International Preliminary
Prospectus or in either of the Prospectuses, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any U.S. Underwriter through the U.S.
Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) Each Selling Stockholder severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, each U.S. Underwriter, the directors, officers,
employees and agents of each U.S. Underwriter and each person who controls the
Company or any U.S. Underwriter within the meaning of either the Act or the
Exchange Act and each other Selling Stockholder, if any, to the same extent as
the foregoing indemnity from the Company to each U.S. Underwriter, but only with
reference to written information furnished to the Company by or on behalf of
such Selling Stockholder specifically for inclusion in the documents referred to
in the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Selling Stockholder may otherwise have.
(c) Each U.S. Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act and each Selling Stockholder, to
the same extent as the foregoing indemnity to each U.S. Underwriter, but only
with reference to written information relating to such U.S. Underwriter
furnished to the Company by or on behalf of such U.S. Underwriter through the
U.S. Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any U.S. Underwriter may otherwise have. The Company and each
Selling Stockholder acknowledge that the statements set forth in the last
paragraph of the cover page regarding delivery of the Securities and, under the
heading "Underwriting", (i) the sentences related to concessions and
reallowances and (ii) the paragraph related to stabilization, syndicate covering
transactions and penalty bids in any U.S. or International Preliminary
Prospectuses and the Prospectuses constitute the only information furnished in
writing by or on behalf of the several U.S. Underwriters for inclusion in any
U.S. or International Preliminary Prospectus or the Prospectuses.
25
(d) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a), (b) or (c)
above unless and to the extent it did not otherwise learn of such action
and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a), (b) or (c)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below); provided,
however, that such counsel shall be satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
the institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a), (b) or
(c) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Selling Stockholders and
the U.S. Underwriters agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses") to which the Company, one or more of the Selling Stockholders and
one or more of the U.S. Underwriters may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company, by
the Selling Stockholders and by the U.S. Underwriters from the offering of
the U.S. Securities; provided, however, that in no case shall any U.S.
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the U.S. Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to
the Securities purchased by such U.S. Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable
for any reason, the Company, the Selling Stockholders and the U.S.
Underwriters shall contribute in such proportion as is appropriate to
26
reflect not only such relative benefits but also the relative fault of the
Company, of the Selling Stockholders and of the U.S. Underwriters in connection
with the statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations. Benefits received by the Company and by
the Selling Stockholders shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses) received by each of them, and
benefits received by the U.S. Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the
cover page of the U.S. Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company, the Selling
Stockholders on the one hand or the U.S. Underwriters on the other, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
Company, the Selling Stockholders and the U.S. Underwriters agree that it would
not be just and equitable if contribution were determined by pro rata allocation
or any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (e), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls a U.S. Underwriter within the meaning
of either the Act or the Exchange Act and each director, officer, employee and
agent of a U.S. Underwriter shall have the same rights to contribution as such
U.S. Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (e).
9. Default by a U.S. Underwriter. If any one or more U.S. Underwriters
shall fail to purchase and pay for any of the U.S. Securities agreed to be
purchased by such U.S. Underwriter or U.S. Underwriters under this U.S.
Underwriting Agreement and such failure to purchase shall constitute a default
in the performance of its or their obligations under this U.S. Underwriting
Agreement, the remaining U.S. Underwriters shall be obligated severally to take
up and pay for (in the respective proportions which the amount of U.S.
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate amount of U.S. Securities set forth opposite the names of all the
remaining U.S. Underwriters) the U.S. Securities which the defaulting U.S.
Underwriter or U.S. Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of U.S. Securities which
the defaulting U.S. Underwriter or U.S. Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of U.S. Securities set forth
in Schedule I hereto, the remaining U.S. Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the U.S.
Securities, and if such nondefaulting U.S. Underwriters do not purchase all the
U.S. Securities, this U.S. Underwriting Agreement will terminate without
liability to any nondefaulting U.S. Underwriter, the Selling Stockholders or the
Company. In the event of a default by any U.S. Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the U.S. Representatives shall determine in order that
the required changes in the Registration Statement and the Prospectuses or in
any other documents or arrangements may be effected. Nothing contained in this
U.S. Underwriting Agreement shall relieve any defaulting U.S. Underwriter of its
liability, if any, to
27
the Company, the Selling Stockholders and any nondefaulting U.S. Underwriter for
damages occasioned by its default under this U.S. Underwriting Agreement.
10. Termination. This U.S. Underwriting Agreement shall be subject to
termination in the absolute discretion of the U.S. Representatives, by notice
given to the Company prior to delivery of and payment for the U.S. Securities,
if at any time prior to such time (i) trading in the Company's Common Stock
shall have been suspended by the Commission or the Nasdaq National Market or
trading in securities generally on the New York Stock Exchange or the Nasdaq
National Market shall have been suspended or limited or minimum prices shall
have been established on such Exchange or the Nasdaq National Market, (ii) a
banking moratorium shall have been declared either by federal or new york state
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the united states of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the U.S. Representatives, impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the U.S. Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Stockholder and of the U.S.
Underwriters set forth in or made pursuant to this U.S. Underwriting Agreement
will remain in full force and effect, regardless of any investigation made by or
on behalf of any U.S. Underwriter, any Selling Stockholder or the Company or any
of the officers, directors, employees, agents or controlling persons referred to
in section 8 hereof, and will survive delivery of and payment for the U.S.
Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this U.S. Underwriting Agreement.
12. Notices. All communications under this U.S. Underwriting Agreement
will be in writing and effective only on receipt, and, if sent to the U.S.
Representatives, will be mailed, delivered or telefaxed to the Xxxxxxx Xxxxx
Xxxxxx Inc. General Counsel (fax no.:(000) 000-0000) and confirmed to such
General Counsel at Xxxxxxx Xxxxx Barney Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, Attention: General Counsel; or, if sent to the Company, will be
mailed, delivered or telefaxed to [facsimile number] and confirmed to it at
, attention of _________; or if sent to any Selling Stockholder,
will be mailed, delivered or telefaxed and confirmed to it at the address set
forth in Schedule II hereto.
13. Successors. This U.S. Underwriting Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and the officers, directors, employees, agents and controlling
persons referred to in Section 8 hereof, and no other person will have any right
or obligation under this U.S. Underwriting Agreement.
14. Applicable Law. This U.S. Underwriting Agreement will be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed within the State of New York.
15. Counterparts. This U.S. Underwriting Agreement may be signed in
one or more counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same agreement.
28
16. Headings. The Section headings used in this U.S. Underwriting
Agreement are for convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this U.S.
Underwiting Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this U.S.
Underwriting Agreement is executed and delivered by the parties hereto.
"International Preliminary Prospectus" shall have the meaning set
forth under "U.S. Preliminary Prospectus."
"International Prospectus" shall mean such form of prospectus relating
to the International Securities as first filed pursuant to Rule 424(b)
after the Execution Time or, if no filing pursuant to Rule 424(b) is made,
such form of prospectus included in the Registration Statement at the
Effective Date.
"International Representatives" shall mean the addressees of the
International Underwriting Agreement.
"International Securities" shall mean the International Underwritten
Securities and the International Option Securities.
"International Underwriters" shall mean the several underwriters named
in Schedule I to the International Underwriting Agreement.
"International Underwriting Agreement" shall mean the International
Underwriting Agreement dated the date hereof related to the sale of the
International Securities by the Company and the Selling Stockholders to the
International Underwriters.
29
"Option Securities" shall mean the U.S. Option Securities and the
International Option Securities.
"Preliminary Prospectus" shall have the meaning set forth under "U.S.
Preliminary Prospectus.""Prospectuses" and "each Prospectus" shall mean the
U.S. Prospectus and the International Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(i)(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein in the Effective Date as provided
by Rule 430A.
"Representatives" shall mean the U.S. Representatives and the
International Representatives.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(a)(i) hereof.
"Securities" shall mean the U.S. Securities and the International
Securities.
"Selling Stockholders" shall mean the persons named on Schedule II to
the U.S. Underwriting Agreement and the International Underwriting
Agreement.
"Underwriter" and "Underwriters" shall mean the U.S. Underwriters and
the International Underwriters.
"Underwriting Agreements" still mean the U.S. Underwriting Agreement
and the International Underwriting Agreement.
"Underwritten Securities" shall mean the International Underwritten
Securities and the U.S. Underwritten Securities.
"U.S. Preliminary Prospectus" and the "International Preliminary
Prospectus", respectively, shall mean any preliminary prospectus with
respect to the offering of the U.S. Securities and the International
Securities, as the case may be, referred to in paragraph 1(i)(a) above and
any preliminary prospectus with respect to the offering of the U.S.
Securities and the International Securities, as the case may be, included
in the Registration Statement at the Effective Date that omits Rule 430A
Information; and the U.S. Preliminary Prospectus and the International
Preliminary Prospectus are hereinafter collectively called the "Preliminary
Prospectuses".
30
"U.S. Prospectus" shall mean the prospectus relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time or, if no filing
pursuant to Rule 424(b) is required, shall mean the form of final prospectus
relating to the Securities included in the Registration Statement at the
Effective Date.
"U.S. Representatives" shall mean the addressees of the U.S. Underwriting
Agreement.
"U.S. Securities" shall mean the U.S. Underwritten Securities and the U.S.
Option Securities.
"U.S. Underwriting Agreement" shall mean this agreement relating to the
sale of the U.S. Securities by the Company and the Selling Stockholders to the
U.S. Underwriters.
"U.S. Underwriters" shall mean the several underwriters named in Schedule I
to the U.S. Underwriting Agreement.
"United States or Canadian Person" shall mean any person who is a national
or resident of the United States or Canada, any corporation, partnership, or
other entity created or organized in or under the laws of the United States or
Canada or of any political subdivision thereof, or any estate or trust the
income of which is subject to United States or Canadian Federal income taxation,
regardless of its source (other than any non-United States or non-Canadian
branch of any United States or Canadian Person), and shall include any United
States or Canadian branch of a person other than a United States or Canadian
Person.
"U.S." or "United States" shall mean the United States of America
(including the states thereof and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction.
31
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company, the Selling Stockholders, and the several U.S. Underwriters.
Very truly yours,
Concord EFS, Inc.
By:
------------------------------------
Name:
Title:
Bank One Corporation
By:
------------------------------------
Name:
Title:
Corestates Holdings, Inc.
By:
------------------------------------
Name:
Title:
KeyCorp.
By:
------------------------------------
Name:
Title:
National City Corporation
By:
------------------------------------
Name:
Title:
PNC Network Holdings Corp.
By:
------------------------------------
Name:
Title:
32
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
By: Xxxxxxx Xxxxx Xxxxxx Inc.
By:
---------------------------------------
Name:
Title:
By: Xxxxxxx Xxxxx & Company, L.L.C.
By:
---------------------------------------
Name:
Title:
By: Xxxxxxx, Xxxxx & Co.
By:
---------------------------------------
For themselves and the other several U.S. Underwriters named in Schedule I to
the foregoing Agreement.
33
SCHEDULE I
Number of Underwritten
Securities to be
Underwriters Purchased
------------ ----------------------
Xxxxxxx Xxxxx Barney Inc..................
Xxxxxxx Xxxxx & Company, L.L.C............
Xxxxxxx, Sachs & Co.......................
X.X. Xxxxxx Securities Inc................
Xxxxxx Xxxxxx & Company, Inc..............
[Additional Underwriters]
-------------------
Total...........................
===================
34
SCHEDULE II
-----------
Number of Underwritten Securities
---------------------------------
Selling Stockholders: to be Sold
--------------------- ----------
Bank One Corporation
[address, fax no.]
Corestates Holdings, Inc.
[address, fax no.]
KeyCorp.
[address, fax no.]
National City Corporation
[address, fax no.]
PNC Network Holdings Corp.
[address, fax no.]
----------
Total.....................
==========
35
SCHEDULE III
------------
List of Executive Officers and Directors
----------------------------------------
Xxx X. Xxxxxx
Xxxxxx X. Xxxxx
Xxxxxx Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxx Xxx Xxxxxxxx
Xxxxx Xxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx
J. Xxxxxxx Xxxxxxxxxx
Xxxx Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxx
36
CGSH draft: 5/14/99
[Form of Lock-Up Agreement] EXHIBIT A
[Letterhead of officer, director or major stockholder of]
Concord EFS, Inc.
Concord EFS, Inc.
Public Offering of Common Stock
-------------------------------
, 1999
Salomon Brothers International Limited
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxx, Sachs & Co.
Xxxxxxx Xxxxx International
X.X. Xxxxxx Securities Ltd.
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxx & Company, Inc.
As Representatives of the several U.S. Underwriters
and International Underwriters,
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
U.S. Underwriting Agreement and International Underwriting Agreement (the
"Underwriting Agreements"), among Concord EFS, Inc., a Delaware corporation (the
"Company"), each of the Selling Stockholders named therein and each of you as
representatives of a group of U.S. Underwriters and International Underwriters
named therein, relating to an underwritten public offering of Common Stock,
$0.33 1/3 par value (the "Common Stock"), of the Company.
In order to induce you and the other U.S. Underwriters and
International Underwriters to enter into the Underwriting Agreements, the
undersigned will not, without the prior written consent of Xxxxxxx Xxxxx Barney
Inc. and Xxxxxxx Xxxxx & Company, L.L.C., offer, sell, contract to sell, pledge
or otherwise dispose of, (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing (or participation in the filing of) a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into, or
37
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 90 days after the date
of the Underwriting Agreements, other than shares of Common Stock disposed of as
bona fide gifts approved by Xxxxxxx Xxxxx Barney Inc. and Xxxxxxx Xxxxx &
Company L.L.C.
If for any reason the Underwriting Agreements shall be terminated
prior to the Closing Date (as defined in the Underwriting Agreements), the
agreement set forth above shall likewise be terminated.
Yours very truly,
[Signature of officer, director or major
stockholder]
[Name and address of officer, director or
major stockholder]
38
CGSH draft: 5/14/99
[Form of Lock-Up Agreement for Xxxxxxx Xxxxxx and Xxxx Xxx Xxxxxxxx]
EXHIBIT B
[Letterhead]
Concord EFS, Inc.
Concord EFS, Inc.
Public Offering of Common Stock
-------------------------------
, 1999
Salomon Brothers International Limited
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxx, Sachs & Co.
Xxxxxxx Xxxxx International
X.X. Xxxxxx Securities Ltd.
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxx & Company, Inc.
As Representatives of the several U.S. Underwriters
and International Underwriters,
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
U.S. Underwriting Agreement and International Underwriting Agreement (the
"Underwriting Agreements"), among Concord EFS, Inc., a Delaware corporation (the
"Company"), each of the Selling Stockholders named therein and each of you as
representatives of a group of U.S. Underwriters and International Underwriters
named therein, relating to an underwritten public offering of Common Stock,
$0.33 1/3 par value (the "Common Stock"), of the Company.
In order to induce you and the other U.S. Underwriters and
International Underwriters to enter into the Underwriting Agreements, the
undersigned will not, without the prior written consent of Xxxxxxx Xxxxx Barney
Inc. and Xxxxxxx Xxxxx & Company, L.L.C., offer, sell, contract to sell, pledge
or otherwise dispose of, (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing (or participation in the filing of) a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with
39
respect to, any shares of capital stock of the Company or any securities
convertible into, or exercisable or exchangeable for such capital stock, or
publicly announce an intention to effect any such transaction, for a period of
90 days after the date of the Underwriting Agreements, other than shares of
Common Stock (i) issued after the date of the Underwriting Agreements under the
Electronic Payment Services, Inc. 1995 Stock Option Plan, as amended effective
at the date of the Underwriting Agreements or (ii) disposed of as bona fide
gifts approved by Xxxxxxx Xxxxx Barney Inc. and Xxxxxxx Xxxxx & Company L.L.C.
If for any reason the Underwriting Agreements shall be terminated
prior to the Closing Date (as defined in the Underwriting Agreements), the
agreement set forth above shall likewise be terminated.
Yours very truly,
[Signature]
[Name and address]
40
Annex A
Subsidiaries
EFS National Bank
EFS Federal Savings Bank
Concord Computing Corporation
Concord Retail Services, Inc.
Concord Equipment Sales
Pay Systems of America, Inc.
Digital Merchants Systems of Illinois, Inc.
American Bankcard, International, Inc.
Electronic Payment Services, Inc.
